Thriller Insider: Digital Dollar Bitcoin Analysis
Download MP3What a Digital Dollar looks like…
We are on the cusp of a new monetary era. Central bankers around the world are increasingly worried that privately controlled digital currencies will relegate them to the sidelines of monetary affairs. To avoid this fate, central banks have been studying, and in some cases actively pursuing, issuing digital currencies of their own: so-called central bank digital currency (CBDC).
Today’s tech giants have the scale and consumer reach, not to mention the incentive, to create their own digital moneys that threaten to compete with or even displace the public moneys that central banks issue and manage.
The Peoples Bank of China is reportedly poised to launch its CBDC as soon as this year. If it succeeds, other major central banks are sure to follow. The stakes are especially high for the United States because a successful digital currency—whether controlled by a private company or by China—could imperil the U.S. dollar’s status as the dominant global currency, a source of “exorbitant privilege” for Americans.
Congress should authorize the Federal Reserve to implement a broadly accessible, U.S. dollar-based CBDC by giving the general public—individuals, businesses, and institutions—the option to hold accounts at the central bank, which we call FedAccounts. FedAccounts would offer all the functionality of ordinary bank accounts with the exception of overdraft coverage. They would also have all the special features that banks currently enjoy on their central bank accounts, as well as some additional, complementary features. The FedAccount program would put government-issued digital or “account” money on par with government-issued physical currency, transforming digital dollars into a resource that anyone can use.
The technology behind the digital dollar would be HyperLedger DLT, being designed to be fungible, meaning regardless of what central bank might end up minting its currency using the technology, every token will have the same value as the underlying asset, regardless of whether the token had been previously used for some nefarious purpose and will comply with the ERC-1155 token standard.
When it comes to money and payments, integration and interoperability are demonstrably better than fragmentation and balkanization. On top of that, distributed ledger technology, however ingenious its conception, remains extremely slow and inefficient compared to centralized ledger systems. For central banks, these cryptocurrency design features are a needless distraction.
The FedAccount system would be seamlessly interoperable with the existing system of money and payments and would rely on low-cost, reliable systems and technologies that the Federal Reserve has used successfully for decades. It would not charge interchange fees on debit card transactions, FedAccounts would reduce or eliminate an implicit tax on retailers and consumers.
The Digital Dollar effects on Bitcoin
Important to keep in mind. Bitcoin has the lead and will continue to have the lead in the digital currency space. The creation of the Digital Dollar at its core and infrastructure level isn’t really a challenge for Bitcoin. Bitcoin wins hands down.
China’s digital yuan has been in the works since 2014. The launch date, however, still remains unknown but is expected later this year. Industry insiders told The Global Times that China should accelerate the launch of its digital currency amid the coronavirus pandemic and economic slowdown. This will be Bitcoin first major test.
People’s Bank of China Digital Yuan, United States of America Digital Dollar, Bitcoin and other crypto currencies. Currency Wars are upon us.
What happens to cash when the digital dollar is created, does it become worthless. Will we continue on using the same fiat money system that hyper inflates the digital dollar as well.
Currency devaluation, or debasement, has always been synonymous with inflation, where the amount of money in circulation relative to economic activity increases. When the Federal Reserve System started creating hundreds of billions of dollars out of thin air, they called it ‘quantitative easing’ of the money supply. When that didn’t work, they created more money and called it ‘QE2’, instead of saying: ‘We are going to print more dollars — and hope it works this time.’” Now they are calling this QE infinity. Does the Fed introduce a new currency and if so do we lose all value in our current USD.
Worse case scenario a new FedCoin currency is created including the wiping out of previous USD debt. Digital FedCoin becomes the world reserve currency backed by gold and/or a basket of other currencies, still highly centralized and highly controlled. However to make social and economic choices regarding this, the FED implements governance in a two tier token system that is well coordinated with other central banks holding the vast majority of wealth very similar to MakerDAO…while the smaller stable FedCoin token is distributed to everyone else all while keeping the programmable money aspect in tact. This pulls the rug under bitcoin. They then take additional steps to make it extremely difficult to receive and/or send and/or store legally if not held in a digital online/offline wallet not tied to a digital identity or an exchange. This creates a secondary market in the Bitcoin, Crypto industry and an onslaught of privacy coins become the standard and/or Bitcoin forks implementing a privacy component to its protocol.
Best case scenario old cash currency is still used, currency wars continue, hyper inflation increases and most people make the move to bitcoin and becomes the world reserve currency.
Citation: Ricks, Morgan and Crawford, John and Menand, Lev, Digital Dollars (February 1, 2020). Vanderbilt Law Research Paper 18-33; UC Hastings Research Paper No. 287; George Washington Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3192162 or http://dx.doi.org/10.2139/ssrn.3192162
We are on the cusp of a new monetary era. Central bankers around the world are increasingly worried that privately controlled digital currencies will relegate them to the sidelines of monetary affairs. To avoid this fate, central banks have been studying, and in some cases actively pursuing, issuing digital currencies of their own: so-called central bank digital currency (CBDC).
Today’s tech giants have the scale and consumer reach, not to mention the incentive, to create their own digital moneys that threaten to compete with or even displace the public moneys that central banks issue and manage.
The Peoples Bank of China is reportedly poised to launch its CBDC as soon as this year. If it succeeds, other major central banks are sure to follow. The stakes are especially high for the United States because a successful digital currency—whether controlled by a private company or by China—could imperil the U.S. dollar’s status as the dominant global currency, a source of “exorbitant privilege” for Americans.
Congress should authorize the Federal Reserve to implement a broadly accessible, U.S. dollar-based CBDC by giving the general public—individuals, businesses, and institutions—the option to hold accounts at the central bank, which we call FedAccounts. FedAccounts would offer all the functionality of ordinary bank accounts with the exception of overdraft coverage. They would also have all the special features that banks currently enjoy on their central bank accounts, as well as some additional, complementary features. The FedAccount program would put government-issued digital or “account” money on par with government-issued physical currency, transforming digital dollars into a resource that anyone can use.
The technology behind the digital dollar would be HyperLedger DLT, being designed to be fungible, meaning regardless of what central bank might end up minting its currency using the technology, every token will have the same value as the underlying asset, regardless of whether the token had been previously used for some nefarious purpose and will comply with the ERC-1155 token standard.
When it comes to money and payments, integration and interoperability are demonstrably better than fragmentation and balkanization. On top of that, distributed ledger technology, however ingenious its conception, remains extremely slow and inefficient compared to centralized ledger systems. For central banks, these cryptocurrency design features are a needless distraction.
The FedAccount system would be seamlessly interoperable with the existing system of money and payments and would rely on low-cost, reliable systems and technologies that the Federal Reserve has used successfully for decades. It would not charge interchange fees on debit card transactions, FedAccounts would reduce or eliminate an implicit tax on retailers and consumers.
The Digital Dollar effects on Bitcoin
Important to keep in mind. Bitcoin has the lead and will continue to have the lead in the digital currency space. The creation of the Digital Dollar at its core and infrastructure level isn’t really a challenge for Bitcoin. Bitcoin wins hands down.
China’s digital yuan has been in the works since 2014. The launch date, however, still remains unknown but is expected later this year. Industry insiders told The Global Times that China should accelerate the launch of its digital currency amid the coronavirus pandemic and economic slowdown. This will be Bitcoin first major test.
People’s Bank of China Digital Yuan, United States of America Digital Dollar, Bitcoin and other crypto currencies. Currency Wars are upon us.
What happens to cash when the digital dollar is created, does it become worthless. Will we continue on using the same fiat money system that hyper inflates the digital dollar as well.
Currency devaluation, or debasement, has always been synonymous with inflation, where the amount of money in circulation relative to economic activity increases. When the Federal Reserve System started creating hundreds of billions of dollars out of thin air, they called it ‘quantitative easing’ of the money supply. When that didn’t work, they created more money and called it ‘QE2’, instead of saying: ‘We are going to print more dollars — and hope it works this time.’” Now they are calling this QE infinity. Does the Fed introduce a new currency and if so do we lose all value in our current USD.
Worse case scenario a new FedCoin currency is created including the wiping out of previous USD debt. Digital FedCoin becomes the world reserve currency backed by gold and/or a basket of other currencies, still highly centralized and highly controlled. However to make social and economic choices regarding this, the FED implements governance in a two tier token system that is well coordinated with other central banks holding the vast majority of wealth very similar to MakerDAO…while the smaller stable FedCoin token is distributed to everyone else all while keeping the programmable money aspect in tact. This pulls the rug under bitcoin. They then take additional steps to make it extremely difficult to receive and/or send and/or store legally if not held in a digital online/offline wallet not tied to a digital identity or an exchange. This creates a secondary market in the Bitcoin, Crypto industry and an onslaught of privacy coins become the standard and/or Bitcoin forks implementing a privacy component to its protocol.
Best case scenario old cash currency is still used, currency wars continue, hyper inflation increases and most people make the move to bitcoin and becomes the world reserve currency.
Citation: Ricks, Morgan and Crawford, John and Menand, Lev, Digital Dollars (February 1, 2020). Vanderbilt Law Research Paper 18-33; UC Hastings Research Paper No. 287; George Washington Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3192162 or http://dx.doi.org/10.2139/ssrn.3192162
