The Digital Dollar and the Bitconomy
It was just a matter of time before government officials decided to join the crypto explosion instead of just trying to kill it. Like many behemoths such as government agencies and large corporations, the move is a bit late and extremely slow. One of the reasons behind this turtle pace integration is because many, not all, companies or organizations that become “too big to fail” develop a stubborn and arrogant culture. Some fiat currency creators still believe that cryptocurrencies are nothing but a fad, a means for criminals to execute their operations, and a big scam that will soon collapse. But within government there are players who really see the value and technological innovation behind the blockchain and crypto craze. They are witnessing first hand not only how retail investors are throwing money at Bitcoin and other alt-coins, but they are also learning that billions of institutional dollars are being transferred from traditional investment vehicles such as stocks and bonds to cryptocurrencies. This makes them extremely nervous. Hence, the urgency to get organized and create a global digital dollar.
“The time has come to explore options for a digital dollar, and the principal members of the Digital Dollar Foundation (The Foundation) have sounded the call for this needed dollar innovation. Together with Accenture, a global leader in CBDC advancement, the Foundation has formed the “Digital Dollar Project” (the Project) to study potential avenues to utilize U.S. digital dollar tokenization and its implications on the U.S. and global economic and financial systems. The Project will seek to facilitate a public debate about a U.S. dollar CBDC adoption. To ensure the dollar can serve the broadest possible range of uses in a increasingly digital global economy and thereby maintain its privileged position and support orderly adjustment in international monetary relations, consideration needs to be given to plans to adopt a digital dollar issued by the Federal Reserve System (Fed).”
The CBDC (central bank digital currency) is still early in its development. Most countries are still only starting to explore the idea, such as the U.S. form of a digital dollar. A few ambitious countries, including China with its digital yuan and South Korea, have already finished a demo and are piloting the technology. But a CBDC has yet to be deployed on a large scale.
Each country exploring a CBDC has its own approach. Several CBDCs are based on the same general principles and blockchain technology underlying Bitcoin, the original cryptocurrency. At this point it is too late for them to fight blockchain, cryptocurrency, and even other derivatives of the technology such as Defi, NFTs, and infrastructure tokens. I totally believe that any fiat currency, as well as CBDCs and deregulated, decentralized cryptos can co-exist. It is the arrogance and control hunger of certain individuals, specially for profit sake, that eats them alive when they see “The People” (El Pueblo) use resources without their need or their approval and become more independent and informed. The so called “Critique Professionals” can be found on any social media platform trying to come up with very creative reasons to trash crypto and on the other side trying to trash fiats, but at the moment all currencies have a use case and are needed.
To say, that we valuate cryptocurrencies in dollars (i.e. BTC is around USD$50k in value) says a lot about the importance of both and how they need each other to work together and to be comparable. You can not know tall, if you do not know short and viceversa.
This technology advances so fast and it is so uncertain that anything an happen. In the meantime we will keep monitoring this and other variables to stay on top of these protocols.