Opinion: Crypto, MMT, and the Nature of Money

Closing the window on gold opened the door for Modern Monetary Theory, arguing for currency as a government monopoly. Fast forward to 2008, and Bitcoin was created in response to this very concept.

Fundamentally different but joint in their controversy, both ideas have re-entered the mainstream conversation as we are approaching the post-pandemic world. At the moment, there is no consensus on either.

The fiscal response to the Covid-19 pandemic comes with unprecedented costs. The ECB’s balance sheet expansion — up €2.42 trillion since the beginning of 2020 — has been remarkable compared with its roughly €1 trillion response in 2008-2009. Interest rates remain at all-time lows, while debt levels have reached all-time highs.

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