Bitcoin (BTC) holders trying to avoid central bank digital currencies (CBDCs) may have gained a surprise ally: banks.
In his latest blog post, “Pure Evil,” Arthur Hayes, former CEO of the crypto derivatives platform BitMEX, said banks could limit the impact of the CBDC “horror story”.
Hayes: Bitcoin and banks oppose the CBDC “dystopia”
CBDCs are currently in various stages of development around the world.
Fans of financial sovereignty naturally fear and even despise them, as they imply total government control over everyone’s money and purchasing power – “a frontal assault on our ability to have sovereignty over honest transactions between us”, says Hayes.
However, among the opponents of CBDCs there are not only Bitcoiners. Commercial banks that have tried to squeeze out of power with BTC are likely to share the cause.
“I believe the apathy of the majority will allow governments to easily steal our physical money and replace it with CBDC, ushering in a utopia (or dystopia) of financial surveillance,” the blog post explains.
“But we have an unlikely ally that I believe will hinder the government’s ability to implement the most effective CBDC architecture to control the general population, and that ally is the national commercial banks.”
In implementing a CBDC, a government could make the central bank the only “node” in the digital network, or use commercial banks as nodes in a less radical overhaul of the financial system. These systems Hayes calls the direct model and the wholesale model respectively.
“Given that every country that has at least reached the stage of ‘choosing a CBDC model’ has opted for the wholesale model, it is clear that no central bank wants to bankrupt their domestic commercial banks,” he explains.
As such, in order to “placate” banks to some extent but still gain benefits such as cash eradication, governments could be kept in check by the type of entity known to restrict cryptocurrency trading transactions and ban hodler accounts. .
“For politicians who care more about power than profits, this is their chance to completely destroy the influence of Too Big to Fail banks, yet they seem to remain politically unable to do so,” adds Hayes.
“Capital controls are coming”
The topic of CBDCs receives wide attention, even beyond the cryptocurrency industry, as they represent a major shift in both money and politics.
Related: CBDCs Are No Threat to Cryptocurrencies – Binance CEO
In an interview with Cointelegraph last week, Richard Werner – a development economist and professor at De Montfort University – described them as a “declaration of war”.
“In other words, the bank regulator is suddenly saying that we will now compete with the banks because the banks have no chance. You can’t compete against the regulator, ”she said.
Hayes meanwhile pointed to Bitcoin as a safe haven still available for those already opposed to any form of zero-cash economy, but not for long.
Buying BTC will become increasingly difficult, or perhaps even impossible, once CBDCs are implemented.
“This window won’t last forever. Capital controls are coming and when all money is digital and some transactions are not allowed, the ability to buy Bitcoin will quickly vanish, “she warned.
“If any of this doom porn resonates with you and you don’t own at least a very small% of your liquid equity in Bitcoin, the best day to buy Bitcoin was yesterday.”
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