Central bankers are claiming that Bitcoin is unfair. By doing so, they are laying the foundation for imposing high taxes on Bitcoin—from mining to capital gains—and possibly even for an outright ban. However, much of the economic evidence, including that found in papers they themselves publish, suggests that central bankers are the true cause of economic suffering through money printing and inflationary policies.
In a new paper by the European Central Bank (ECB), Jürgen Schaaf argues that Bitcoin is inherently unfair. “In absolute terms, early adopters increase their real wealth and consumption at the expense of the real wealth and consumption of those who do not hold Bitcoin or who invest in it only at a later stage,” writes Schaaf. He claims that the wealth accumulated by early Bitcoin investors effectively comes at the cost of non-Bitcoiners.
Schaaf, an adviser to the senior management of Market Infrastructure and Payments at the ECB, suggests that Bitcoin’s economic gains for early adopters lead to diminishing consumption and wealth for those who do not hold Bitcoin. He further argues that Bitcoin’s wealth redistribution is unlikely to occur without adverse consequences for society, urging non-Bitcoiners to oppose it and even work towards legislation that would prevent Bitcoin’s rise or eliminate it altogether.
The paper also touches on Bitcoin’s inelasticity—the inability to create more Bitcoin—and presents a graph illustrating how limited Bitcoin availability will affect late adopters. This stance has been criticized by members of the Bitcoin community, with some, like Tuur Demeester, interpreting it as a declaration of war against Bitcoin.
While Schaaf blames Bitcoin for economic disparities, there is perhaps more evidence that central bank policies, such as quantitative easing (QE), create greater economic dislocation for those holding fiat currency. For instance, QE policies—often described as “money printing”—may have driven up asset prices, disproportionately benefiting those who already hold significant wealth.
A report by the United Kingdom Parliament House of Lords Economic Affairs Committee titled “Quantitative Easing: A Dangerous Addiction?” examined QE’s effects in response to the 2008 Global Financial Crisis. The report stated that QE artificially inflated asset prices, benefiting asset owners disproportionately and exacerbating wealth inequalities. Additionally, a paper from the University of Massachusetts found that QE had regressive effects on income and wealth distribution, increasing inequality despite some positive impacts on employment.
Inflation, another consequence of central bank policies, has also been shown to disproportionately impact those with lower incomes. A paper published by Ohio State University Press highlighted an international poll of 31,869 respondents across 38 countries, finding that disadvantaged individuals—the poor, uneducated, and unskilled workers—are more likely to cite inflation as a major concern. A survey by the U.S. Census Bureau found that low-income households are particularly vulnerable to inflation, as they spend a greater share of their income on essentials like food, gas, and rent, where inflation tends to be higher.
Schaaf’s argument that Bitcoin will lead to economic suffering appears unconvincing in light of the evidence against central bank policies. Academia and even central banks themselves have provided substantial evidence to suggest that the real culprits behind economic disparity are central bankers and their policies. Perhaps non-Bitcoiners should reconsider who they truly need to oppose: central banks rather than Bitcoin.