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CBDCs could be Bitcoin's Trojan Horse

Bitcoin advocates worldwide compared the cryptocurrency to CBDCs in the LaBitConf Meeting.

CBDC
CBDCs could be bitcoin's Trojan horse. (Pic by Jernej Furman @ Flickr)

In Short

  • Max Keiser asserted that bitcoin can "decapitalize" rather than "decapitate."

  • For Gabriel Kurman, "it's good that governments feel a part" through CBDCs.


In a hypothetical "war" between fiat money, digital currencies, and cryptocurrencies, bitcoin (BTC) would be the winner. So concluded Max Keiser, Gabriel Kurman, and Carlos Maslatón during a panel at LaBitConf. While they all agreed on most debate topics, they showed different views about Central Bank Digital Currencies (CBDCs).


Journalist Aaron Von Wirdum (editor of Bitcoin Magazine) moderated the talk, titled "The War Between Central Bank Digital Currencies, the Dollar and the Role of Bitcoin." The panel featured two metaphors that almost perfectly summarized the speakers' views.


The first metaphor, by Gabriel Kurman, co-founder of Smart Contract developer RSK Labs, is "CBDCs could be bitcoin's Trojan horse." On this, he explained that he sees it that way "because it's good that governments feel they can be part of this."


In this sense, Kurman stated, "I wonder if CBDCs will be functional to the revolution we are trying to bring forward, but I have a lot of unanswered questions." Beyond these uncertainties, he made it clear that "if people don't trust a government, they won't trust their CBDC either."


On the other hand, the other outstanding quote of the evening came from Max Keiser. In the framework of a fictitious economic war context between central bank money and the cryptocurrency designed by Satoshi Nakamoto, Keiser assured that bitcoin "would be the guillotine." However, he clarified, instead of "decapitating" 40,000 people, this guillotine "is going to decapitalize them."


Referring to the traditional financial system, he said:

They love to print their fiat money, and the only way they are going to fight us is to print more and more. They're going to bankrupt themselves.

Beyond the imaginary scenario posed, Keiser considered that "in the United States, this war is already happening" and that the bitcoiner ecosystem has "people inside the government," such as Senators Cynthia Lummis and Ted Cruz. Both lawmakers have defended bitcoin against government onslaughts.


If there were two sides, CBDC and bitcoin, Keiser stated that "the CBDC side won't have a majority, because the people in the bureaucracy will leave and join the bitcoiners."



CBDCs, an extension of fiat money

Although with different interpretations on some minor issues, all three exponents agreed that CBDCs are not similar to bitcoin in nature. CBDCs have no potential for Keiser and "are just a recreation of fiat money, but worse." He asserted that "they are centralized and give the state the full power of perverse and global surveillance" to substantiate this theory.


Argentine analyst Carlos Maslatón expressed himself along the same lines, saying that "if we analyze their essence, CBDCs are an extension of the current system. There is no difference, and I don't know why there are many talks about this idea". Precisely, he pointed out, the essential value of bitcoin is its limited issuance of 21 million coins.


Just like the American, Maslatón said that central bank digital currencies represent a "risk to freedom. What they want is to monitor 100% of our movements," he said. However, he did not doubt that "bitcoin will win the battle and guarantee us to be free citizens of the world."


Kurman, meanwhile, was a bit more optimistic, stating that "if the government is trustworthy, CBDC could work." The example he cited was, precisely, that of El Salvador. In his view, the Chivo dollar (the one that Salvadorans store in their Chivo wallet and exchange for bitcoin) is somewhat similar since "the Central Bank does create Chivo dollars, but the government controls it."


Despite what was expressed by the developer, the state bought the dollars that back the bills inside Chivo wallets. These funds have even passed audits when explaining the implementation of the Bitcoin Law in El Salvador.


By allowing other self-custody wallets beyond the State one (Chivo), the entrepreneur said the Salvadoran government helped people from the very design of the law. If we replicate this, "having a programmable digital currency, cheaper and easier to use" could be positive. Of course, he clarified that it is necessary to monitor the issuance, which is unknown so far concerning the Chivo dollar, according to him.


In response to this view, Max Keiser was blunt: "If governments cared about the people, they would stop devaluing the currency." Therefore, he ratified that "there is no reason to give the State the benefit of the doubt."

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