The Bitcoin Policy Institute (BPI) has released a report detailing why the United States should not create a central bank digital currency (CBDC) and should instead promote freedom and privacy, according to a statement sent to Bitcoin Magazine.
BPI begins by exploring the strong possibility that the 21st century will be known as “The Chinese Century”, referring to China’s authoritarian use of CBDC and other military, economic and cultural hegemony.
So, as more nations have begun to develop and launch their own versions of CBDCs, it’s becoming increasingly clear that governments are competing not only to maintain their authority over legacy finance, but to seek an entirely new level of power. .
“People today can only transact at the pleasure of the state through banks that deploy police power as quasi-state institutions,” the report said.
BPI is therefore calling on the US government and central banking regime to pursue a new path forward; a path that enhances privacy and enhances freedom.
“As the world follows China’s path in the 21st century, the United States should stand for something different: it should stand for freedom,” the statement said. “For this reason, the United States should reject central bank digital currencies.”
However, if the United States were to reject the idea of CBDCs, something has to solve the problem of the need for digital currencies, specifically, digital fiat that allows for low-fee, virtually instantaneous cross-border transactions.
“The highly guarded and controlled world of digital money suggests that a meaningful alternative must be private, uncensorable and free,” the report said.
“These are the characteristics of bitcoin: a global cryptocurrency issued by a protocol rather than a bank,” the report continued.
Fortunately, Bitcoin offers all these necessary benefits: instant, low-cost or free transactions, domestic and cross-border transactions, final settlement, no built-in transaction monitoring or control, and no central entity capable of controlling Bitcoin’s monetary policy.
In addition, BPI noted that Bitcoin will likely work in conjunction with privately issued stablecoins from banking institutions, although it is not clear that this is necessary. However, this idea helps to close a temporary gap regarding the digital fiat access problem.
“To solve this problem [access to digital fiat]private banks around the world can issue crypto stablecoins pegged to fiat currencies and backed 1:1 with hard collateral.”
The report concludes with a rallying call for America to take the harder road, the road that strengthens privacy and guarantees freedom without centralizing power in a system that likely breeds future abuse.
“We live in a world characterized by the systematic erosion of individual privacy, leading inexorably to the extinction of freedom,” according to the report.