If you look from a systemic perspective, Bitcoin has been nothing more than another electronic asset bubble, while not a QE tool explicitly used by the Fed - it has accomplished the same thing, but much faster. What took decades and years for QE to do in other markets, Bitcoin did inside of a few months. While it's true that Bitcoin only goes up because US Dollars (USD) and other fiat currencies buys, the net effect is a near infinite velocity of money. One subtle problem the Fed has dealt with perhaps more than inflation and others is Velocity of money, which is in steady decline since the credit crisis:
Basically, Velocity of money is how quickly money is 'spent' and moved around the economy. Trillions of QE money on banks balance sheets is not helpful for the economy. The Fed knows this, but is limited in its creativity. Interestingly, if you look at the above chart when Velocity of money was in peak decline, it is about the time Bitcoin was introduced. We have exposed how we believe anonymous forces inside the US Government are if not completely, somewhat responsible for the creation of Bitcoin, and in the very least participated in the design. This isn't a conspiracy theory, it is macro analysis. Who was the most capable group who had the world's best cryptographers, mathematicians, and huge budget? (NSA). Who had an economic need for Bitcoin to solve the problem of Velocity of money (The Fed).
Cash has the distinct advantage of being anonymous. You can put cash under your mattress or in a vault, and no one knows about it except you. A national cryptocurrency would make it far more difficult for criminals to hoard money because all transactions would be recorded in the government ledger. If a transaction was deemed illegal, the parties to the transaction could be identified. This is also true with bitcoin, whose ledger is viewable to anyone. Despite the negative press about bitcoin being used for illegal transactions, bitcoin is not anonymous, and criminals who use it often do not understand that their transactions are being recorded.
There is another reason for governments to like the idea of a national cryptocurrency: strengthening the power of monetary policy to help manage the economy.
We published this insight in multiple articles months ago and in our book Splitting Bits: Understanding Bitcoin and the Blockchain.
The WAPO story is clearly setting the stage for something, as WAPO has become the goto CIA mouthpiece for PsyOps and other agencies in "Big Intel."
That's it, now go spend your Bitcoin!
For a detailed breakdown how the financial system really works, checkout Splitting Pennies.