US politicians have, for the last few years, been deeply divided over the growth in popularity of digital currencies. Some believe they should be banned in entirety while others agree that people should have an alternative to the dollar.
Former US Congressman Ron Paul, who is an outspoken proponent of the modern right-wing Libertarian movement, recently attended the crypto centric Consensus conference in New York. During his visit, he spoke to industry media about “dollar destruction” – a popular topic of his – and also about the usefulness of Bitcoin as an alternative store of wealth.
Paul addressed Congressman Brad Sherman’s recent call to ban cryptocurrencies by saying that Bitcoin isn’t that big on the Congress radar yet and a ban is very unlikely, despite what some “over the top” congressmen think. However, he did add that the “more successful that cryptos are, the more the government will get involved … they’re not going to all of a sudden pass this; I don’t even think he’ll introduce a bill. It won’t be a movement, it just got everyone’s attention.”
Paul is convinced that the dollar will self-destruct and in his 2009 book End the FED, he referred to the dollar as a ticking time bomb. When asked about the validity of the threat of decentralized currencies, he said Congressman Sherman was “speaking for the deep state establishment, military people and everyone else in the banking system,” before adding “he’s representing their position that ‘You don’t mess with the dollar.’ But I don’t worry about that because the dollar is going to self-destruct.”
When asked about the possibility of using Bitcoin like gold as a hedge against a dollar in turmoil, the retired Republican said that people should be allowed to make that choice. Under the 1934 Gold Reserve Act, US citizens have to surrender any holdings of gold to the Treasury, if requested.
He added: “I just want to make sure that there’s allowed to be a hedge. I think that there are a lot of time bombs. We have difficulty figuring out what our foreign policy is. You know, the on-again-off-again with Syria and North Korea, Iran.”
Paul also predicts another financial collapse stemming from the announcement that the dollar can no longer be held, saying it was “really an announcement of bankruptcy and it’s been steadily building up the problem. And the trust in the dollar has allowed the bubble to get bigger,” which will make the crash much worse.
With regards to Bitcoin’s volatility issues, Paul made another comparison with the greenback.
“You have the supply and demand for the dollar,” he said. “How many people really want to use it versus how fast they’re printing the money.” Here, Paul was referring to the well-documented decline in USD purchasing power that has occurred since former President Nixon removed the gold standard in 1971.
In terms of regulation, he remarked that it is necessary for this new digital finance ecosystem, but the choice of regulator should be more important. “Ever since the depression, we’ve had hundreds of thousands of rules and regulations regulating the financial system and yet we still had 2009. It didn’t do any good,” he added.
Paul also said that although Bitcoin’s current rally, which has seen the digital asset double in price since the beginning of April, clearly shows there is a lot of confidence in Bitcoin at the moment, he would not admit to holding any himself.
“We accept Bitcoin at our foundation, but we immediately convert it because we need to pay our bills,” he concluded.