Today, US President Trump first published tweets about "bitcoin" and "cryptocurrency" during his tenure, responding to Facebook's issuance of its own currency.
This is the general trend. Governments around the world have responded to the rise of cryptocurrencies, some of which respond to this trend by issuing their own digital currency. An official of the People's Bank of China (PBoC) confirmed on July 8 that Beijing is studying the digital renminbi.
Agustin Carstens, President of the Bank for International Settlements (BIS) (headquartered in Switzerland), approved the Central Bank Digital Currency (CBDC) project. The banking tycoon said in an interview with the Financial Times: "The Bank for International Settlements (BIS) actively supports the central bank to participate in the digital currency. Carstens even said that the progress is faster than we think. Now the central bank digital currency (CBDC) has a market, So it is very necessary to carry out this project now. The Bank for International Settlements (BIS) has created a financial technology (financial technology) center to help the project.
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The Bank for International Settlements (BIS) also recently published an in-depth report on financial technology to explore in depth how this emerging industry can improve its business, enhance financial inclusion, improve economic efficiency, and even explore how certain products are financially stable. Privacy poses a threat.
Other well-known central bank affiliates also expressed interest in cryptocurrencies. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), presented his views on cryptocurrencies at the World Economic Forum in Davos. Christine Lagarde, who will be the governor of the European Central Bank (ECB), told reporters: "The cryptocurrency is shaking the banking system."
Dr. Doom believes that central bank digital currency (CBDC) will result in loss of cryptocurrency value
Analysts and economists have begun commenting on the matter as the central bank's digital currency (CBDC) enters global financial markets. Among them, the most famous is New York University professor and economist Nouriel Roubini, who is known for hating bitcoin. At the end of last year, Roubini posted a comment on Project Syndicate, ridiculing that the rise of the central bank's digital currency (CBDC) would "turn off the cryptocurrency to deceive people."
Roubini wrote in Project Syndicate: “The Central Bank Digital Currency (CBDC) may (will) replace all private digital currency payment systems.” He explained that the central bank is different from retail banking and PayPal. Services such as retail banking and PayPal are subject to restrictions such as high transaction fees, transaction failures, and high barriers to entry; central banks are “efficient and low-cost” in terms of intermediaries and loans.
He also wrote: "By allowing anyone to trade through the central bank, the central bank's digital currency (CBDC) will break the current situation, and demand for cash, traditional bank accounts, and even digital payment services will decrease."
The economist even said that the central bank's digital currency (CBDC) will take advantage of the central bank's technological advantages and will no longer need any "non-extensible, cheap, secure or actually centralized" cryptocurrency (eg bitcoin). .
Cash will die
Although Roubini's point of view is logically reasonable, he misses the key point: the whole world needs a completely private form of money, such as bitcoin. The issuance of the Central Bank Digital Currency (CBDC) will only make this demand stronger.
Today, digital currency trading seems to be seamless. Most PayPal transactions are easy to complete. In Canada, you can “e-transfer” at a low cost, and you don’t have to worry about stagnation on the way to the transfer. However, there are some exceptions. Some banks deny transactions with cryptocurrency exchanges. Visa and Mastercard banned transactions with Wikileaks, which prompted Wikileaks to move into the world of cryptocurrencies and become an early adopter of Bitcoin.
Central bank digital currency (CBDC) transactions are more likely to be censored by the government, which has caused some to worry that their financial privacy rights are threatened. In some countries with mature digital payment infrastructure, the use of cash has been rapidly reduced, which has already made people see this future.
In China, WeChat is called “Super App” by some people. It integrates information, payment, financial services and games, and has successfully dominated the economy. A study shows that Alipay is also a participant in digital payments. People can use WeChat to pay most of the cost, which means that people just leave a complete financial transaction record for convenience.
Now, the People's Bank of China (PBoC) revealed that banks are joining the digital currency game. According to the South China Morning Post (SCMP), Wang Xin, director of the research department of the People's Bank of China, said that if Libra, the cryptocurrency issued by Facebook, is accepted, the People's Bank of China (PBoC) will launch its own digital assets. In addition, it is reported that the Central Bank has obtained approval from the State Council of China to promote this project.
Yes, cash will no longer be used. As Bank of America Deputy Governor Masayoshi Amamiya told Reuters, the use of central bank digital currency (CBDC) has forced the government to abandon the use of cash in society. In some countries with negative interest rates (such as Japan, Sweden, Denmark, etc.), consumers hoard large amounts of cash, making the central bank unable to fully control the money supply, resulting in unexpected risks. The central bank's digital currency (CBDC) will not have such problems. The central bank is free to withdraw funds from user accounts, which is why the central bank's digital currency (CBDC) is being promoted.
Basic needs for bitcoin
As mentioned above, countries are ignoring the use of cash, and when using digital payments, they all have a problem – privacy. Let us look at China's "social credit" system. It is not difficult to imagine that the credit future of urban residents will be regulated, and their financial transactions are also an indicator of social credit scores. This credit will determine the services, employment and housing security they can enjoy.
Bitcoin educator Andreas Antonopulos believes that this violates freedom. He claims that money is a language. The fact that certain transactions have become illegal transactions or cut infrastructure has become an increasingly serious problem in today's society. Based on Ethereum's decentralized trading platform, Airswap (AST), its cryptocurrency character and consultant Rob Paone recently wrote on Twitter: “If a country does not use cash, it means it is a financial supervisor. s country."
In theory, government supervision can protect citizens from criminal behavior. But cryptocurrency researcher Hasu and CEO of Three Arrows Capital, Susie, wrote in a post on digital cash: "The spectre of terrorism and organized crime is often seen as "the reason for proper government regulation." However, it is very naive to assume that the government itself will never do evil. The two men also wrote that the cashless society will only be less and less, because the cashless society is prone to tyranny and excessive power.
A country with a regulatory mechanism is where Bitcoin shines. Currently, most public blockchains are used to mine data. Analytical companies that work with financial regulators (such as Chainalysis) can create a trading data network and even find places where people leak information themselves.
However, Bitcoin can still exist in private currency through appropriate technologies and tools such as CoinJoin. Earlier this year, Arthur Hayes, CEO of BitMEX, a cryptocurrency exchange, posted a post on the BitMEX blog to delve into the incident.
Hayes writes: “The future digital currency is central, top-down and subject to review. Compared to Bitcoin, it is pale in many ways.” Bitcoin is made up of volunteers, volunteers, independent and self-interested actors. The network runs, they neither need nor require any benefits or licenses. They actually want a few base points for the transaction fee. ”
He continued to write that Bitcoin would be used when cash was abolished. Because, whether it is "moral" or "psychologically", everyone needs to protect their personal information.
Disclaimer: This article was written by the author of LongHash. The opinion is solely on behalf of the author and does not mean that LongHash agrees with its views or confirms its description.