Bitcoin (BTC) holders looking to avoid central bank digital currencies (CBDCs) may have gained a surprise ally: banks.
In his latest post, “Pure Evil,” Arthur Hayes, former CEO of crypto derivatives platform BitMEX, argued that banks can limit the impact of the CBDC “horror story.”
Hayes: Bitcoiners and Banks Oppose CBDC ‘Dystopia’
CBDCs are currently in various stages of development around the world.
They are naturally feared and even despised by supporters of financial sovereignty, since they imply total government control over everyone’s money and purchasing power, “a frontal assault on our ability to have sovereignty over honest transactions between us,” Hayes says.
However, among those who oppose CBDCs are not only Bitcoiners. The cause is likely to be shared by commercial banks that they have tried to oust from power with BTC.
“I believe that the apathy of the majority will allow governments to easily take physical money away from us 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 think will impede the government’s ability to implement the most effective CBDC architecture to control the general population – and that ally is the national commercial banks.”
By implementing a CBDC, a government could make the central bank the sole “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, respectively.
“Given that all countries that have reached at least the stage of ‘choosing a CBDC model’ have opted for the Wholesale Model, it is clear that no central bank wants to fail its domestic commercial banks,” he reasons.
Thus, in order to “ placate ” the banks to some extent but still achieve benefits such as the eradication of cash, governments may ultimately be held in check by the type of entities known to limit cryptocurrency exchange transactions and ban hodlers accounts.
“For politicians who care more about power than profit, this is your chance to completely destroy the influence of the Too Big to Fail banks, and yet it seems they remain politically incapable of doing so,” adds Hayes. .
“Capital controls are coming”
The topic of CBDCs receives wide attention, even beyond the cryptocurrency industry, as they represent a major change in both 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 banking regulator is suddenly saying that now we are going to compete against the banks because the banks don’t stand a chance. You can’t compete against the regulator,” he said.
Hayes, for his part, noted that Bitcoin is a safe haven still available to those already opposed to any form of zero-money economy, but not for long.
Buying BTC will become increasingly difficult, or perhaps outright 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 catastrophic porn resonates with you and you don’t own even a very small % of your liquid net worth in Bitcoin, the best day to have bought Bitcoin was yesterday.”
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