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The Battle of the Central Bank Digital Currencies Will Happen, but Bitcoin Has Already Won the War

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Bitcoin is a much better option for the people.

Image: Pixabay

hina is criticized from all sides in the West for its authoritarian regime which has little regard for human rights. These criticisms are totally justified of course. However, this authoritarian regime gives China some advantages when making decisions where implementation speed is crucial.

Thus, at the end of 2017, in the midst of the euphoria that had taken hold of the Bitcoin market, China had not hesitated to ban ICOs (Initial Coin Offering), but also cryptocurrency trading platforms located in China.

To justify these strict decisions, China put forward concerns about financial stability.

On October 24, 2019, a simple speech by Xi Jinping changed China’s position on Blockchain. In an instant, this new technological field became a national priority for China.

The Chinese leader claimed that China should “occupy a dominant position in the emerging field of Blockchain” and that this technology would be used “in the daily lives” of all Chinese people.

At the heart of China’s blockchain strategy was the creation of a central bank digital currency (CBDC).

Since then, China has thrown itself wholeheartedly into the development of its e-RMB. Where Western powers hesitated for months to take action, China was able to get into the swing of things.

A year and a half after Xi Jinping’s speech, the e-RMB is a well-advanced project that is already being tested in several major Chinese cities. The goal of China is to be able to test it during the 2022 Winter Olympics which will take place on its territory.

Seeing China making great strides in its e-RMB project, the other major world powers have also started to consider the creation of such a central bank digital currency. Of course, the big democracies are always slow to act.

Countless discussions are taking place between the supporters of such a digital currency and the opponents.

In the end, Christine Lagarde recently revealed that the European Central Bank will decide on the creation of a digital euro in June 2021. If the decision was taken to create a digital euro, it would take about 4 years for the solution to be effective.

In the meantime, China will have had plenty of time to benefit from the first-mover advantage in this new field, which it intends to use to undermine the hegemony of the American dollar over the world.

In the United States, Jerome Powell recently explained the Fed’s position on a digital dollar in an interview for CBS’s 60 Minutes:

“We’re working very hard on a digital dollar. We’re also doing quite a lot of technological experiments. I mean, technology has made this a possible thing. And so we feel it’s our obligation to understand it. How would it work? What would the features of it be?

There are many subtle and difficult policy choices and design choices that you have to make. We’re doing all that work.”

The Fed is well aware that China is making great strides in this area as Jerome Powell said:

“China’s been working on a digital currency for seven or eight years now. We are actually evaluating that. Most major countries are now looking at the possibility of having a digital currency.”

Even so, the Fed’s decision to create a digital dollar would have nothing to do with competing with China, according to Jerome Powell. What will be decisive is whether a digital dollar could benefit the public the Fed serves:

“And really asking the question — in our very modern, advanced economy with a fast, efficient, full-blown payment system, would add a digital currency, a form of digital currency, would it actually benefit the public that we serve?”

I personally believe that the Fed is already working hard on a digital dollar. The goal is to be ready to act quickly once a political decision has been taken.

In my opinion, the United States and even Europe will be obliged to move in this direction to not leave China alone in this new field. It is not clear whether these central bank digital currencies could be a big hit with the general public.

However, no one can afford to miss out.

For China, an e-RMB is the missing piece to its surveillance arsenal, better known as the social credit system. Despite this, Beijing would like to pretend that this is clearly not the purpose of the e-RMB, as a senior central bank official has just said:

“We are not seeking full control of the information of the general public.”

The People’s Bank of China is well aware that the general public wants to be able to continue to retain some right to anonymity via paper money or cryptocurrencies:

“We know the demand from the general public is to keep anonymity by using paper money and coins.”

He wants to reassure us that China will be able to do the right thing with its e-RMB:

“We will give those people who demand it anonymity in their transactions. But at the same time we will keep the balance between the ‘controllable anonymity’ and anti-money laundering, CTF (counter-terrorist financing), and also tax issues, online gambling, and any electronic criminal activities. That is a balance we have to keep, and that is our goal.”

Coming from an authoritarian country that practices massive surveillance and repression, it seems hard to believe.

In any case, we can easily imagine that within a decade, citizens of America, Europe, and China will be pushed to use digital versions of their currencies.

A great deal of educational work will obviously be done with the general public. This educational work will ultimately serve the interests of Bitcoin. These central bank digital currencies could even act as a Trojan Horse for the mass adoption of Bitcoin.

Once the general public gets used to using these CBDC, they will face the same problem with current fiat currencies. Central banks will still have the ability to print as much fiat money out of thin air. The debasement will be even easier.

To protect their purchasing power and the fruits of their labor from government confiscation, the citizens of these countries will seek more protective options.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.inbitcoinwetrust.net/the-battle-of-the-central-bank-digital-currencies-will-happen-but-bitcoin-has-already-won-the-war-74758540b04b?source=rss——-8—————–cryptocurrency

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