MMT • Bitcoin • Theories 🏛🪙

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The MMT has been a newly developed concept that has been discussed by multiple parties. Initially I’ve learned from an economist what the meaning behind the theory is. Now, by reading an article about Bitcoin and MMT I’ve widened my understanding of its importance and the reasons behind its development and discussions.

The current financial system has multiple flaws but also benefits. It provides security, enhances credibility, and the ability to stabilize the economic environment which by doing so impacts the social environment positively. Although, it issues these benefits it also has its flaws presented in a form of organized corruption and greed by multiple financial companies, regulators, agencies, and government operators themselves. By this, the credibility of clients shifts downwards, and the need for more transparency. This is where Bitcoin starts, with a dream of a decentralized financial system from the government and a self-regulating, auditing network available on a global scale.

These factors made me think about how Decentralized Finance can become the future of finance and I see it as developing faster in advanced first and second rather than third and fourth-world economies. The possibility of the financial system going through complete modification in the future is there. What would be factors that I believe are necessary for a decentralized environment to thrive?

Initially, we have to take into account security protocols and the ability of digital platforms to handle and protect larger monetary values is more difficult on digital platforms than traditionally. The process of hacking would be simpler than the process of trying to enter a treasury and not be noticed. Secondly, the stability rates have still not yet provided an improvement that can lead me to believe that crypto can have monetary stability without pledging to another financial asset. Thirdly, validation, auditing, and approval to meet the criteria of AML and GDPR policies. Moreover, there is another aspect I would like to touch on. The collateralization ratio at astronomical rates is a non-incentive to large-sized companies to acquire loans or credit products from the network due to the risk profile being much higher than in traditional banking.

These would be the initial three elements I would classify as a requirement for decentralized finance to become competitive and potentially blend with centralized finance. While Ethereum Defi is different, Bitcoin Public Network and no ownership factor brings more security and credibility to its users that a privately owned platform especially when we know that it would be just a shift of ability to manipulate other parties’ assets. From public to private transfer of greed.

Monetary Policy as a relatively newly developed policy is not a system nor it is a concept but an actual educational model of monetary policy development with the future possibilities and current innovations being attached directly to it.

MMT describes how policies are and can be reconstructed at different periods to contribute to economic development and growth. It also sparks additional implementation of crypto assets as an additional monetary base in the future with the ability of it to become a part of taking over the current financial system.

To sum up, there are and will be multiple theories on the financial system and questioning of specific economic concepts but overall time will tell and it’s good that we live in a time where we can lead multiple different theories and form our conclusions hopefully leading us to the most accurate solution🕊️

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Happy to say text from this author inspired my post on MMT, Bitcoin and Theories 🤍

#economy #crypto #decentralized #centralized

#MMT #economictheory #future #bitcoin