- Pompliano said that both ETH and USD both have a similar monetary policy, which stems from a limited supply.
- Unlike ETH, Bitcoin and gold supplies are limited by design and they are used as a store of value.
Anthony Pompliano, the co-founder and partner at Morgan Creek Digital, has claimed that Ethereum is very similar to fiat currency. On his Off-chain page on Substack, he said:
The issue is that Ether is no different than a fiat currency. Fiat currencies have (a) no fixed supply, (b) an inflationary supply schedule, and (c) monetary policy decisions that are decided by a small group of individuals.
Similar to the USD, the ETH monetary policy is based on time to time issuance of the asset as it does not have limited supply. He added that Ether is not a store of value either.
The good news for those that believe in ETH as money is that every change to the supply schedule so far has REDUCED the new issuance rate, but the bad news is that the option is always available to increase the new issuance rate. This is similar to our current fiat monetary policies, where the decision-makers can increase or decrease the production of new money coming into the system.
Pompliano noted that only Bitcoin and gold have the characteristics of money and store of value as they have limited supply. Bitcoin has only 21 million coins that can ever be mined. So far, over 17 million have been mined and nothing can be done to increase the supply. Gold also has a finite supply as it is a non-renewable source, unlike ETH.
The Bitcoin bull agrees that the DeFi movement is a crucial part of the cryptocurrency ecosystem. However, he said the movement must create a better form of money that is compatible with the ETH-based DeFi movement.
Share
