It occurs to me that CBDCs destroy the last useful function of fiat. It’s physical nature. Which in turn would reduce fiat to completely functionless. A tool with no use case.

I understand that authoritarians find this physical destruction desirable. That makes it’s destruction of their power all the more poetic. Destroyed by their own lust for power.

But from an engineering perspective you have a tool that used to do many things. But now only has 1 useful function because of a competitor (Bitcoin). So you decide to make a shitter version of the competitor’s product and remove the 1 functional thing your product does.

What’s the natural conclusion of making a shitter version of something else? People want the other thing, not your shitty copy.

Reply to this note

Please Login to reply.

Discussion

What if CBDC’s are “backed by gold”?

This would make it easier for countries to de-dollarize.

Who trusts the gold repositories? LMA is attempting to “digitize” bars, but is still - and always be a trust issue between the cohorts using the derivative.

Agreed. But if that trust and verification process could be created for countries with SWIFT problems, that could get interesting.

Sure - whether it’s a Bankor-style commodity basket or a bitcoin derivative coin, same security model issue as fiat/gold peg - trustlessness.