CBDC 🛑 Ultimate Guide To What Is Coming | 2024

Beyond The Blocks
Coinmonks

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The vast majority, including Cryptocurrency investors, still doesn’t notice the biggest threat and chance for worldwide Bitcoin demand and adoption.

The United States Capitol Building — Joshua Sukoff Unsplash

Introduction

To fully understand the value of Bitcoin, you need to look at the global situation from different perspective than it’s being widely presented. Market is too focused on price action instead of fundamental and technological factors, which I concisely describe.

This article will help you navigate through what is invisible for most. Also strengthen your CBDC, Bitcoin, economic and social environments understanding.

I’ve tailored this article to be valuable guide for beginners as well as experts.

Let’s dive in.

The tip of the Iceberg

Cryptocurrency enthusiasts surely have (at least) an idea of what blockchain technology is. Bitcoin, as a first cryptocurrency built on this technology became an icon of decentralization and freedom. Distributed and open ledger enable fair market for all participants. It’s not forced to anybody, it’s accepted by willing parties.

There is also second side of blockchain, which can be devastating to human and system. What we’re being told about its consequences is just the tip of an iceberg.

What is underwater is much more important, cause what is invisible for majority is what makes the edge for investor and trader.

Tip of The Iceberg — Annie Spratt Unsplash

But to see that, you need to fully understand The Problem, so you can understand The Solution.

Not hesitating then.

The Environment

It’s May 2023. Inflation is all over the globe. Middle and Low Income classes already know, that official Inflation is definitely understated.

War on Ukraine starts to feel like beginning of much bigger conflict.

China and Russia are taking advantage of US bad economic condition.

Social unrest feels like it’s never going to end up.

But it will.

The question is: what will be the outcome of current events?

To answer this, I focus on problematic matter of economy.

The Problem

The most noticeable economic problems we face right now are:

  • Impossible to tame global inflation,
  • Very high banks failure risks,
  • Loss of trust to governments, so the fiat currencies.

Inefficient monetary policy led for couple decades is great example, that the system based on debt and intangible fiat currencies is ineffective and, in long term, doomed to failure. In accelerating global economy environment, system itself not only can’t satisfy market participants (global society), but in fact it slows down the payment streams, innovation and exposes everyone to risks associated with unsustainable system itself.

What it means?

It means, that system based on debt and intangibility is not an answer anymore. In fact it never was, what can be proven with hard data below.

Centralized financial system maintained for decades was and is against the market nature effecting in social and economic inequality. System has proven to be against middle and low income classes for decades.

Increasing Wealth Gap between Rich and Middle and Low income classes

Due to ongoing collapse of United States (and so global) financial system based on fiat currency, possible change of world order, we can be sure, that the system transition is coming sooner than expected. And this transition was being developed for years already.

The underwater part of the Iceberg

This is the clue to understand Bitcoin and decentralisation value. Take it seriously.

CBDC — Central Banking Digital Currency

Fully controlled digital currencies by Central Banks with use of Smart Contracts are complete opposition to what decentralized blockchain technology like Bitcoin offer.

CBDC is built on blockchain technology, but it’s complete opposition to Bitcoin and Cryptocurrency at whole.

Being silently researched and developed for years are now being in implementation phase. You can track the progress on website below.

CBDC — Central Banking Digital Currency tracker — https://www.atlanticcouncil.org/cbdctracker/

Over 110 countries are officially during one of the steps to switch to Central Banking Digital Currency.

What Is Central Banking Digital Currency?

CBDC is a form of digital money, different than one we use now. To present what CBDC is it’s best to use an example.

Bitcoin as example

Bitcoin is based on blockchain technology to be trustless, open to everyone, with no centralized emitter — bank. It can’t be controlled by 1 entity (until 1 person owns every Bitcoin). It uses hashing and cryptography to be secure in use. Digital currency, that is accepted by their users. It’s not forced to anyone. You can use explorer (it’s like “google” for transfers and accounts) and see every transfer or account (wallet) on Bitcoin mainnet. Bitcoin is a network with an open ledger. This is transparent to everyone. Also Bitcoin has fixed supply, so it means it can’t be inflated. Algorithm makes this impossible.

In math we trust.

This is what makes the biggest cryptocurrency in the world a valuable digital asset.

CBDC

Central Banking Digital Currency is the opposite of Bitcoin. It’s centralized, controlled by one entity — Central Bank. You won’t be able to see it on-chain, because It surely will be encrypted. This will allow Central Bank for full control over citizens CBDC money.

When can we expect CBDC?

Recent events clearly show, that Super Powers are already during this process.

Federal Reserve already stated, that it will be launching FEDNOW on July 2023.

EU Central Bank’s President introduced, that more information about Digital Euro will be presented in October 2023.

China’s pilot program is being pushed forward.

Central Banking Digital Currencies are about to replace fiat currencies. It’s not a thesis, but a fact.

Why does it matter?

Central Bank Digital Currency, as stated above, can be easily tracked, blocked, frozen or limited in various ways by Central Banks. There wouldn’t be need for commercial banks as intermediaries anymore to distribute currencies to the market. This makes perfect ground to implement Social Credit System worldwide.

Official Digital Euro CBDC test, which was conducted on ETH network is perfect example to initially show the potential of CBDC as an assault on human freedom.

Imagine waking up some day and all your CBDC funds were erased from your bank account. They were burned or withdrawn, because your Social Credit Score was below expected. This sounds like Orwell’s 1984, but CBDC architecture enables this kind of scenario.

Another disturbing concern is, that CBDC can be limited in time. Your salary could be terminated if not spent in specific time.

Talking with journalists, blockchain and economic professionals assures me, that there are also plans for limiting CBDC in variety of different ways as well.

Your CBDC salary could be limited to be spent on specific products and services. In this case it’s a matter of time until gathering wealth might become impossible. No gold, no silver, no Bitcoin. We would be blocked from acquiring valuable assets.

We are facing an assault on human freedom. And general public has no clue how big is this.

CBDC Summary

  • CBDC technology enables Central Banks to track, block, burn (erase), withdrawn (steal) or limit any transaction — this won’t enable financial privacy
  • Your CBDC salary, if not spend, will be burned after specific period of time
  • CBDC will be limited — you won’t be able to gather wealth
  • Power, that CBDC create for Central Banks will make them superior. This will allow for enslaving market participants, which would be followed by Social Credit System
  • Digital Euro already was tested with functions to withdraw or burn (erase) someone’s funds

In other words: You won’t own CBDC and you will have to use it.

It’s hard to find potential benefits in Central Banking Digital Currency. Making Digital Dollar a legal tender will slow down financial activity due to lack of possibilities to gather wealth. Financial services will be limited. This will significantly slow economic growth. Private sector and financial markets will be slowly dying.

Central Digital Banking Currency as a form of payment brings threat to the economic and social system.

I’m an advocate for crypto and digital payments systems due to their mathematical nature. Also easy way for cross-border payments is a feature, that is needed in our instant information environment. Blockchain as technology can highly improve economies worldwide.

CBDC is complete opposition to progress though. CBDC won’t improve broken stability of the financial system.

There is real possibility, that Federal Reserve System would collapse United States economy.

So the question is:

Should global society, based on history and data, let governments have such environment, that CBDC create?

In other words.

Can we trust governments, that they will use Central Banking Digital Currency for our good?

Answer comes by itself.

And that’s the greatest problem and threat we are facing now.

Is Bitcoin counter alternative?

When it becomes clear how CBDCs are capable of violating global citizens freedom, there also must be some counterparty for this.

Let’s summarize what characteristics are required for The Solution.

There’s a need for physical currency equivalence, which is impossible to trace and can’t be algorithmically limited.

In years to come, when traditional banknotes will be abandoned, we can suppose, that silver and gold could be still (at least partially) used as physical mean of payment.

Precious metals are not efficient though. We live in an age of instant, digital information, which is much more demanding.

In next articles, I will describe solutions to the current problem. Join Newsletter to stay informed.

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Beyond The Blocks
Coinmonks

Ahead of events. Global and macro futurism. Describing what is. Explaining what's coming. Bitcoin, DeFi, Cryptocurrency, Blockchain, Web3.