Governments must tax or ban #Bitcoin❗ to maintain deficits: US 🇺🇸 Federal Reserve.
#FEDDATA #FedRateDecisions #FedRateCut
A recent research paper by the Federal Reserve Bank of Minneapolis has suggested that assets such as #Bitcoin❗ would need to be taxed or banned for governments to maintain deficits.
In an economy where the government tries to maintain permanent deficits using nominal debt, the presence of Bitcoin creates problems for policy implementation, the Minneapolis Fed stated in a working paper released on Oct. 17.
Bitcoin introduces a “balanced budget trap,” an alternative state where the government is forced to balance its budget, the Fed claimed.
The researchers used Bitcoin as an example of a fixed-supply “private-sector security” without “real resource claims.” They concluded that it needed to be banned or taxed to solve the conundrum, which has since been met with heavy opposition from crypto supporters.
