Inflation’s Hidden Cost with Avik Roy - WBD519

Avik Roy is president of the Foundation for Research on Equal
Opportunity think tank and a policy Editor at Forbes. In this
interview, we discuss the Lummis Gillibrand Responsible Financial
Innovation Act, inflation’s compounding impact on the poor and
why Bitcoin provides optimism.


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On June 7th Republican Senator Lummis and Democratic Senator
Gillibrand introduced the Responsible Financial Innovation Act,
which aims to establish a regulatory framework for digital assets
in the US. Many Bitcoiners believe Bitcoin is designed to work
outside of regulatory oversight. But is this proposal inimical to
Bitcoin’s potential to positively contribute to society?


If Bitcoin is to play a dominant role within society, can it do
that outside of the law? Irrespective of Bitcoin, should
governments have a role in protecting citizens from the negative
impacts of the wider altcoin market? What are the dividing lines
between different digital assets? And, could the lack of
regulation in the near term actually be detrimental to Bitcoin in
the long run?


Bitcoin’s advocates are heavily engaged in trying to obtain
regulatory clarity - they fear continued uncertainty could delay
or damage its ability to provide utility to those who really need
it. This is particularly for those impacted by the ravages of
inflation.


The current inflationary environment has resulted in renewed
consideration of this economic condition. The issue is that there
is actually a deficit of understanding of inflation’s regressive
impacts. It impacts the poorest in society hardest, whilst
benefiting the richest. These impacts compound over time such
that inequality explodes even in low inflationary environments.


Does this mean inflation as a policy is a busted flush? Should
economies aim for zero inflation? These are radical policy shifts
that are unlikely to happen anytime soon. This is why Bitcoin
provides some with optimism: it’s trying to be the hardest money
the world has ever seen.