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Mohamed El-Erian says bitcoin's surge holds 'important messages' on the future of money and technology for policymakers in Europe and the US

Mohamed El-Erian says bitcoin's surge holds 'important messages' on the future of money and technology for policymakers in Europe and the US


Mohamed El-Erian



Bitcoin's surge shows that lawmakers should view its technology more seriously, Mohamed El-Erian wrote in an op-ed.



Adoption by major players indicates the potential of a growing migration away from traditional money, he said.



"Too many officials are inclined to look at the cryptocurrency in a rather narrow way. They shouldn't."



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Bitcoin's momentous rally in the last three months holds "important messages" for governments and central banks in the US and Europe, economist Mohamed El-Erian said in a Bloomberg op-ed on Thursday. The latest flurry of bitcoin adoption by companies like Tesla and Square has broadened the discussion for other companies to consider using it as a form of payment and store of value, which are the key characteristics of money, El-Erian said. That sends a clear message to countries with globally-used currencies, like the euro and the dollar: "Take a lot more seriously both the technology underpinning cryptocurrencies and, on the more worrisome side, the potential of a growing migration away from traditional money and its implications for the effectiveness of monetary policy and the ability to profit from issuing currency ("seigniorage")," El-Erian wrote.Apart from corporate endorsement, crypto traders have also been drawn to bitcoin by factors such as fears over an uptick in inflation, risks of the declining dollar, and the consequent search for a safe haven. These reasons bring about higher threats to future financial stability because risk-mitigation is now attracting a more volatile component, El-Erian said.
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