Unconventional monetary policies borne of the ongoing economic crisis have driven people to bitcoin. Russian human rights activist Gary Kasparov Believes bitcoin is part of the solution.
The Chess Grandmaster was speaking to Forbes on the connection between human rights and new technologies. According to Kasparov, cryptocurrencies have enabled the public to regain control of their finances. He blames governments and institutions for making unilateral moves that are impacting economies negatively. Kasparov opined:
“The good thing about bitcoin is that you know exactly the number – the magic number of 21 million. And we understand the formula behind that. But when you look at the other side, the Fed, for instance, you never know how many trillions of dollars will appear on the market tomorrow that will damage your savings.”
Serious Repercussions
The panic that accompanied Covid-19 begins is clearing around the world. Investors are coming face to face with the challenges that lie ahead. As soon as the medical crisis gets under control, there is likely to be an unprecedented economic crisis. The GDPs of many economies will tank, and even though recovery is expected, long term recessions are on the horizon.
Central banks led by the Federal Reserve have printed trillions in new currencies as they roll out economic stimulus programs to jumpstart the economy. The increase in central bank balance sheets will bring severe repercussions for global prosperity. Investors search for assets to hedge against hyperinflation. We can expect that gold will continue to prove a popular option to protect against inflation.
Alternative Means
Thankfully, gold will not be the only safe haven from the impending storm. Bitcoin has earned its moniker as ‘digital gold’. It’s a store of value while cash is eroded and more bond yields turn negative. There is no digital central bank that can debase the value by flooding the market.
The decentralized nature means that the decisions of a few power-brokers cannot fundamentally alter the value of people’s holdings. Cryptocurrencies offer an alternative means to protect personal finances against inflation and state interference. The chess grandmaster added:
“Anything that can offer us the opportunity to take back control or some control of our privacy is always welcome […] that’s why I think the steady rise in popularity of bitcoin and other cryptocurrencies and blockchain technology as a concept is inevitable. It’s a response to the shift of power from individuals to states or other institutions that may act on our privacy without our consent.”
Universal Standards for Privacy
Kasparov is the chairman of the Human Rights Foundation. He has consistently hailed blockchain and cryptocurrency as a means to empower the public around the world. He believes there is a need to fight for universal standards for privacy no matter where they live. Whether one lives in Africa, Asia or Europe, they should all get the same level of protection.