Bitcoin, the largest cryptocurrency, is currently on a roll. Bitcoin along with other major cryptocurrency projects have the potential to disrupt the global financial system. BTC is described as having the strength to fight against the money-making and controlling power of central banks and Wall Street. However, to achieve this status permanently, BTC still needs some makeovers.
I am honored to have had the chance to have such a frank conversation with @CaitlinLong_ about his full history, his career on Wall Street, his conviction for #Bitcoins & why she founded @AvantiBT. We also discussed the BTC regulation.
Thanks Caitlin for your wisdom! Https: //t.co/U6LktUyRMV
– Natalie ₿runell (@natbrunell) November 26, 2021
Caitlin Long, Founder and CEO of Avanti Bank & Trust provided her story on the subject. “We are going to end with Bitcoin as the global reserve currency at some point.” Although it will take a long time. Let’s explore how.
Many Bitcoin enthusiasts describe BTC as a deflationary asset, gaining momentum to reverse the USD as soon as possible. However, she cautioned against deflation or inflation for that matter, she expects a smooth transition, she said:
“You’re going to end up having debt issued, which is inherently inflationary. You don’t want this debt deflation, which takes you into a deflationary world.
This could provoke an overreaction to that of central banks.
BTC against others
The Wall Street veteran provided a perfect situation to shed light on Bitcoin’s needs. On average, a Bitcoin transaction can be expected to take anywhere from 10 minutes to an hour to complete. Compared to the situation reiterated in the interview, the BTC would prove to be beneficial.
Situation: This was a transfer of $ 29 billion of pension liabilities and assets from the General Motors pension plan. It took about 3 days to settle the said transfer considering the rules and regulations within the intermediaries. However, with Bitcoin, this transfer can be done within the maximum hour. She noted: “What we have now is neither fair nor stable. Bitcoin will get us there.
However, Bitcoin also has some setbacks. She estimated:
“There are things in the Bitcoin markets that are not fair and stable. I am quite adamant against some of the fractional reserve lending practices that we see in the Bitcoin lending markets ”
Additional insight into circulation credit and commodity credit. “It’s wonderful that the market exists up to 1: 1 leverage. But, once you get past the leverage of 1: 1, you now understand that you are creating more claims on the asset than there are actual assets. Mainly by creating an execution risk in the system.
Governments around the world have maintained ambiguity regarding crypto regulations. Instead, Long claimed that
“One place the government should be actively involved is to ban fractional reserve banking and the Bitcoin market. You need absolute property rights to have a real interest rate curve. We don’t have this in Bitcoin at the moment, as there are a lot of fractional reserve middlemen in Bitcoin. “
The aforementioned attribute not only increases Bitcoin’s price volatility, but also increases the cost of capital for everyone in the industry. Solving this problem would make people all over the world more comfortable interacting with Bitcoin.
Overall, the interviewee is optimistic about the flagship token. Especially with developments like the Lightning Network and Liquid. “This is how I see Bitcoin being scaled up and would be the high value transaction system just like central bank money.”
Central bank money faces a certain group of setbacks, such as expensive, inefficient transactions in terms of cost, time, and technology.
“Bitcoin is the base currency of the central bank of the Bitcoin system, and then Lightning and Liquid are scaling up technologies that are more analogous to commercial bank money.”
Nonetheless, it still needs a lot of “engineering work” to challenge the US dollar system. But she seemed confident it was gonna happen soon
“I think it’s coming. It’s inevitable. I’m interested in coming up with that fair and stable financial system that I believe Bitcoin will lead us to and doing so in a way that minimizes the potential for a destabilizing transition.
Not so long ago, Deutsche Bank released a similar report with the same conclusion.