Discussion about this post

User's avatar
BowTiedSwan's avatar

Great article Scholar!

A potential scenario of the future "co-existence" between CBDCs and crypto (BTC for the example, given regulatory uncertainty):

- Most nations, even those that are crypto-friendly, implement a CBDC as it becomes the only way to buy and hold foreign reserves (no idea how you'd move the entire FX market into adoption but less imagine it happens) -> you want to hold in your reserves tokens from the most productive/stable nations, to buy you need to use a CBDC as well.

- Most western nations ban any on/off ramps platform to get crypto from a CBDC (we're going in that direction). Perhaps they allow only BTC/ETH to allow for taxation + tracking of anyone offloading their wealth into their nation token.

- Small crypto-friendly and African+Asian nations allow for a wider use of on/off ramp mechanisms as they see the benefit.

- Hence North Americans and Europeans choose to have a % of their wealth allocated in Asian CBDCs, as it allows them to bank and access the crypto market.

- The consequence? US, CA and EU CBDCs become devalued in the FX markets. Two courses of action are considered:

1. Banning EU, US citizens+businesses from holding any Asian CBDC, which leads to a currency war as Asian nations retaliate, further accelerating the demise of the US/EU axis.

2. Allowing again the on/off ramps to crypto, attracting more capital and industry.

One way or another, Banks go to Zero, Orange Coin wins.

Expand full comment
ShadowJedi's avatar

I never thought of it as Crypto vs CBDC, its been more like CBDC are the flip side of CRYPTO. I've always believed CRYPTO was introduced to the masses as a way to to lead to the adoption of CBDCs.

Expand full comment
26 more comments...

No posts