Should Catholics use cryptocurrency?

Should Catholics use cryptocurrency? As cryptocurrency enters the mainstream, Catholics should learn more about it, and decide if its use aligns with an informed conscience. 

Should Catholics use cryptocurrency? The Church has not issued much guidance.

Highlights

By Marshall Connolly (Catholic Online)
2/3/2022 (2 years ago)

Published in Business & Economics

Keywords: Catholic, cryptocurrency, investing, morality, speculation, risk

LOS ANGELES, CA (Catholic Online) - Cryptocurrency is turning into a multi-trillion-dollar market as it enters the mainstream. Financial outlets now regularly cover prices and the number of technical experts commenting on its trade are growing. Importantly, everyday people are starting to encounter cryptocurrency as they go about their business. Several places are now accepting crypto payments, and many investment firms are offering cryptocurrency to investors. 

Cryptocurrency also has a lot of critics. Some nations, such as China have outlawed it, and many others are working to regulate it. in the United States, there is concern it can be used to evade taxes. And others warn it is closely associated with black market activity, including human trafficking, and rampant speculation, with some comparing it to a massive Ponzi scheme. 

First, what is cryptocurrency? Cryptocurrency is a form of digital cash that can be anonymously exchanged in nearly real-time between various parties around the globe. The security of the transactions depends on something called a "ledger," (technically called "blockchain") which keeps track of each transaction. However, instead of a single ledger, cryptocurrency trades are recorded on dozens, and even thousands of computers in real time. This prevents tampering and theft. The people who keep track of these ledgers are called "miners," and in exchange for using their electricity and computing power, they are paid a small amount for each transaction recorded on their computers.  

Cryptocurrency is entirely digital, so it is a virtual product. There are no actual coins or bills printed, ever. Anyone can buy and sell cryptocurrency anywhere in the world, as long as they can connect to a virtual exchange, of which there are dozens. It requires a lot of technical expertise to launch a new cryptocurrency, and their values can fluctuate wildly. Some coins, such as Bitcoin, are worth a large sum of money when converted to "real" money, which is sometimes called "fiat." (Think: dollars.) Others are worth virtually nothing, and a person can buy thousands of virtual coins with just a dollar. The prices change by the minute, and can sometimes fluctuate by double-digit percentages in a single day. 

These wild swings make the market fun, yet dangerous. Speculators like to buy a lot of cryptocurrency, then "dump" it when the price goes high, causing the price to crash again. Fortunes can be made or lost in a matter of minutes. 

Because cryptocurrency is anonymously exchanged, it is difficult to monitor and track. This makes it an appealing form of currency for the black market. For this reason, some people suggest it should be outlawed. (Wait until they learn how dollars are used.)

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At the same time, cryptocurrency delivers unparalleled freedom to individuals by democratizing the marketplace. Any person can freely transact with any other, as long as both agree. Traditional barriers, typically established by governments and banks for the purpose of profit and control, are circumvented by design. 

Knowing this, should Catholics use cryptocurrency? 

The Church has not yet issued clear guidance on the matter. Obviously, the Church is concerned with how cryptocurrency is used . But again, cryptocurrency is merely a medium of exchange. History tells us criminals will transact in any medium of exchange they can, be it cryptocurrency, dollars, cigarettes, food, or other commodities. 

As Catholics, we should consider how we are using the currency, just as we should evaluate how we use fiat money (dollars, pounds, pesos...). It is not the thing itself that is evil, but how it is utilized. 

What is the motivation for using cryptocurrency? If we are investing, and crypto is part of our high-risk portfolio, this is likely no worse than holding stocks that are also high-risk, high reward. However, if we are gambling with our money, especially to the point we cannot satisfy our other obligations, like paying our bills, then no, we should avoid it altogether. 

Until the Church issues guidance, which is unlikely for now, it is up to the individual to decide for themselves. And as with all things, we should make an examination of conscience when deciding if the use of any thing is good and right for us, or evil.