In his latest blog post, "Pure Evil," Arthur Hayes, former CEO of crypto derivatives platform BitMEX, argued that banks could limit the impact of CBDC's "horror story."
Hayes: Bitcoiners and Banks Oppose CBDC "Dystopia"
CBDCs are currently in various stages of development around the world.
Fans of financial sovereignty naturally fear and even despise them, as they suggest total government control of everyone's money and purchasing power — "a full-frontal assault on our ability to have sovereignty over fair transactions among ourselves," says Hayes.
However, it is not only Bitcoiners who are among the opponents of CBDC. The cause is likely to be shared by the commercial banks that sought to overthrow the government using BTC. “I believe the apathy of the majority will allow governments to easily take away our physical cash and replace it with CBDCs, ushering in a utopia (or dystopia) of financial surveillance,” the blog post explains.
"But we have an unlikely ally that I believe will impede the government's ability to implement the most effective CBDC architecture to control the general population – and that ally is domestic commercial banks."
In implementing a CBDC, the government could make the central bank the only "node" in the digital network or use commercial banks as nodes in a less radical overhaul of the financial system. Hayes calls these systems the direct model and the wholesale model.
"Given that every country that has at least reached the stage of 'choosing a CBDC model' has opted for a wholesale model, it is clear that no central bank wants to bankrupt its domestic commercial banks," he reasons.
As such, in order to "pacify" banks to some extent, but still achieve benefits such as eradicating cash, governments could ultimately be controlled by the types of entities known for restricting crypto exchange transactions and banning hodler accounts.
"For politicians who care more about power than profit, this is their chance to completely destroy the influence of the Too Big to Fail banks - and yet they seem politically incapable of doing so," adds Hayes.
"Capital controls are coming"
The topic of CBDCs is getting a lot of attention, even outside of the crypto industry, as they represent a major shift in money and politics.
In an interview with Cointelegraph last week, Richard Werner — a development economist and professor at De Montfort University — described them as a "declaration of war." “In other words, the bank regulator is suddenly saying that we will now compete with the banks because the banks have no chance.
You can't compete against the regulator,” he said. Hayes, meanwhile, labeled Bitcoin as a safe haven still available for those already opposed to any form of cashless economy — but not for long. Buying BTC will become increasingly difficult, or perhaps completely impossible, once CBDCs are implemented.
“This window will not last forever. Capital controls are coming, and when all money is digital and certain transactions are not allowed, the ability to buy Bitcoin will quickly disappear,” he warned. "If any of this doom porn resonates with you, and you don't own at least a very small percentage of your liquid net worth in Bitcoin, the best day to buy Bitcoin was yesterday."
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