Why Central Banks Cant Rush Out CBDCs
Trust is a vital component to money and finance. When we look at things with cryptocurrency we can see how this applies. However, the industry is so small it is off the radar to most.
In this video I discuss how central banks cannot afford to approach this too quickly and have things go wrong. We saw different projects either get hacked or not rollout as expected. A central bank simply cannot risk this.
▶️ 3Speak
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I think they want the #plebs to use their Central Bank wallet for their coin-based transactions below a certain amount and thereby erase those small 2.49€ small Mcdonald's Coffee transactions from the banking system as a first step.
The US will not take part, the Sheep will vote it in and the banking system outside of the US will become even more of a joke.
It’s definitely an important element. If they lose the trust then it will completely fail (not like it’s going to be successful at this point) and then it will splinter off into dozens of things they have no control over.
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It's similar to how things are for games as well. If a game comes out terribly at launch, then it will always smear the reputation of the game and the publisher. Even if you're like No Man Sky and improve the game by leaps and bounds, there will always be people who never look back at that game anymore.
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Summary:
The video discusses the challenges and risks associated with Central Bank Digital Currencies (CBDCs) and the importance of trust in the financial system. The speaker highlights the failures in the rollout of digital currencies, mentioning the example of El Salvador adopting Bitcoin as legal tender. The emphasis is on the need for CBDCs to ensure a seamless operation to maintain trust and confidence. The comparison is made between the trust in established currencies like the US dollar and the potential trust issues with CBDCs. The video also touches on the role of private money historically and the need for stable coins to address currency supply deficits.
Detailed Article:
The speaker in the video addresses the topic of CBDCs, specifically focusing on the technological and operational challenges they face. He starts by emphasizing the current lack of readiness in terms of technology, with many CBDC projects still in the design and testing phase, noting the failure of the Naira rollout as an example of the complexities involved. Drawing a parallel to El Salvador's adoption of Bitcoin as legal tender, he points out the challenges faced in getting people to adopt new technologies and change their behaviors.
Furthermore, the speaker stresses the essential role of trust and confidence in the financial system, highlighting the example of why the US dollar is more preferred than other currencies like the boulevard in Venezuela due to the trust people have in it. He underscores the necessity for CBDCs to ensure a seamless operation to avoid eroding trust and confidence in the system, as any major issues like hacks or technical failures could have significant repercussions on businesses and individuals alike.
The discussion extends to the historical aspect of private money dominating the monetary landscape and how people have always found ways to transact around system failures, citing the example of cigarettes as a currency in prisons. Moreover, the speaker expresses his belief in stable coins as a solution to address currency supply deficits, highlighting the potential of cryptocurrencies to stimulate economic growth in contrast to CBDCs' challenges.
In conclusion, he emphasizes the importance of learning from mistakes and continuously improving systems, using examples from projects like Hive and UST to illustrate the need for adaptability and proactive measures to ensure a robust financial ecosystem. Overall, the key takeaway from the video is the criticality of trust in financial systems, the challenges facing CBDCs in maintaining that trust, and the potential for cryptocurrencies to address existing financial shortcomings.
Notice: This is an AI-generated summary based on a transcript of the video. The summarization of the videos in this channel was requested/approved by the channel owner.