CBDCs - The War Amongst Nations

CBDC.jpeg
Source

Maybe no one is actually paying attention, but if most nations of the world result into creating central bank digital currencies, there will literally be a trade war! When a fully functional digital currency is integrated and possibly listed on foreign exchange markets, what should one really expect to happen? Sometimes I just don't know what to call it, but what will it take these authorities and it's supporters to realize that "money" has already been made digital with its traditional banking systems? The idea of creating a crypto copycat is the dumbest thing ever, considering what risks it poses to its Fiat market value. Imagine a global market where investors are divided to trade pure USD or its Nation CBDC? Chaos!

That's just the USD market losing volume against its trading pairs. I imagine that to happen on one hand and on the other, the introduction of CBDCs would be a run for world power all over again. Certain countries will increase tariffs, therefore making it difficult for competing nations to see their products sell. Let's take the crypto space for example, it is actually clear what the maximalist are making the industry look like, with a system that doesn't understand that the value of the network is based on a collective effort, I mean the general market cap is what it is because the industry is as large as it is with diverse projects building their solutions.

But when it comes to countries and their authoritative nature, there's always a competition between them, without realizing the world has a big whole economy that requires collective efforts from all nations to grow. The Centralized system runs its monetary sectors in this manner, it's me, me, me, everyone just wants to be the center of attraction, the reserve currency, the most powerful, but truth be told, it will all be chaos with this countries trying to build the stronger CBDC in the trade system.


Source

CBDCs are authoritative tools that would disrupt a lot of jobs. With most commercial institutions eliminated in the process of their creation, jobs will be lost, and unlike crypto that despite its nature of building a population with less offline involvements, it creates new opportunities in the online world to regenerate income, just how automation would put people away for the actual field of work, but in the beat sit to oversee all activities.

The House of Lords Economic Affairs Committee — an investigative governing body representing the economic interests of the United Kingdom — has released an official report assessing the pertinence of a government-issued central bank digital currency (CDBC).
Titled “Central bank digital currencies: a solution in search of a problem?,” the 52-page publication covers a litany of areas in relation to domestic CBDC endeavours, and regularly cites the preliminary research taskforce established by Bank of England and HM Treasury in April 2020.
Over 50 individuals, including financial experts, university professors from elite institutions, managing directors of large corporations, as well as entire organizations consulted on the feasibility and nuances of a digital asset in written and oral formats at panel discussions, hearings and online submissions in the months prior to its release.

It isn't really a solution in the first place, it's just a centralized copy of the actual solutions. CBDCs will have no competitive utility compared to cryptocurrency that are ever expanding in their economy. This all would be a run for privacy invasion, high funds centralization, and a whole new war will arise when nations of the world try to make competing countries fall weak by attacking their economy through trade restrictions.

The foreign exchange markets will literally be a mess with these Fiat backed currencies running in the system…

The overwhelming conclusion of the report determined that there is no immediate need for the U.K. to strive for first-mover advantage in the CBDC space, arguing that a number of questions and challenges are still prominent, including geopolitical influences, Meta's vast user network, China's innovation and cyber security in what could become a "vulnerable single point of failure", among others.
In addition, it was stated that improper planning and careless safety precautions could have “far-reaching consequences” and “pose significant risks” depending on the asset's infrastructural design and intention of usage in the public domain.

“While a CBDC may provide some advantages on speed of settlement and cheaper and faster cross-border payments, it would present significant challenges for financial stability and the protection of privacy.”
Speaking on China, the committee noted that progressions to compete with the traditional economic infrastructure could "erode the US dollar’s sanctions leverage, helping countries seeking to evade economic sanctions to bypass US dollar-dominated systems such as SWIFT”.

It also raised concerns that this could have wider consequences in the European markets, specifically in terms of the strength and adoption of the British sterling and euro.

Let's break this down. Unlike crypto with its awesome design to represent assets from other chains on a new chain in their wrapped form, the liquidity allows for prices to stay relatively close, volumes not overwhelming the peg, but this may not be the case with CBDCs peg to Fiat, for starters, these authorities will want to have it on all the places in the world, that's speaking of fintech tools. With this in place, they would be an extremely spread supply, existing almost everywhere.

But will others just sit down and watch one country CBDC dominate the trade markets? It won't function as Fiat where certain shits need to be done to convert to other foreign countries, this is a digital currency and will just need a compatible wallet to get it pushed to other countries without any dumb convertion processes. With this in place, countries will be hungry to ban dominantive CBDCs, because the adoption will definitely not be equal, this is where tariffs will become a point and kill action. A lot of economies will suffer as nations compete for world power.

There's quite a lot of speculation, but judging from how they can't even come to an agreement, it already points to the chaos to expect. CBDCs won't directly pose a threat to crypto, rather, it will just compete with its likeness…

Posted Using LeoFinance Beta



0
0
0.000
7 comments
avatar

Sorry I'll upvote you on LEO but this has nothing to do with gaming.

0
0
0.000
avatar

Noted!

That must have slipped in by mistake, can't really help it when "tag suggestions" is a thing, so I just tap, tap, away :)

0
0
0.000
avatar

It's tempting to use them all, I constantly have to hold back!

POB is a free for all, I use that all the time!

0
0
0.000