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Central bank digital currencies (CBDCs) have been a divisive idea since their inception, and that continued to play out on Twitter this week.
Rep. Warren Davidson (R-OH) took to the social media platform to speak out against the Digital Dollar. Replying to a CBDC job ad by the Federal Reserve Bank of San Francisco, Davidson said CBDCs “corrupt money into a tool for coercion and control.” Making a reference to Star Wars, he also called them the “financial equivalent of the Death Star.”
The Federal Reserve is building the financial equivalent of the Death Star.
Central Bank Digital Currency (CBDC) corrupts money into a tool for coercion & control.
Congress must swiftly ban then criminalize any effort to design, build, develop, test or establish a #CBDC. pic.twitter.com/9JWiyj5H2f
— Warren Davidson 🇺🇸 (@WarrenDavidson) July 23, 2023
While some polls show the majority of Americans are opposed to CBDCs and show concerns about privacy, cyber-attacks, and the elimination of cash are troubling people, some replied to Davidson’s Tweets saying they support the concept of monetary programmability if these issues can be addressed.
Davidson did not budge, saying that programmability should never be a possibility when a currency is issued by a central authority. The Federal Reserve has repeatedly assured Americans that privacy would be preserved, but the representative for Ohio’s 8th congressional district isn’t buying it.
Fears about privacy and government control around CBDCs aren’t limited to the United States. The same concerns have been raised worldwide, leading the European Central Bank (ECB) to prohibit programmability, such as the ability to make digital euros spendable only on specific things at the base layer.
Yet, there is a solution to CBDC fears—the original electronic cash system pioneered by Satoshi Nakamoto over a decade ago.
Bitcoin (BSV) is the answer
While Bitcoin has been on a long and winding road with many twists and turns, the original idea of an electronic cash system that protects privacy while enabling traceability is still alive and well.
Unlike CBDCs, which central government authorities would issue and many people don’t trust, all 21 million bitcoins were issued by Satoshi Nakamoto when he first released his electronic cash system. These coins are pre-programed to be distributed to miners in exchange for work such as building blocks and propagating the network.
Satoshi’s original design (not to be confused with the broken fork BTC) strikes the right balance between legal compliance and user privacy. Capable of micro and nano payments, Bitcoin (BSV) leaves time-stamped records on the ledger, proving that transactions have occurred while not revealing any information about who transacted or for what.
As a scalable electronic cash system, BSV Blockchain is also programmable, but only by users who wish to set up transaction terms and application developers who wish to develop on the blockchain. This is starkly different from a programmable CBDC with conditions determined by a central bank. Bitcoin (BSV) allows parties to agree on conditions upon which coins will be released, such as dates, times, and work milestones met.
While CBDCs seem inevitable, and they will have their benefits and drawbacks when they fully roll out across the world, Bitcoin (BSV) remains a viable alternative; a true peer-to-peer electronic cash system protecting privacy.
However, for it to work as such, it must be used as cash rather than held, stored, and traded for fiat profits. It must also scale unboundedly and have tiny fees so as to make splitting payments into smaller lots and storing coins in many different wallets feasible. Only BSV blockchain meets the standards required.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: Blockchain provides perfect foundation for CBDC
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.