Could Banks Be An Unlikely Ally For Crypto Against CBDCs?
The rollout of central bank digital currencies across the world is all but assured. Is there a place for banks, and could they become an unlikely ally for crypto?
In a blog post on the BitMEX cryptocurrency exchange site, where Hayes was the former founder and CEO, the newest post featured the title “Pure evil”, and voiced Hayes’ concerns over the impending imposition of central bank digital currencies (CBDCs) as the new currency issued by governments and central banks across the world.
Hayes believes that there is little chance that CBDCs will be stopped from being imposed by governments, given the general “apathy” shown by the majority, who have no problem with “decid[ing] to voluntarily upload [their] lives onto social media platforms like Instagram and TikTok.”
CBDCs To Halt Inflation?
The crypto exchange founder said government thinking was that inflation could be tackled if they imposed CBDCs.
“I expect that the CBDC will enable the government to tackle this new kind of inflation with vigour, but to the great detriment of the people. Let us pray.”
For Hayes, the type of inflation that the world is facing is really scary because it is affecting food and fuel the most.
“We’re staring down a much scarier type of inflation today: food & fuel inflation. It’s the kind that brings everyone except the richest out into the streets – and it is gradually tightening its already iron grip on all the world’s developed and developing countries.”
According to Hayes, the government will have unlimited powers to eradicate any movement that tries to protest against it by removing individuals’ access to money.
“The police inherit a new tool, the CBDC. Instead of carrying out overt acts against the protestors to stop the upcoming march on the capital, the police decide to ask Facebook, Twitter, Weibo and other platforms to hand over all data on anyone their algorithms believe were involved in the movement or sympathetic to it. On the days leading up the march, these individuals are completely frozen out of the financial system.”
“The protestors and those who support them are thus unable to fill their cars up with gas, unable to purchase a bus, train, or plane ticket, unable to dine at a restaurant, unable to purchase food and water at the grocery store, and ultimately unable to organise effectively”
Will Banks Be Sidelined?
Even though the reckless lending behaviour of the banks has caused many problems for governments, the same governments have always felt compelled to step in and help, given the banks’ importance to the financial system.
However, with the rollout of CBDCs there are certain options as to which variety a government might choose.
With the Direct CBDC there would just be a direct line between each citizen and the central bank, therefore doing away with the need for any intermediary banks. For Hayes, this is the “pure evil” option.
However, according to Hayes, the “Wholesale” model is the one that is being adopted by governments so far, and it is the most likely one given that banks would still act as gatekeepers to the financial system and governments may lack the political will to take on the banks and take them out of the picture.
Bitcoin As A Way Out
Hayes is generally pessimistic on CBDCs, saying that he believes a Wholesale CBDC will be implemented by all major economies in order to attempt to combat inflation.
He is also pessimistic on the populations’ willingness to do anything about such an imposition, saying “genpop is too busy liking the latest dance video on TikTok to wonder first why their physical cash disappeared.”
In spite of all this, he does say that he’s optimistic because he is able to buy bitcoin, which he calls the “supreme antidote”. However, he says that the window in which the population can still buy bitcoin is fast disappearing, and that “the best day to have bought bitcoin is yesterday.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.