Ex-CFTC Chair: Cryptocurrencies Could Have Mitigated The 2008 Global Financial Crisis

As of yesterday, January 20th, 2020, the Blockchain Economic Forum kicked off in Davos, Switzerland, with a keynote speech delivered by J. Christopher Giancarlo. 

Giancarlo spoke about the past, present, and future evolution of the blockchain, and made one particularly exciting remark about virtual currencies. 

The ex-chairman of the United States’ Commodity Futures Trading Commission believes that, had blockchain technology been introduced to the world before the global financial crisis of 2008, it could have fully mitigated the crash.  

Bitcoin To The Rescue

Rewind twelve years, back to the year 2008, and the economic landscape in the United States, as well as all around the world, looked a lot different than it does today. 

It all began in 2007, when the U.S. subprime mortgage market crashed, which eventually lead to a full-on global banking crisis. The global crash is directly attributed to excessive risk-taking by major international investment firms such as Lehman Brothers. 

To prevent the collapse of the entire global economic system, countless government bailouts, new and reviewed fiscal policies, and other palliative financial measures were put into place by dozens of major financial institutions all around the world. 

But still, the crisis left dozens of countries reeling from the economic downturn, which eventually lead to what is often referred to as the Great Recession. 

According to the International Monetary Fund (IMF), the crisis is said to have been “the most severe economic and financial meltdown since the Great Depression.”

The 2008 financial crisis is regarded as the second-worst economic downturn of all time. 

But today, economic experts, such as Christopher Giancarlo, believe that virtual currencies, such as Bitcoin, are fully capable of preventing global catastrophes such as this. 

The Future of Finance: Digital Dollars

To prove his point, Giancarlo has also announced another extremely innovative blockchain project aimed at pushing the “digital dollar” into existence, a tokenized version of U.S. fiat currency. 

The project is set to be a collaboration between Giancarlo, former Lab Director of the CFTC, Daniel Gorfine and Charles Giancarlo, investor, and expert on global economics. 

By partnering with Accenture, the three are hoping to establish the Digital Dollar Foundation, which will focus on creating the financial framework of what a tokenized U.S. dollar would look like.    

According to Giancarlo, “An analog reserve currency does not serve modern users.” However, he continues, “A digital dollar would help future-proof the greenback and allow individuals and global enterprises to make payments in dollars irrespective of space and time.”

There’s a constant debate on whether Bitcoin could be the economical answer that people have been looking for all along.

According to Giancarlo, the answer is yes, which is boldly stated in the title of his keynote speech: “We Sent a Man to the Moon, we Can Send the Dollar into Cyberspace: The case for a Digital Dollar.” 

Featured image courtesy of The Wall Street Journal