Gold and Bitcoin will not protect against tyranny, all money is political – Yanis Varoufakis

Bitcoin and gold will not protect against geopolitical turmoil, according to Yanis Varoufakis, former finance minister of Greece and secretary general of MeRA25. “Finding freedom outside of government is a dangerous fantasy,” he said.

Varoufakis is also a doctor of economics and a best-selling author. He spoke with David Lin, presenter and producer at Kitco News.

CBDC and Blockchain

“I don’t believe that the…”oligarchic”, by definition, cryptocurrency like Bitcoin will ever replace [conventional currency]“said Varoufakis. “It shouldn’t, it can’t, and it would be a nightmare if it did.”

However, he added that blockchain technology will be useful for central banks.

“China’s central bank is already rolling out a crypto-like digital currency in an effort to circumvent the hurdles put on fiat money by commercial banks, which are a source of financial instability, and those that actually create a buffer zone, separating people their money,” Varoufakis said.

Varoufakis has long advocated a European Central Bank (CBDC) digital currency.

The tyranny of government

Responding to concerns that CBDCs are increasing government tyranny, Varoufakis said, “This is a grave concern. The concentration of power is never a favorable moment for freedom. So, I accept it, but at the same time I reject it because there can be no apolitical money… The only thing that gives value to money is the ability of money to extinguish taxes. So insofar as we live in states that do things for us, in our name, sometimes against us, but nonetheless, we are like fish that cannot live out of water. We are citizens of states…we need those states. I mean, look at all the libertarian attempts to create floating islands in the Pacific.

He added that the solution to government tyranny is democracy and transparency. “To those who say the government can be dictatorial and limit freedom, I say yes to them,” Varoufakis remarked. “So that’s why we need democracy. That’s why, for example, I’m a proponent of using blockchain technology, in the context of central bank digital currencies, to provide some degree of transparency so that we all know how much money is in the system.

Gold, bitcoin and inflation

Regarding the claim that gold and bitcoin are hedges against government unrest, Varoufakis responded, “[It’s] just pure idiocy… You have to control the supply of money. The idea that the money supply should be independent of politics and government is… very dangerous.

He went on to explain that in times of crisis, the central bank must make money available to avoid a depression.

Varoufakis responded to claims that loose monetary policy can lead to inflation. “Financial illiteracy,” he said. “…The reason we have inflation now is not because of QE. This is for two reasons. First, because of the disruption of supply chains. You had the lockdown, which essentially completely dismantled the supply chains of globalized capitalism… The second reason is that you had a period when the increase in demand for goods… coincided with a restriction of the supply of these things due to the disruption of the supply chains. And that started the inflationary spiral.

For how Varoufakis thinks central banks should fight inflation and how the Russian-Ukrainian conflict should be resolved, watch the video above.

Follow David Lin on Twitter: @davidlin_TV (

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Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

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