Topic: Impact of a US Digital Dollar on Crypto? - page 2. (Read 310 times)

About the digital dollar. We see dollar as a highly influential currency that almost all country require in intertional transaction and the US has control over it. Now that the digital version is going to go in the air, will that amount of control go under it? For example with the Ukraine and Russia war that dollar is in scarce quantity in the soil of Russia, can the digital version also be controlled to be limited in a particular area/country just as in the situation of war or invasion as the precent situation?

It probably won't be as dramatic as anyone thinks. It's already a digital affair. Physical printing of paper money is a very small part of money creation in the US, most of it is done by someone going into a computer and changing a number.

The majority of people are still inclined to use Fiat currencies in which the government issues it, and that is the current setup, and right now and they are just trying to digitize it.

I’m looking at it in different ways; one is that they will make it easier to print more cash. I hope that it will be transparent in how much there is, and probably the Blockchain can do something with it.

The other thing that I see is that they are too late in the digitization in which that bitcoin has already filled the role of that as the digital currency or something.

Better be careful and hedge.

I disagree.  Even with oppression, Bitcoin and some of the Altcoins will still find their way into the world.  Digital USD is fun until it is not.  It is fun until they start seizing your rights and until you find out they can cut off your finance by just flipping a switch on their side.

To me, Cryptocurrencies are not going anywhere even with CBDC's up and running.  Sure, some will leave our community but if they leave Bitcoin for Digital USD, then I am actually happy about it because they were not here for the technology and what features Bitcoin brings anyway.  Whoever chooses dirty digital USD over Bitcoin is definitely not here for decentralization or freedom of finance.

They can try, and they probably will try to make Bitcoin obsolete but they will not be able to do so.  I have even seen them promise CBDC's are going to combine digital finance with privacy which is just deceiving.  Nobody can tell me a government is happily releasing a version of fiat that has privacy built in with no backdoors for it.  And if there are backdoors, there is no privacy.

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Regards,
PrivacyG

Any financial instruments that are built by the government are bound to get more support in future with integration into things like the tax system. Ultimately we have to accept that Bitcoin was simply a very successful test model, it might hold it's novelty for a long time especially with so many richer people invested in it now but for practicality it's highly likely other cryptocurrencies will end up taking up the role of digital cash. You might argue that having government backing, with all the funding the goes into creating physical cash right now, would give better stability and less outside interference - as long as people were confident that the system could not be inflated without solid justification.

CBDC is no different from fiat money, all provided and controlled by the government, it will even be more strictly regulated than the current way of circulating fiat.
We love cryptocurrencies not because they are convenient but because of their decentralization. I don't think people will give up crypto because of CBDC.
Crypto have opened up a convenient digital world, certainly countries are working to come up with their own CBDCs for each country.
Until they come up with regulations to crackdown on crypto to force people to accept CBDC, but it is not possible to completely ban cryptocurrencies.

In my perspective, it will be good. Anyone who thinks that it will not be good, did not really understood the assignment at all.

If you do not need BUSD, USDT, USDC and GUSD, but you can use whatever government calls their digital currency, DUSD? Then you know that it is not binance, it is not Winklevii twins or some bitfinex hackoff tether company in Bahamas.

It is the USA government that guarantees you that this money has dollar value. That would be awesome for crypto and for trading, ALL of the pairings will become that, we won't have all those USDT and so forth pairings anymore, we will have this new one and I believe it will certainly be great than what we have currently having (not sure how many of you are making use of stablecoins with cautions but I always do have a secondary thought like it may end up similar to Liberty Reserve).

I think they will have their own respective uses in the financial system.

I could see a digital dollar being what we use in stores for everyday transactions, while bitcoin being a strong reserve asset/SOV.

I would love to see the LN take the load of everyday transactions, but in all honesty, the government use various legal means to ensure their currency is what is used in stores.

Even if  the entire countries have their own CBDC it can't pose a threat against Bitcoin. We have had many countries adopt Bitcoin lately and the highest that can be done in regards to Bitcoin if CBDC takes over the world is that Bitcoin will be a store of value other than a legal tender.

CBDC is only a digital version of the normal fiat and it will still retain the intial value the paper currency have

If they peg it to the dollar then inflation is still an issue because the money supply is not finite. They can create currency out of thin air, it just becomes digitalized under a CBDC system. If they chose to peg it to something like gold then it might help with inflation. There is no indication the countries floating the idea of a CBDC have aims of doing that though (granted, we're very early).

IMO the goal of a CBDC is to eliminate paper money in an age where everything is digital, and while the government is at it they can use it as a mechanism to control the money supply easier than paper-based currency. They would present CBDC's as a crypto competitor when it is nothing remotely similar.

For all those who will not understand the difference between CBDC and Bitcoin until then, it will not be too important anyway, because the only difference between paper and digital fiat is that the government will be able to control us much better than now. Those who value privacy will certainly gravitate even more towards Bitcoin, but I do not mean only those good people, but also criminals who prefer banknotes above all.


It's always a possibility, but the authorities still have very powerful instruments today to do great damage to Bitcoin, only if they want to - all they need to do is follow China's example. In addition, the CBDC will be introduced gradually, so we know from the example of the EU that it has been proposed that each adult resident will be able to have a maximum of 300 digital EUR one day when it becomes available.

As far as I'm aware CBDC is mainly a fancy experiment but not a serious project. At least central banks that  created ones did not demonstrate any significant results.

Hydrogen explained it pretty clearly. In addition I can say that in the best case we will get CBDC that works just like tether but without any scandals and with reputable issuer.  And first, it doesn't seems like central banks are actually willing to make tether-like CBDC. They still want to remain control over it. Second, do we actually need CBDC? What issues would be resolved by using CBDC? It might be that no one just needs it.

I'm not expecting a US CBDC to offer advantages over crypto. They won't offer lower transaction fees, or a private key based system allowing sole ownership and control over funds to end users. They will not adopt a hard deflationary model, which could qualify their CBDC as an inflation protected asset. They won't implement a gold standard whereby their CBDC can be exchanged for precious metals. There won't be high interest earned by staking CBDCs as there is with crypto.

The approach regulators and the state makes to CBDC rules out every avenue which could allow them to be competitive in global markets. In an era where social credit and state surveillance are concerns, CBDC could be viewed as extensions of these programs, which I think most would prefer to avoid.

CBDC will have a difficult time to overcome the many obstacles and skepticism most will have towards it.

If it is pegged to the dollar, CBDC might be used as a stablecoin in countries like venezuela, turkey and argentina which could help residents to avoid inflation. That might be one area it could have real world application. Although given the preference for regional lockouts where video games made in japan can't be played in the USA, as an industry standard, it is possible that may not be an option outside of forex which already exists.

There's been a lot of talks about the Federal Reserve's plans to develop a Digital Dollar in order to phase out paper money for good. The US is aware that China has launched a CBDC of its own, leading it to act fast in order to maintain its grasp on the global economy. I wonder what would the impact of a Digital Dollar be on crypto itself? Knowing that people prefer convenience on top of security/reliability/decentralization, it's likely the majority will "ditch" crypto in favor of a government-backed digital currency.

By the time all countries have their own digital currencies, it's likely governments will become more oppressive against crypto/Blockchain tech. We're still a few years away from seeing a Digital Dollar in circulation, so there should be nothing to worry about at least in the time being.

Thoughts?