Ron Paul believes that the cryptocurrency Bitcoin should be legalized as money. He made his position clear in an interview with Michelle Makori, editor-in-chief of Kitco News on June 2, 2021, where the former Texas congressman made the case for Bitcoin being money. Because of his belief that Bitcoin is money, Paul declared that Bitcoin should not be regulated.
“Right now, if you buy and sell gold, you get it taxed, they can do that. If you make a profit in Bitcoin, you read stories about people being taxed on it. You can’t tax money, you don’t tax it. If you bought a dollar a year ago and it went down 10%, you can’t take a loss because your dollar lost value,” Paul said to Makori.
This comes at a time when other states like China and Turkey are beginning to crack down on the cryptocurrency. The US will likely follow suit now that the Chair of the SEC, Gary Gensler, revealed that new regulations will be imposed on Bitcoin.
Paul observed that governments will always work diligently to crack down on competing currencies. Nevertheless, he is of the opinion that it’s crucial to allow free markets to determine what is the best currency to use.
“I will argue more the case for the legalization of freedom of choice and the people should make a decision, not the government,” he stated. “And the market will finally determine that my goal is to help legalize the competition. And I think the people will sort it out, freedom of choice will sort it out.”
The jury is still out on Bitcoin. Founded in 2009, Bitcoin is still a young technology that is in its gestational stage. It remains to be seen if it will be massively adopted. Regardless, money should be subject to free market competition just like any other good or service.
The good news is that Bitcoin emerged in a free market, where free individuals voluntarily assign it value. Competing currencies are a way to break the fiat money monopoly. Dr. Paul is correct in calling for the cryptocurrency to be free of government intervention. Government intervention could subvert Bitcoin’s original function as a free market economy.
In his time in Congress, Paul has been a staunch advocate of abolishing the Federal Reserve and letting a free-market order of competing currencies take its place. Bitcoin’s free market origins embodies Paul’s pro-market vision. In an ideal world, the Fed would be abolished and gold (humanity’s oldest form of currency) and cryptocurrencies would be vying for the monetary standard that free individuals will embrace in the market.
The key is that the government’s monopoly on the provision of currency be smashed. Cryptocurrencies like Bitcoin, if successful, could effectively disintermediate the state’s central banking monopoly. It remains to be seen if it will be adopted on a mass scale.