The lira crashes around 14% after the head of the Turkish central bank is fired. The same kind of fiat depreciation is happening in other countries around the world as Bitcoin continues to head higher.
When Satoshi Nakamoto launched the bitcoin blockchain, the first ‘Genesis block’ carried the text “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
The text is taken not just as a reference to a particularly difficult time for the pound in the UK’s financial history, but also as a warning against the present monetary system in place across the world.
Whoever Satoshi Nakamoto was, the idea was to provide an alternative system, completely separate from the current monetary system, that would enable people to transact, but that wouldn’t allow interference from banks, governments or any other third party.
A very good example of what Satoshi was seeking to address with his Bitcoin implementation is the current situation in Turkey. President Erdogan has decided to sack the head of the Turkish central bank, Naci Agbal, because he had raised interest rates from 17 to 19% in order to boost the currency.
The sacking came given that President Erdogan has the belief that higher interest rates lead to higher inflation. A statement from the new head of the Turkish central bank, appointed by Erdogan, read that the Turkish central bank:
"will continue to use the monetary policy tools effectively in line with its main objective of achieving a permanent fall in inflation"
Whether this move will have the desired effect will be up to the future to decide. However, the immediate effect has been that nervous investors have fled the domestic market and the Turkish 10-year bond has fallen precipitously as yields have risen to 16%.
Satoshi could clearly see the problems that beset the world back in 2009 and the Bitcoin inventor stated:
“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.”
Steve Forbes, the Editor-in-Chief of Forbes Media, stated in an interview last month that a “cryptocurrency war” was going to ensue and that it would be a “huge clash between governments and cryptocurrencies”.
It does look as though we are seeing this clash being played out in just about every country across the world. The currency debacle in Turkey isn’t ostensibly about cryptocurrency, but it is another sign that the current monetary system is failing, and that bitcoin and crypto may well have the solution.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.