You may have recently come across pictures of a supposed cryptocurrency wallet from China. However, this topic is not new, and the rumors have been circulating since April 2020. A central bank digital currency is the money issued by central banks using a central database.
In practice, add the advantages of a predictable release and the impossibility of reversing transactions. However, for governments, the complete control of currency trading makes it possible to implement negative interest rates and even limit the spending of money.
For example, ban 50% of the salary to be spent on food, health and housing, or put 2% as a monthly fee for those with a deposit of more than R$100,000. In any case, the sky is the limit for giving rulers more power over people.
A centralized CBDC system allows governments to restrict access to certain countries or businesses. If Apple does not pay an “app tax” in Brazil, the government can ban the use of your digital currency in that store. Likewise, a credit card-type broker who continues to provide such a service can easily be cut off from the financial system.
CBDC is a Trojan horse, which uses the appearance of “open banking” to put the central bank at the center of all financial transactions using the local currency. The citizen will get angry when he realizes that he can no longer buy the drink or play the role of the girl who sells gas on OnlyFans.
This speech is as old as “Blockchain yes, Bitcoin no.” Thirteen years have passed since the invention, and to this day there is not a single case of the technology being used outside of cryptocurrencies. Microsoft and IBM have already fired the teams they worked on, but, of course, there are still plenty of scam artists selling dreams.
El Salvador, a South American country, adopted bitcoin as one of the official currencies in September 2021. There, it is necessary to accept payments in cryptocurrency, both at McDonald’s and when renting a property. For this purpose, the second layer technology of Bitcoin, the Lightning Network, has been adopted.
Undoubtedly, one of the ways to escape the clutches of governments is to turn to stablecoins, which are currencies similar to the dollar. Even if you choose a decentralized model, such as Terra USDT (UST) or DAI, it will be nearly impossible to convert it into an equivalent CBDC.
It is very easy for a cryptocurrency issuer to monitor who is acting exchange or a p2p broker, blocking these addresses and values. Therefore, the trend is for people to abandon the credit system altogether, which is secured by a decentralized model. In this way, Bitcoin will be with open arms to receive these refugees.
“Writer. Analyst. Avid travel maven. Devoted twitter guru. Unapologetic pop culture expert. General zombie enthusiast.”