Bitcoin (BTC) and CBDC on the agenda of the EU and the World Economic Forum

Bitcoin (BTC) and CBDC on the agenda of the EU and the World Economic Forum

The President of the ECB once again paid for bitcoin (BTC) while promoting the worst currency ever: the CBDC. From the World Economic Forum to the European Commission, everyone is talking about it.

“Bitcoin is not based on anything, unlike the digital euro”…

Last year, the European Commission launched a popular consultation on the digital euro. The result was very clear: the payments must remain private.

The consultation ended with a higher participation rate (47% for Germans, 15% for Italians and 11% for French) and a clear mandate in favor of maximum protection of privacy.

Problem: it is clearly impossible to make anonymous digital payments without an anonymous account.

The European Commission knows this. To the European Commissioner Paolo Gentiloni in charge of economic and monetary affairs, “Completely anonymous digital euro is not desirable”.

Irish Finance Minister Paschal Donohoe, who chairs the Eurogroup, told last month that “Possibly allow more privacy for small transactions”.

“More” confidentiality… Transaction is anonymous or not. There is nothing in between.

Anonymous transactions can be made in BTC precisely because of the purse anonymous private. But it goes without saying that the ECB will not authorize hypothetical anonymous CBDC accounts.

Quite the opposite. Anonymity is one of the reasons the powerful bitcoin is hated. Christine Lagarde was also worried about people a “does not understand the risks and who will lose everything”. “My humble opinion is that (bitcoin) is not worth anything, it is not based on anything. »

“The day we have the digital euro, the central bank will be behind it, and I think that’s very different”she added.

It’s a lie Bitcoin Bitcoin is about energy, democracy and scarcity. Conversely, the euro is created indefinitely, ex nihilo. He is also being supervised by a woman convicted by the Court of Justice of the Republic …

Watch Christine Lagarde being interviewed on the Dutch TV show ‘College Tour’ about cryptocurrencies and the ECB’s balance sheet expansion.
How are you going to bring it back down? »
“It simply came to our notice then. »
“But do you sleep at night when you see this? »

What will the FAW look like?

Will the FAW have a steady supply of money? If created on a bitcoin model, what guarantees us that this promise will never be broken?

Will the CBDC replace money created by private banks? Will these eventually disappear? Otherwise, will we be able to exchange our BNP Paribas euros for CBDC without any limit?

Will it be programmable? And then basically, why CBDC?

These are all questions that the European Commission sought to answer in the report “Digital Euro: policy implications and perspectives », Published at the beginning of the year. Report containing the same six times the word bitcoin…

In particular, that committee acknowledges “Currency has entered a competitive era”and that the stable tires which will bring currencies into competition both abroad and within borders ”.

Funny enough to emphasize, the paper’s authors acknowledge that bitcoin is a technological breakthrough: “Bitcoin is a very innovative consensus method.” “It simply came to our notice then […]but the price to pay is very low transaction throughput ”is it written though. “Bitcoin is hardly scalable and very powerful. »

There is a little more research and the Brussels technocrats understand that “Very low transaction throughput” not a bug, but necessary for its decentralization.

Bitcoin can handle millions of transactions per second through the Lightning Network:

“The #LightningNetwork has a theoretical throughput 40 million transactions per second. This equates to a 14.4 TB block every 10 minutes. Lightning makes Bitcoin a decentralized method of payment on a planetary scale. »

So, the non – use of altcoins that has succeeded in attracting the customer by promising a high transaction rate by sacrificing decentralization, which is of course crucial.

In addition, please note that the bitcoin protocol is highly scalable (SegWit, Taproot, etc.).

Bitcoin energy consumption is also a false debate. Almost 60% of the energy used by BTC miners comes from renewable sources. Miners need cheap energy. This reality ensures that they all consume excess energy that would otherwise be wasted.

CBDC in lieu of cash

Interestingly, we understand that the main motivation behind the CBDC is to anticipate the end of cash: “If cash were gone, the general public would no longer have access to central bank money.” “The main reason for developing a digital euro in this way is to preserve the role of public money. »

In other words, the ambition of the cash – making powers is gone. Christine Lagarde throws us up when she claims she does not want to end it. She will tell us one fine day: “You misunderstood me, CBDC IS cash”…

By the way, bitcoin was never intended to replace cash. Its raison d’etre is tied to its finite cash supply of 21 million BTC. None » relief not provided for in its protocol…

Another question asked in the introduction is whether “Technology would enable the central bank to open accounts directly to hundreds of millions of euro area citizens”?

This question suggests that the central bank could in future act as a universal bank instead of all private banks. Like Gosbank in USSR …

This is not a case in which he has achieved so much. In fact the debt / world war / peak oil cocktail has a good chance of triggering a major hyper-inflationary reset. That is to say inflation between 50% and 100% over one year.

In the face of bank failures, central banks would be free to restrict the creation of programmable CBDCs. We could imagine that the amounts lent are automatically determined by each other’s social credit …

The Commission considers that “Among all payment service providers, the central bank is the only person not interested in exploiting personal data for profit”…

Whether the FAW is programmable is one of the Commission’s ideas:

“Programming can directly affect the nature and value for money. For example, a currency can be issued with an expiration date beyond its validity, as is done in Hangzhou, China. It can be limited to certain uses, such as food stamps. Paying social benefits in currency with an expiry date would ensure that they are spent and not deposited […]. In theory, governments with an autocratic or moral tendency could limit the use of such social facilities by banning the purchase of alcohol or leisure goods, bringing them closer to food stamps. The possibilities are almost limitless. »

That said, some good questions arise: “But what is the value of a currency with an expiration date or limited use”? “Will it be redeemed as a discount? »

Lucidly, we can read: “Actually, oxymoron is programmable money.” “It simply came to our notice then. »

CBDC risks

The general public probably prefers to hold CBDCs rather than private currency. In fact, a lambda bank can go bankrupt unlike the ECB.

“There is no doubt that a currency that is completely safe and liquid is an extremely attractive store of value, especially if it is offered in unlimited quantities”is it written. “Depending on its design, a significant proportion of deposits could move to the CBDC. »

Without going into the details of the fractional reserve system, there is a risk that private banks no longer have enough reserve money to operate normally. In addition, the ” bank runIt would be easier since all you have to do is click somewhere on your app to exchange your euro BNP or Crédit Agricole for CBDC.

This is one of the problems raised during the first day of the World Economic Forum by Kristalina Georgieva, president of the IMF, and François Villeroy de Galhau, governor of the Banque de France who hammered home that bitcoin.“it’s not a currency”:

“Kristalina Georgieva explores the deepest technical issues of central bank digital currencies. »

As a result, thinkers working on the FAW gas plant envisage an interest rate, positive or negative, alongside:

“Unlike cash, the FAW could technically be charged an interest rate. Many economists believe that this would increase the effectiveness of monetary policy, especially through a negative interest rate. »

In fact, after printing trillions and stealing people’s savings through inflation, it will be necessary to drain the surplus money to avoid the risk of hyperinflation. So think of the negative rate…

This nice plan, however, has lost ground that we have bitcoin, and that without context is the most complete form of money known to mankind. Bitcoin is the escape fromMajor Resethyperinflation.Hold on!

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Nicolas Teterel

Journalist reporting on the Bitcoin revolution. My papers deal with bitcoin through geopolitical, economic and libertarian prisms.

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