Earlier this month, a majority of citizens in the United Kingdom voted to exit the European Union. This departure, known as “Brexit,” caused a temporary global market collapse, and prompted US billionaire George Soros to warn that a collapse of the European Union is “practically irreversible” at this point.
During the polling leading up to the Brexit vote, gold and Bitcoin both tracked polling to leave the EU. Luca Dordolo, Italian BTM operator, sees Bitcoin as becoming considered, like gold, a hedge against weak markets.
“What's happening to gold rates in these Brexit days, stock markets disrupted and gold rises, the same happens to Bitcoin. So in the public imagination, Bitcoin is considered as gold, a good where we find refuge when markets fall down. This is only a prologue in respect to what could happen.”
Could Bitcoin replace the euro short-term?
Julio Alejandro, founder and CEO of the Humanitarian Blockchain, does not think that the short-term prospect of Bitcoin replacing the euro is viable.
“[It] is an “irrational utopia” to suggest that Bitcoin, or any of the 646 altcoins, tokens, or alternative methods of payments in the cryptocurrency market, would be massively adopted by the everyday European user if an –unlikely-- European Union project or common currency (euro) would collapse within the next few months or years.”
Robert Genito, CEO of Wall of Coins, sees Bitcoin as having the potential to replace the euro in the event of an EU collapse, but that it lacks the necessary infrastructure and adoption to do so, and likely will for another few years.
“The reality is that Bitcoin is already a currency for any country or region. As for a general currency substitute to replace the euro, the Bitcoin ecosystem has at least another 3 to 4 years of maturing before there will be enough options and simplicity for the general population. That's good news, as you can still be an “early adopter” and make a huge change for humanity, globally.”
Brexit and Bitcoin’s rise as an indictment of European governance
As far as the prompt for the UK’s exit from the EU, Dordolo sees it as an indictment of EU governance, and hopes “for a deep self-criticism of the European system, and Bitcoin could be at head of the change.”
“Brexit is not a real signal of proud nationality against united Europe. It is stupid and superficial thinking so. It is an extreme warning to change this Europe or it will definitively fall down. Stop Eurocracy, not coming back to europe of States, but welcome to Europe of peoples and regions, where people can share decisions that will be not taken over their heads.”
According to Dordolo, Bitcoin provides a valuable tool to reign in the potentially destructive policies of European bureaucrats.
“And Bitcoin in nowadays Europe of finance and banks, of lobbies and bad decisions against peoples, could play a first row rule. Which kind of weapons people have against Euro bureaucrats? Voting and Bitcoin. Or, in near future we will see blood flooding the streets of the old continent.”
A dual-currency Europe with Bitcoin keeping the euro in check
As long as the European Union, and the euro, remain standing, Dordolo envisions a dual-currency model, with Bitcoin and euros being used depending on the price of each, acting as a check to keep devaluation of the euro under control.
“In a dual currency system, I use for payment the first most convenient for me. So, if the value of Bitcoin I own is higher that what I paid for it, certainly I will use Bitcoin to pay. Otherwise, if Bitcoin rate is lower than what I paid it, I will use euros. But the important fact is that, in this way, Euro-bureaucrats cannot decide to inflate the euro ad libitum (as their convenience). Instead, they should maintain the right line, or Bitcoin will have the victory on euro. So Bitcoin becomes not only a crossborder currency, but a direct player inside Europe, and fulfills another promise: that of being a coin of freedom.”
Bitcoin’s long-term viability in Europe
Over the long-term, however, the prospects remain different for European currency. Genito thinks that, over time, Bitcoin will outcompete fiat currencies, the euro included.
“Fiat is losing hold while Bitcoin continues to tighten its grip. It is only a matter of time until fiat currencies begin to gasp in desperation and change to fit public demand, while the Bitcoin ecosystem will have already proven to serve that public demand, unforgiving and unyielding to the once over-inflated ego of fiat currencies. Genitrust will be ready when that time comes.”