Cryptocurrency emergence is a positive thing for the future of monetary policy, says Austrian Economist

On 27th August,  YouTuber, Naomi Brockwell interviewed Barbara Kolm, the Founding Director of the Austrian Economics Center during the FreedomFest in Las Vegas. The interview was focused on understanding Kolm’s perspective on the value of Bitcoin as an Austrian economist.

Kolm who is also the President of the Friedrich A. V. Hayek Institute, spoke about Friedrich Hayek, an Austrian-British economist and his prediction regarding competing currencies back in the 1970’s.  Brockwell during the interview asked:

“I wanted to talk about blockchain and cryptocurrency in relation to Austrian economics. A lot of people in the cryptocurrency space talk about Hayek. They say that he may have predicted the emergence of Bitcoin because he talked about competing currencies. What is your take on this?”

Kolm in her reply stated that what Hayek wrote in his essay on competing currencies in the 70s was spot on. History is witness to what happened during the gold standard [‘a monetary system in which the standard economic unit of account is based on a fixed quantity of gold’] and the various crises that occurred as a consequence of it. Kolm believes that Hayek was thinking into the future. She stated:

“Hayek said that if we don’t back up our currencies with something solid and secure, we need to move on and at least allow them to compete. He said that people have that choice and this was back in the 70s. Now with a lot of modern technology, cryptology, and blockchain, that’s how things are working. I think to have this option is a very good thing for our generation.”

According to Kolm, the emergence of different cryptocurrencies is a positive thing for the future of monetary policy. Kolm also pointed out that it is a big challenge for bureaucracies and governments as the cryptocurrency geniuses are working much faster than the government can anticipate in furthering blockchain and crypto technology. Kolm stated:

“I think that’s an advantage that we have, technologists who are working really hard to create things that make people freer essentially creating a better life for people. When you have people creating companies, generally their focus is on the consumer.”

She then concluded:

“You don’t have that with governments. They’re not thinking, ‘oh what’s good money that we could create for people that we know consumers would like? They don’t really care about people’s experience with money. So what’s interesting to me is seeing all of these cryptocurrencies emerge that are specifically tailored to what consumers want from a currency.”

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