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Source: Сointеlеgrаph

The American think tank Bitcoin Policy Institute is urging the United States to move away from central bank digital currencies (CBDC) and consider bitcoin (BTC) and stablecoins as alternatives.

In a white paper released Sept. 27, the authors, including Texas Bitcoin Foundation CEO Natalie Smolensky Ph.D. and former Kraken development head Dan Held, allege that CBDCs will strip the public of financial control, privacy, and freedom.

Smolensky and Held argued that CBDCs would, in effect, “give governments direct access to every transaction.” […] conducted by anyone anywhere in the world,” adding that it could then become available for “global reading” as government infrastructure is “the target of constant and increasing cyberattacks.”

The pair also argued that CBDCs would allow governments to “prohibit, require, discourage, incentivize or cancel transactions, making them instruments of financial censorship and control.”

“As a direct responsibility of central banks, CBDCs are becoming the new vanguard for imposing monetary policy directly on consumers: such policies include negative interest rates, savings penalties, tax increases and currency confiscations, among others.”

Smolensky and Held suggest that this greater focus on surveillance will mimic “the Chinese government’s surveillance effort” to ensure government transparency of all financial transactions that have not yet been observed in the digital banking system.

“As the world follows the path of China in the 21st century, the United States must stand for something else,” they argued.

The authors say that many of the features provided by the CBDC can already be solved with a combination of bitcoin, private stablecoins, and even the US dollar, noting:

“For most people, the combination of cash, bitcoin, digital dollars, and well-backed stablecoins will cover just about every use case for money.”

Smolensky argued that Bitcoin and private stablecoins would enable instant and low-cost digital transactions both domestically and internationally, while digital dollars and stablecoins would still be subject to anti-money laundering and know-your-customer compliance.” platforms that facilitate transactions with them”, adding:

“Creating a CBDC just isn’t necessary.”

The white paper also claims that governments are often ignorant of new technologies, pointing to an incident earlier this year when the Eastern Caribbean Central Bank’s CBDC, DCash, went offline.

“Basically, when governments lead the implementation of CBDC, there will be serious stability and reliability issues,” they wrote.

CBDCs are already on the road to development in some countries such as China, but earlier this month President Joe Biden signaled that the US was considering following suit after instructing the Office of Science and Technology Policy (OSTP) to submit a report with analysis of 18 CBDCs. systems.

Previous discussions of CBDCs in the US have been marked by controversy and confusion, which is one of the authors’ key concerns with CBDCs – a lack of experience from governments, as well as potential breaches of privacy and control.

To combat what they see as problems with CBDCs, Smolensky and Held are offering cryptographic stablecoins pegged to fiat currencies and backed by 1:1 hard collateral that can be issued by private banks around the world.

Related: Now or Never – The US Should Prepare for a Digital Currency

“This would provide all of the intended end-user benefits of CBDCs, minus the levels of oversight and control that CBDCs offer to the government,” they said.

“The United States must stand for something else: it must stand for freedom. For this reason, the United States should move away from central bank digital currencies.”

The Bitcoin Policy Institute describes itself as an impartial, non-profit organization that studies the political and social implications of Bitcoin and the new money networks.

Source: Сointеlеgrаph

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