26th August 2024 > > CBDCs.

tl;dr

Forget the privacy and coercion concerns, CBDCs are bad for your health.

Market Snap

Market Wrap

A slow start to the week it seems. BTC threatened $65k briefly overnight, but apathy won the day. We have had seven straight days of inflows to the spot BTC ETFs and only one out of the last ten trading days saw outflows. That institutional buying is ramping up.

Meme corner – CBDCs

The Canadian truckers know all about that.

Or perhaps this one featuring Convicted Criminal Christine Lagarde, head of the ECB, a very vocal supporter of CBDCs:

Curious Cryptos’ Commentary – CBDCs

CBDCs are a favoured tool of autocrats and despots worldwide, and potentially some other governments rather closer to home, though never in the US, Switzerland, or Slovenia.

The CCC’s concerns about the lack of privacy, and the untrammelled ability a CBDC hands to a government to enforce the most illiberal policies upon us have been well-telegraphed in the past. We will not go over that old ground again, suffice to say that none of the problems have diminished in any way at all. There is no mitigating action that can reduce the dangers inherent in CBDCs apart from not having one in the first place. Which is rather ironic, as supporters of CBDCs tend to say the same thing about cryptos. We know who is right.

But if you are not yet convinced, a recent paper makes for interesting reading:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4932810

Its primary conclusion should come as no surprise to anyone:

“I find no relationship between CBDC adoption and either GDP per capita growth or inflation.”

As a tool of financial repression, CBDCs will give no economic benefit to anyone.

The second conclusion is a little unexpected:

“I find somewhat negative effects on whether individuals are thriving and their financial well-being.”

In the round:

“Cumulatively, these results suggest that the economic benefits of CBDCs may be limited and there could be additional unintended consequences on individual well-being.”

…

It has been suggested in the past that the CCC has been a touch dramatic in its portrayal of CBDCs, for which I make no absolutely no apology. If you prefer a more sober assessment of the dangers of CBDCs, reading more of Christos Makridis’ work is a good place to start, such as:

https://cointelegraph.com/magazine/cbdcs-kryptonite-for-crypto/

Christos agrees with the CCC:

“A CBDC is an authoritarian government’s dream and represents a giant step backward for consumer privacy.”