Is Crypto = Money ?
Whenever we talk about money, it is considered as medium of exchange in the form of payment for goods and services, measurable as a unit of account, a store of value. Most importantly this medium of exchange in place must carry with the consent/approval/stamp of any govt. in any respective given country.
Let’s come to Crypto = Money or not ?
I would say crypto is ‘Asset’ like gold, diamond, property etc. Like we purchase assets for any reason say as store of value, practical usage in our life, etc. People may purchase any asset as per their choice for any valid reason.
I would rather say crypto, not cryptocurrency. The word cryptocurrency gives crypto the meaning of money.
If crypto starts using as money, then lot of issues are there for the central agencies like governments, central banks, income tax authorities, international institutions involved in cross border settlements etc. Complications are there regarding how taxation would be done, cross border transactions’ settlements, etc.
Let’s again discuss about ‘Money’ is issued by some central authority/govt./fundamental authority who is trusted by the residents/citizens of the respective country.
Money always has some values within itself or any object which has some underlying value is money. Money is measurable in units.
If you go into the details of whitepaper of Bitcoin, it also never said bitcoin is currency. It mentioned that bitcoin is the system of money. The term cryptocurrency came later.
Actually all the attributes of currency/money are there in crypto assets, that’s why people started calling it as cryptocurrency. But one the most important attribute of approval of central authority is missing from this form of currency. Central authorities say that cryptocurrency is anti traditional fiat money which is issued by the central authority.
Some may say cryptocurrency is the better form of money than traditional form of money i.e. fiat money due to different reasons.
Very basic test of currency for crypto is if people are willing to buy goods or services in exchange of cryptos’ holding with them. This kind of trend is there but not at very large scale. Mostly people are using cryptos as investments, trading, etc. due to the factor of fast appreciation in the value of crypto or good tool to defeat the inflation in front of the fiat money or other assets. This theory is based upon the belief system of people holding crypto.
Some one or two small countries have made crypto as legal tender due to the reason such countries did not have their own currency and were dependent on currency system of another country.
One more important reason for not using crypto as currency in major countries is the regulatory aspect. Regulators/governments are against if crypto is used as currency in their countries where already there is approved & verified system of money is in place i.e. fiat money.
Let me discuss if crypto is used to buy & sell goods or services, then really will it be treated as currency? Let’s assume I bartered my apple cellphone with Samsung phone with one of my friend. In such a situation, apple phone became medium of exchange but we can not term it as currency because of absence of regulatory approval for it to be currency. This arrangement of exchange of apple with Samsung between me & my friend was for convenience of both of us.
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