1/🧵
CBDCs have gotten a lot of attention. Many are claiming they are going to roll out in the next few months. This includes a "digital dollar" when FedNow goes live. This is ignoring what is taking place.
1/🧵
CBDCs have gotten a lot of attention. Many are claiming they are going to roll out in the next few months. This includes a "digital dollar" when FedNow goes live. This is ignoring what is taking place.
https://leofinance.io/posts/taskmaster4450/usdc-will-be-the-true-fedcoin
2/ Central banks already have their own stablecoin, they are called reserves. This is a bank instrument that is pegged to the unit of currency and redeemable in banknotes. These are only available to banks who use it to settle.
3/ CBDCs are not in the interest of central banks. They do not need them. Instead, it is politicians who are frothing at the mouth to get them. Here is where we see the struggle for power. Yet developing one isnt going to work.
Who do you think will gain the upper hand in months to come? The central bankers? or the politicians?
In such a scenario, how do you foresee the crypto space will respond to it?
4/ A more likely path could be for a government like the US to simply let Circle advance with USDC and then incorporate that into its control. It can do this through regulation or, worse, by effectively making it a GSE.
5/ This could include having Circle housing all of it backing assets at Treasury, putting it firmly under the control of the government. This is the Trojan Horse Congress could use. It is also much easier then trying to form its own coin.
The politicians will try to have it their way and probably win it. It would be interesting to see how it all plays out.
Circle I read is withdrawing holding US Debt end of this month because that Debt ceiling crisis is going to unfold very soon starting next month.
The CBDCs might have a chance with regulations with the law. Crypto might be a solution, if the ports are not blocked. Cash also, even if is not actual tender any more. Albanians used DM years after Euro was introduced.
The USDC in Nigeria has suffered setback to its usage over the many months after its creation. I only wonder whether the government do not have competent hands in advisory or they just choose to do something that has no future.
The banks don't want a CBDC and it's the government that wants it. In the end, it's a battle of control and I still think they need to fully stress test the system before they roll it out. Otherwise, it will be a disaster