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13th May 2023 > > The fight against CBDCs.


The US is leading the good fight against CBDCs (Central Bank Digital Currencies).

Market Snap (at time of writing)

Market Wrap

A brief test of $26k to the downside overnight has been blamed on FUD around the US government selling off a stash of BTC acquired following the seizure of assets from the Silk Road.

As a quick recap, the US government owned approximately 50,000 BTC that it said it would in five tranches of about 10,000 BTC at a time. One tranche has already been sold.

Some readers will remember that Gordon Brown, during his tenure as Chancellor of the Exchequer, greedily eyed up the UK’s stash of gold as a source of funds for the massive expansion he planned in government spending. Brown not only announced in advance the sale of material amounts of gold, but he executed the trade on the open markets. This ensured a sell-off in advance, and a rally afterwards, thus transferring wealth from UK taxpayers to gold investors worldwide.

That’s one way of doing things.

The US government is more business savvy and not nearly as naïve as Brown.

The sale of each tranche will be conducted privately, either brokered through a trading desk, or via an auction. We will not know the selling price until much later though in general in a bear market it would be at a discount to the prevailing spot price, and in a bull market at a premium to the prevailing spot price. Note that the spot price is retail driven for small sizes and is no more than a rough indication of where 10,000 BTC would clear. The buyer of the stash will be doing so with a long-term investment horizon. There is no reason for a spot market reaction. Sell-offs due to fake news like this are always buying opportunities.

Curious Cryptos’ Commentary – The fight against CBDCs

A significant body blow has been taken by those who support CBDCs. Regular readers are not surprised to hear that this body blow originated in the US, which along with Switzerland, is leading the good fight against the coercion and control enabled by CBDCs.

Ron DeSantis, Governor of Florida and perhaps the world’s best hope of avoiding a second Trump presidency, has signed a bill restricting the use of CBDCs in Florida.

The bill specifically bans the use of any CBDC whether issued by the US government or a foreign government as money within Florida’s Uniform Commercial Code.

Ron explained his anathema towards CBDCs:

“Sometimes government will do things where they provide a kind of a benevolent rationale for what they’re doing but it’s really nothing more than a wolf in sheep’s clothing. Well I think with central bank digital currency, this is a wolf coming as a wolf. This is something that will be a massive transfer of power from individual consumers to a central authority. And that’s just fundamentally antithetical to a free society.”

We can all agree with that statement.

Ron is wrong on one specific point though, as he later accuses Joe Biden of being a supporter of CBDCs. There is no evidence to support this assertion. The Federal Reserve has stated it will not introduce a CBDC unless specifically required to do so by Congress, and there is no majority appetite within Congress to make such a demand. Political point scoring in the context of cryptos always gets my goat.

Ron has called on other states to follow suit. When enough have done so, and we can be sure that Florida is not alone in its abhorrence of CBDCs, at some point there will be enough critical mass that even a federally mandated CBDC could not gain enough traction to be a success.

Curious Cryptos’ Commentary – The fight against CBDCs part II!

A week ago the House of Representatives of North Carolina passed a bill that prohibits individuals from making payments to the state coffers using CBDCs, as well as barring the Federal Reserve from using the state as a testing ground for CBDCs. Though not yet passed into law, the bill seems certain to gain approval from North Carolina’s Senate and its Governor Roy Cooper.

Though this mooted restriction on CBDCs is not nearly as comprehensive as Florida’s I think the direction of travel is clear.

I believe that the politicians who are fighting against CBDCs are doing so honestly and on a point of principle of defending our liberties and our freedoms. The global policy of lockdown, draconian, illiberal, and illegal as it was, made me fear that we were all destined to live in totalitarian societies. Once governments start to believe they act with impunity, they tend to continue to do so.

Our bulwark against that is the process of regular elections, and individuals who take actions like Ron DeSantis has done, regardless of their political beliefs.

But there is another reason for this fight against CBDCs, and it is rooted entirely in self-interest.

Dollar hegemony is reinforced when the rest of the world is hell-bent in implementing CBDCs whilst the US is not. Without dollar hegemony that $31 TRILLION debt pile, which can never be paid back, becomes unsustainable. A US default on that debt pile (and I don’t mean a technical one that gives impetus to raising the debt limit) would be disastrous economically and socially for the US and the world.

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