The build up is phenomenal. In some circles, it just keeps growing.
History might not repeat itself but it sure does rhyme. For those old enough, this is what we witnessed during the late 1990s with Y2K. That was a fear driven bunch of nothing. We had politicians, like the Vice President at the time, leading the charge of the dangers of Y2K.
The world was going to stop.
Again, as a favor to those without any gray hairs, Y2K was the fear that all computer programs would cease functioning because they were designed with only two digits for the year. This means that going from 99 to 00 might cause the computer to think it was 1900.
Obviously, this would have profound ramifications. Naturally, it was a total nothing burger, providing a lesson for all.
Yet, somehow, we see the same gullibility.
For the last 5 years, there is a subset of the crypto world that cannot shift its focus away from CBDCs. These are coming and going to take over the world. After all, governments have the ability to control money, or so they think.
Ironic, we are at least 5 years in and where are all the CBDCs. China introduced one for testing and even rolled some phases out. Is that taking over anything? How about Japan and the yen? we saw a rollout of testing, only to have that bagged.
In spite of this, I had people swearing to me on threads that CBDCs were coming. Some even claimed that the Fed was in the process of setting one up. Jerome Powell has been consistent with the "not on his watch" mantra. He never was for it.
Now, we get news of another CBDC put on the shelf.
Notice the country: Russia is delaying its CBDC indefinitely.
This is Russia, a country not exactly know for protecting the rights of its citizens. Yet even this central bank is stepping back from bringing forth a CBDC.
It really is to the point where it is laughable. The fears around this are nothing more than Y2K, Part II. In other words, it is a giant nothing burger.
The reason why this is the case is because Gresham's law does not hold up. History reveals this dating back to the Roman Empire. There are some instances, such as with legal tender, where some of this is applicable. However, that quickly dissolves when looking at things beyond an individual nation.
Mentioning the digital yuan was purposeful. China is a country where that CBDC can have 100% acceptance. The CCP, if they retain power, can order it so.
Where it falls flat is who outside China is going to use it? What company would use a currency that the CCP not only can monitor but also can wipe out in an instant? Do you think anyone in Japan or Europe will use it?
Not likely.
Of course, the same is true for a CBDC from the Fed. Nobody is going to take that chance at being obliterated because of the political winds of the US government.
We are in the technological era. National boundaries are becoming less important. This, too, is something that will accelerate. The digital realm is becoming more ever present (and powerful). Where one resides will keep getting less important.
CBDC as broad economy money are dead on arrival. Governments will find other ways to control, such as regulating the likes of USDC and USDT. We could see tokens that central banks provide for movement among its member banks. Of course, this is already in place with reserves.
As noted elsewhere, JP Morgan brought out a token that is used by a handful of financial institutions on its network. Again, this is not broad economy money and is nothing more than a bank instrument.
Governments and central banks keep pulling back while development in the crypto world is ongoing. This is a race and the slow horse is going to be lagging a great deal.
My view it is still at the starting gate.
