The economist Sveinn Valfells has an unusual proposition: Bitcoin should become the Icelandic national currency.
At Bitcoin London 2013, Valfells explained that Iceland is an extremely wealthy nation with a broken financial system, and in desperate need for a new currency.
“It has far from adjusted from the 2008 crash. It has large overhang of hot money, and bloated and expensive banks. It has also a history of not managing its currency so well”, he explained.
In front of investors and enterpreneurs from all over the world, he argued why he thinks this is possible and, even more, why it would bring benefits for his nation.
“Bitcoin meets straightforward criteria: it’s getting close to the market cap of $1B needed for a comfortable margin and, in the matter of governance, it already has a structure so it’s getting there”, he said.
However, Valfells also accepted that bitcoin’s volatility needs to be reduced and liquidity should be incremented to secure the exports that Iceland needs.
Despite the boldness of the proposition, Valfells remained optimistic about a potential acceptance of the cryptocurrency among Icelandic people.
“I’ve seen private money [like vouchers] displacing public currency, and bitcoin qualifies as an asset”, he said.
The Stanford-educated economist assured the audience that the financial system will rotate into bitcoin in less than two decades.
“Bitcoin is going to grow like bacteria in a Petri dish, and the Icelandic króna is walking dead”, he said.