Today’s economy is like a real life soap opera: everyday there’s some new drama.
The race to create a digital currency is heating up around the world. China, Japan, South Korea, Canada, Brazil, Thailand, France, and a few other countries have made it known they are working to create their own digital currency. Read that story HERE.
Australia have just announced the same. Read the story HERE.
TO ME, this signifies two things:
1. Countries are moving away from physical money. The world is shifting to a digital currency. This COULD mean governments would have increased access to people’s spending habits, which means less privacy. They would then be able to track EVERYTHING you buy. That includes all your “only fans” subscriptions.
2. This would be a direct threat to Bitcoin. Many people think Bitcoin will be the new currency, or the cryptocurrency that people will use. I still disagree with this thought.
Per the article: “The Reserve Bank of Australia (RBA) said it was partnering with Commonwealth Bank (CBA.AX), National Australia Bank (NAB.AX), Perpetual and ConsenSys Software, a blockchain technology company, on the collaborative project.”
Look at these banks working together. Did people really think these banks would sit back and let the world pass them by? SURELY people knew they’d try get in on the crypto-craze?
But there’s more: “The project will involve the development of a proof-of-concept for the issuance of a tokenised form of CBDC that can be used by wholesale market participants for the funding, settlement and repayment of a tokenised syndicated loan on an Ethereum-based DLT platform.”
Now the next question is “what does that have to do with Bitcoin?” It’s the ethereum.
Erethrum is defined as the following: “Ether (ETH), the cryptocurrency of the Ethereum network, is arguably the second most popular digital token after bitcoin (BTC).” Indeed, as the second-largest cryptocurrency by market cap, comparisons between Ether and BTC are only natural.
This new digital currency these Australian BANKS are creating would be direct competition to Bitcoin. Countries and banks around the world are creating their own digital currency. This is important because they have the ability to ensure their currency is used and accepted all over their country by every business. Bitcoin can’t do that.
Yes, it’s outside of the monetary system, but it might never get the mainstream use they want if this continues. Please note: with that said, that does NOT mean it won’t go up in value. My thinking is will it be the new reserve currency accepted by all nations of the world? I don’t believe that will happen.
Instead of using bitcoin, I believe Central Banks and other countries could work together to make their currency compatible by everyone for global trade.
Bonus 3rd thought. I said it before and I’ll say it again: he who controls the money has all the power. There’s NO WAY a country will turn over their money to a mystery CURRENCY that was created by a mystery MAN that is not controlled by ANYONE.
Here are my thoughts on this situation:
All these countries AND BANKS will do everything in their power to retain control of their money supply. Of course I could be wrong, but I just can’t see the people in power giving up control of trillions of dollars.
So now, the next question is how will this work? How will the dollars be converted into digital currency? And what about the trillion dollar deficits? How will that be wiped out?
It makes ZERO SENSE to convert to another currency while bringing the old problems (trillion dollar deficits) with it. This is where gold and silver comes into play.
These new digital currencies will PROBABLY be backed by gold and silver.
I could be wrong, but is this really out of the realm of possibility? Time will tell.