Thursday, January 11, 2018

Proof that "fiat" isn't what you think it means


Reuters - South Korea to ban cryptocurrency, raids exchanges on tax evasion charges. Quote:

South Korea’s government said on Thursday it plans to ban cryptocurrency trading, sending bitcoin prices plummeting and throwing the virtual coin market into turmoil as the nation’s police and tax authorities raided local exchanges on alleged tax evasion.

The clampdown in South Korea, a crucial source of global demand for cryptocurrency, came as policymakers around the world struggled to regulate an asset whose value has skyrocketed over the last year.

Justice minister Park Sang-ki said the government was preparing a bill to ban trading of the virtual currency on domestic exchanges.

And of course it's more complicated than that, but the point remains:

"Fiat" doesn't mean "worthless money". "Fiat" means "stuff that the government declares to be money". Thus, anything that the government declares to not be money ends up not being money.

Because the government says so.

Thus endeth the lesson.

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