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What Bitcoin Did with Peter McCormack

Jun 27, 2022

Avik Roy is president of the Foundation for Research on Equal Opportunity think tank and a policy Editor at Forbes. In this interview, we discuss the Lummis Gillibrand Responsible Financial Innovation Act, inflation’s compounding impact on the poor and why Bitcoin provides optimism.

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On June 7th Republican Senator Lummis and Democratic Senator Gillibrand introduced the Responsible Financial Innovation Act, which aims to establish a regulatory framework for digital assets in the US. Many Bitcoiners believe Bitcoin is designed to work outside of regulatory oversight. But is this proposal inimical to Bitcoin’s potential to positively contribute to society?

If Bitcoin is to play a dominant role within society, can it do that outside of the law? Irrespective of Bitcoin, should governments have a role in protecting citizens from the negative impacts of the wider altcoin market? What are the dividing lines between different digital assets? And, could the lack of regulation in the near term actually be detrimental to Bitcoin in the long run?

Bitcoin’s advocates are heavily engaged in trying to obtain regulatory clarity - they fear continued uncertainty could delay or damage its ability to provide utility to those who really need it. This is particularly for those impacted by the ravages of inflation.

The current inflationary environment has resulted in renewed consideration of this economic condition. The issue is that there is actually a deficit of understanding of inflation’s regressive impacts. It impacts the poorest in society hardest, whilst benefiting the richest. These impacts compound over time such that inequality explodes even in low inflationary environments.

Does this mean inflation as a policy is a busted flush? Should economies aim for zero inflation? These are radical policy shifts that are unlikely to happen anytime soon. This is why Bitcoin provides some with optimism: it’s trying to be the hardest money the world has ever seen.