Speaking in an interview with CNBC published on Dec. 28, Scott Galit, CEO of New York-based payment processing firm Payoneer, made the claim that a single global non-fiat currency like Bitcoin was unrealistic.
With the crypto markets staging a small recovery on the day and looking to close out the year on a relative positive note despite 2018’s ongoing bear cycle, the number one currency by market capitalization continues to be divisive.
Galit’s take on Bitcoin hinges more upon what he views as an unattainable position for BTC to become a single, unifying global currency as some have pushed as a possibility for the decentralized coin.
Galit admits that the idea of a non-fiat, digital currency is appealing to large swaths of the internet as a way to get past the hurdle of international transaction barriers, but finds the application unrealistic.
“Despite the interests of lots of people out there in the Internet world who love the idea of frictionless commerce and frictionless money and avoiding fiat currencies, I don’t see it”
In particular, Galit cites the unlikelihood of the U.S. government accepting BTC for taxes on account of the extreme price volatility of cryptocurrency. As outlined by Galit, the U.S. government would be exposing itself to an exchange rate that fluctuates to the degree of BTC, an outcome that would never make its way through Congress.
“Now you could have a debate whether taxes are fair or unfair or whatever but they are a reality. There are going to be taxes because governments need revenues”, Galit says. “Countries actually need tax revenue in order to fund services for their residents.”
In November Ohio became the first state to allow taxes to be paid in Bitcoin, beginning with businesses and increasing in availability to individual filers. However, the process involves a trading platform which converts the paid BTC into dollars, protecting the state from the aforementioned volatility of cryptocurrency.
Galit also calls upon the responsibility of the Federal Reserve to maintain control over the nation’s fiat, a source of leverage that would become worthless in the event of BTC becoming a dominant currency,
“Central bankers are there to actually help manage the economies and provide kind of stewardship for those economies”, Galit says. “Part of that is actually managing currency in the interest rates for lending and in exchange rates. If you don’t actually have any control over a currency you’ve lost one of the major policy tools that you have, so what do you do?”
Galit’s comments come just one week after Yahoo Finance named payment platform Square as their company of the year. Square, which was founded by Twitter’s CEO Jack Dorsey, began offering Bitcoin as a trading option in November 2017, with the company going to great lengths throughout 2018 to push the feature as a legitimate division of their service. In November, Square announced that BTC based revenue for Q3 had climbed steadily to $43 million, upt from $37 million in the previous quarter.
Dorsey, who also presides as CEO of Twitter–a social media platform likely feeling the pressure to enter cryptocurrency following rival Facebook’s ties to a stablecoin–has long been vocal in his support for Bitcoin. In March, Dorsey broke headlines by stating that he believed Bitcoin could become the world’s single currency, catalyzed by internet adoption,
“The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be bitcoin”