This decade could be the most essential one in mankind’s monetary history. The devil will be in the information– who controls stablecoins, who manages CBDCs, and what sort of CBDCs can be launched?
Stablecoins– Pegged to USD but Outside the Fed’s Bounds
Stablecoins are tokenized fiat currency. They exist as a crypto adoption bridge in between the blockchain area and traditional finance. In a world in which one would not require fiat currencies to pay taxes and groceries, their function would be more a question of benefit instead of requirement.
If everything was crypto-based, the issue of volatility might be fixed by a stablecoin collateralized by other cryptocurrencies, such as Dai (DAI). By doing this, there would be a leveled rate structure for products and services.
The biggest concern that stablecoins represent in the existing monetary system is two-fold. 1. They threaten federal government monopoly over money issuance, and 2. Their prospective to slowly replace nationwide currencies. This is perhaps why Facebook’s Libra, now Diem stablecoin, got such stiff opposition from the United States political leaders and regulators, particularly with Facebook currently wielding the power it does.
So much so that the chief Diem financial expert, Christian Catalini, mentioned that Diem will be phased out as soon as the Fed introduces its own CBDC– Central Bank Digital Currency.
5/ The Diem Reserve will be phased out when a CBDC becomes available. The network is designed to improve the functionality of fiat, not to take on it.
— Christian Catalini (@ccatalini) March 9, 2021
The ramification of this tweet is informing. If anybody would have trespassed on the Fed’s money monopoly, it would’ve been Facebook with its successfully limitless budget plan to establish the stablecoin. It was stopped in its tracks, now just an interim stablecoin waiting for a CBDC to reveal up.
Toute l’actualité en temps réel, est sur L’Entrepreneur