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80% of Central Banks Are Preparing a CBDC. Facing This Danger, Bitcoin Is Still Your Best Weapon.
The threat is becoming clearer.
The accounting firm PwC released the second annual Global CBDC Index report on April 4, 2022. In this report, PwC measures how far central banks have progressed in adopting their own digital currency. The result should not surprise you: more than 80% of central banks are interested in launching a CBDC, or have already done so.
For those of you not following the news, CBDC stands for Central Bank Digital Currency. A CBDC is a digital currency running on a Blockchain generally, the technology behind Bitcoin (but without decentralization of Bitcoin), and is issued by a central bank. Here is the Bank for International Settlements' vision for these digital currencies:
“CBDCs are the currency of the 21st century.”
The first major economy whose central bank launched a pilot project for its digital currency was China. It has become a national property in China since a speech by Xi Jinping in October 2019. The digital yuan is already very advanced, and China hopes to have the first-mover advantage in this area. The goal is clear: to challenge the hegemony of the American dollar over the world.
80% of Central Banks Are Preparing a CBDC
The European Union is not to be outdone, with the ECB having been toying with the idea of a digital euro for several months now. The European Commission is expected to present legislation next year to support its development. America is also talking more and more about exploring the creation of a digital dollar.
For PwC, it seems clear that these CBDCs are a good thing:
“CBDCs will facilitate more efficient, cheaper, 24/7 cross-border payments for the financial services industry. We expect CBDCs to greatly benefit cross-border transactions and the economies of all jurisdictions involved.”
The PwC report ranks retail CBDCs, those issued for use by the general public, and wholesale CBDCs, those used by financial institutions with central bank participation, out of a total of 100. Retail CBDCs are more mature than wholesale CBDCs, according to the report.
Nigeria's “eNaira” received a score of 95, making it the most mature of the two categories combined. On the retail CBDC side, the Bahamas was the first country to launch a CBDC: the Sand Dollar. Jamaica's CBDC, the Jam-Dex (ranked 4th), will launch this year. Thailand and Hong Kong top the list in the wholesale CBDC category for their joint project mBridge, which aims to facilitate cross-border payments.
Other major projects in the category include Canada, Singapore, France, and South Africa.
Finally, the PwC report includes an overview of stablecoins. I previously reported on the upcoming big flippening between Tether USDT and USDC at the end of 2021. The analysts involved in this report say that privately issued tokens will continue to evolve and coexist with CBDCs. The report also points out that stablecoins have become an “integral part of the cryptocurrency ecosystem,” and that it is “impossible” for a fund or institution “to be active in crypto without using stablecoins.”
The danger is looming for the future, and your best weapon is Bitcoin
This report is interesting, but it pretends to forget the essential issues that CBDCs bring to the people. These issues revolve around three axes: ownership, privacy, and freedom.
To make no mistake, the fact that more and more central banks are moving forward with launching their own CBDCs means that the danger is becoming clearer for the people. These CBDCs are an extension of the flaws of fiat currencies in the digital world. No more and no less. With these CBDCs, the powerful people of the current system will be able to control the people even better by monitoring all the transactions made.
The temptation will then be great to create profiles to categorize individuals and give them access to certain rights depending on whether they respect the arbitrary rules decided by the governments. The capacity for censorship and confiscation will be even greater.
For the Chinese digital currency, there is already talk of a possible expiration date to push people to spend their money and boost domestic consumption if necessary!
This is not something you want. If all this will be possible, it is primarily because these CBDCs will be centralized and controlled by a tiny minority of people. With stablecoins, the problem of centralization also arises, as does the transparency of the reserve assets. Stablecoins are a less bad solution than CBDCs, but they do not solve the real problem.
The real problem is solved by a big absentee in the PwC report: Bitcoin!
Because yes, it is Bitcoin that allows you to keep control because of the decentralization of its system and the absence of a leader. Some still doubt it, but more and more people will open their eyes to this reality in the coming years. While cash is not going to disappear in the medium term, the question arises in the longer term in a world where everything will become digital and where governments will push strongly in this direction.
This is why Bitcoin will become an increasingly used solution, and why seeing Bitcoin reach one billion users by 2030 does not seem like a utopia to me at all. As always, only the future will confirm or deny my vision. Wait and see.
In Bitcoin We Trust
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