Shant Mesrobian
@shantmm
Perhaps another stupid/newb question but: A CBDC basically demolishes the use case of stablecoins, right? I understand that current Trump policy has buoyed people's hopes of throwing CBDCs into the ash heap of history, but highly contentious and partisan-aligned policies are not very, uh, stable nowadays. I can easily see this seesawing between administrations. And in the event of a financial crisis? Forget about it. I think the opening for monetary innovation in that event would put CBDCs squarely back on the table.
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Daniel Fernandes
@dfern.eth
Not to be a nitpick, but I think there's a 3rd option, which is the US Treasury issues a digital dollar rather than the Federal Reserve (so technically not a 'central bank' digital currency). This has been Rohan Grey's hobby horse for a hot minute: https://ecashact.us/ While it does seem like a distinction without a difference, I think the "political mandate"/"cultural DNA" difference between the two orgs do cash out in some important ways, namely: 1. The Treasury has a more muted financial surveillance mandate 2. They don't have a mandate to support the private banking system 3. They answer to the administrative branch & congress. No 'independence' smoke & mirrors. 4. They are allowed to produce seigniorage income for the country, the Fed must pair currency issuance (a liability) with debt (an asset to the Fed). This is good if you're an MMTer and bad if you're an Austrian. 5. They don't have a mandate to balance employment & inflation. (A farcical mandate if you're a free marketeer)
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Shant Mesrobian
@shantmm
Fair, but I don't think we can just glide past the whole "Step 1: Abolish the Fed" thing. Why does Treasury have less of a financial surveillance mandate? If anything I would think it has more.
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Daniel Fernandes
@dfern.eth
A few things, the nature of issuing paper currency lends itself to admitting that you can't effectively surveil its use without gumshoe police work. The Fed on the other hand is heavily involved in looking at the balance sheet of banks, and this filters down into what customers and loans the banks are involved with, which is the key mandate that led to Operation Chokepoint 1.0 & 2.0, though to be fair, the worst of it came from the FDIC under Marty Gruenberg rather than the Fed per se. I agree the Treasury could do more surveillance if they wanted to, and maybe they would if they issued a digital currency (onchain or not).
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