Your claim that central banks have to "invent" a more competitive form of money than other alternatives in the market is shockingly dumb. Government is a monopoly on force. The banks took over the government. They are not here to "compete", they are here to use force to scam you. There is no "competing" required besides deploying a larger amount of force than you can. Any random fool on this forum knows that.
You don't understand how banks work. Banks or ie the fed, makes policy that affects the quality of the money that is issued. I already cited this congressional research report that admits exactly what I claim:
https://fas.org/sgp/crs/misc/R43339.pdfRegarding the velocity of money, if the increase in the use of Bitcoin leads to a decrease in need for holding dollars, it would increase the dollar’s velocity of circulation and tend to increase the money supply associated with any given amount of base money (currency in circulation plus bank reserves held with the Fed).
In this case, for the Fed to maintain the same degree of monetary accommodation, it would need to undertake a compensating tightening of monetary policy. At a minimum, a substantial use of Bitcoins could make the measurement of velocity more uncertain, and judging the appropriate stance of monetary policy uncertain.
This is exactly what Nash points out:
The idea seems paradoxical, but by speaking of “inflation targeting” these responsible official are effectively CONFESSING…that it is indeed after all possible to control inflation by controlling the supply of money (as if by limiting the amount of individual “prints” that could be made of a work of art being produced as “prints).
If the usd starts to tank because bitcoin becomes relevant the fed can choose to let the dollar drop out of existence or it can create favorable policy so it's value is attractive to citizens. You are effectively arguing the fed will let the dollars value drop to the point where no one uses it, which is asinine. The only logical option is to compete to survive.
You simply haven't thought two steps ahead.
Everyone knows I know what I am talking about and that you don't understand the subject at hand.
