Don’t Buy Bitcoin: Everything You Need to Know About Our Government Cryptocurrency

Isaiah McCall

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We don’t need Bitcoin.

We don’t need Ethereum.

We have the Federal Reserve Coin, or what is more commonly known as Central Bank Digital Currencies (CBDCs).

If you’re not paying attention to crypto or CBDCs you’re in for a rude awakening. Already in China, they’ve issued their Digital Yuan as a means to closely monitor their citizen’s spending habits.

In this Brave New World governments will know exactly what kind of weird stuff you’re buying. I’m sure Aldous Huxley and Orwell are rolling over in their graves right this second.

The United States is next up to the plate with the digital dollar — so let’s talk about the implications of this move.

What are CBDCs?

Central bank digital currencies (CBDCs), as the name suggests, are digital currencies issued by central banks.

Although in their infancy, 81 countries are now exploring central bank digital currencies, which is 46 more than this time last year.

There are several pragmatic benefits to fully digital fiat currency —

  • More velocity of money because funds can be moved around faster
  • No service or exchange fees, unlike on Robinhood or Coinbase
  • CBDCs are stored directly on your smartphone and don’t even require a wifi connection.
  • Payment are faster than that of credit cards or cash
  • Backed by a government, unlike Bitcoin or Ethereum

CBDC of any given country are often referred to as a digital counterpart; however, some countries anticipate CBDCs overtaking physical fiat entirely.

The 🔑 Difference Between CBDCs and Decentralized Cryptocurrencies

If Bitcoin was a salesman its value proposition would be decentralization.

That’s what you’re buying Bitcoin for — so that no one can screw with it.

The Bitcoin and Ethereum networks are uncensorable and nobody can stop a user from sending or receiving a transaction on the network.

Another major reason why cryptocurrencies have become so popular is that most of them are deflationary. Bitcoin is a great example: it has a fixed total supply of 21,000,000 bitcoins and by 2035 99% of that will be on the market.

CBDCs, on the other hand, are issued by the same central banks that destroyed the economy in 2008.

These central powers do have dishonest middlemen and aren’t immune to money printing from governments.

Record-breaking inflation is here

Did you know that the government printed one-fourth of all U.S. cash ever created last year alone? Oh — wait a second, I guess they forgot to tell you about record-setting inflation.

wHy DoNt YoU TrUsT tHe GoVeRnMeNt?

CBDCs aren’t here to eliminate inflation, they are here to enable total financial surveillance.

While cryptocurrencies like Bitcoin can be used in a private manner, CBDCs allow the recording of every single transaction in a centralized database owned by the government.

Every payment you make will be registered and stored — potentially forever.

Which Countries Are Working on Their CBDCs?

According to estimates, over 70% of central banks in the world are planning to launch their own CBDCs in the future.

China is leading the way with its Digital Yuan, while India, Turkey, Russia and the European Union are at an advanced stage with their own CBDCs.

So where does the United States stand?

It’s tricky.

Federal Reserve Chairman Jerome Powell has publicly stated he hates cryptocurrencies especially stablecoins. He even said he’d create a CBDC as long as congress votes for it.

“You wouldn’t need stablecoins; you wouldn’t need cryptocurrencies if you had a digital U.S. currency,” said Powell in a congressional hearing. “I think that’s one of the stronger arguments in its favor.”

While China has already airdropped some of its Digital Yuan to Chinese citizens, America is barely entering the initial phase of engineering a digital dollar.

Powell did promise, however, that there will be an important announcement regarding a U.S. CBDC sometime in 2021.

Brace your anus.

Are CBDCs a Threat to Bitcoin?

Yes — but there’s both good and bad news.

The good news: CBDCs make collecting taxes more efficient.

Now for the bad news.

CBDCs make collecting taxes more efficient.

And for the even worse news, central bank digital currencies are fully controlled by the politicians, provide no real privacy or anonymity, and just like traditional fiat currencies, they are prone to devaluation caused by unrestricted money printing.

If given a choice, moreover, the financial literacy nobody would want to own CBDCs instead of real cryptocurrencies such as Bitcoin or Ethereum.

But many governments around the world are not giving you a choice. This is echoed through stricter regulations or even bans of crypto.

Even Ethereum creator Vitalik Butrein said governments could severely marginalize cryptocurrency and make it something only fringe communities use.

Bottom Line

Ok, so will decentralized cryptocurrencies be able to survive the onslaught of central bank digital currencies? Only time will tell.

One thing is for certain: Crypto enthusiasts should start preparing for what is inevitable.

CBDCs will be ubiquitous very soon.

After that, I’m not sure what will happen (but it’s probably not good).

Ever since I was a child it was my dream to become a financial advisor. Unfortunately, it never came true. Therefore I am not a financial advisor and you should do your own research and not just listen to random people on the internet. Nothing contained in this publication should be construed as investment advice.

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USA Today Reporter and Ultramarathoner. I write about Cryptocurrency, Fitness Hacks, and Greek Philosophy. Also a diehard Trekkie | mccallisaiah@gmail.com

Jersey City, NJ
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