Shant Mesrobian on Warpcast

Shant Mesrobian pfp

Shant Mesrobian

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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Dan Romero pfp

If it were to happen, yes. But: 1. If the STABLE Act passes, would require a repeal and replace. Which would be much harder. 2. If stablecoins continue to grow, they will be a big business for banks, so would expect a lot of lobbying against. 3. The analogy here would be trying to move email over to the Postal Service in the 1990s. Once it's out there as a protocol, very hard to unwind culturally.

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Daniel Fernandes

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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᠎ pfp

@valkenburgh is an expert on this. from an civil liberties POV, it's a nonstarter, and bank surveillance is already overreaching with mandatory surveillance of transfers in the triple digits. besides, it's been in development for a long time, and stablecoins are already in production and battle-tested through black swan events. relatively, it's more Luddite than innovative.

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Aaina pfp

how anyone in crypto can even begin to consider the idea of a CBDC. If you want to become a Sith lord kindly leave the Jedi knights table people.

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alexander the great

i believe CBDCs could rival stablecoins, but stablecoins offer decentralization, privacy, and DeFi perks a CBDC might not. Trump’s anti-CBDC stance may pause things, but politics and crises could bring CBDCs back. Stablecoins might survive in niches like DeFi or by offering yields and freedom a CBDC can’t. Crises could boost both CBDCs and crypto as trust in banks falters.(which is happening currently)

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six pfp

nah imo, big reason stablecoins have gained adoption is bc they are global and permissionless, whereas CBDC would be domestic and permissioned CBDC might influence whether americans hold money in stablecoins but it would not effect something like international remittances, lending, payments outside of the US, etc.

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shazow pfp

I don't think there is a strict definition for what a CBDC must be aside from that it's central bank managed. Realistically it would end up being some API to some server, like Stripe, with all the risks associated. That doesn't mean we'd be able to use it in the same way we use onchain stablecoins. Like, I can't put it in my smart wallet with programmable security, I can't use it as collateral for AAVE, I can't tip on Warpcast with it, etc. Even the most optimistic case, where a CBDC is deployed onchain in a somewhat compatible way, then it just becomes another stablecoin. What's there to demolish? USDC did not demolish USDT, or EURC, etc. If anything, the usage of stablecoins has just increased with more availability in different markets.

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Koolkheart pfp

@koolkheart.eth

Not a stupid question at all, CBDCs and stablecoins overlap in function but diverge in philosophy. One’s centralized state money, the other’s programmable public infrastructure

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eatzebugs🎩 pfp

https://en.m.wikipedia.org/wiki/ENaira

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