This bill has just passed the US House of Representatives. Why is this important?
Today, we have Visa and Mastercard as our choice of digital payment. Some have floated crypto as an alternate, but crypto is complicated and not backed by an economy or central bank. Others have floated the idea of a central bank digital currency (CBDC) that matches the availability of Mastercard and Visa, but do not go through their services. It could also be used offline with smart devices.
Some critics have cited concerns over privacy, where the central government could collect information, while others have pointed out that Visa and Mastercard collect that sort of data anyways, and CBDCs might log less data if designed differently.
The point may soon become moot if the bill passes the Senate and receive the president’s signature
My take on this bill is that it’s a ban that should not be put into place. CBDC can still be issued to banks though, just not for you and me. It keeps Credit card companies able to charge high merchant fees.
If I were to write a bill on CBDC, I would put in privacy restrictions into the bill, but still allow for individual CBDC to be issued.
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I was shooting heroin and reading “The Fountainhead” in the front seat of my privately owned police cruiser when a call came in. I put a quarter in the radio to activate it. It was the chief.
“Bad news, detective. We got a situation.”
“What? Is the mayor trying to ban trans fats again?”
“Worse. Somebody just stole four hundred and forty-seven million dollars’ worth of bitcoins.”
The heroin needle practically fell out of my arm. “What kind of monster would do something like that? Bitcoins are the ultimate currency: virtual, anonymous, stateless. They represent true economic freedom, not subject to arbitrary manipulation by any government. Do we have any leads?”
“Not yet. But mark my words: we’re going to figure out who did this and we’re going to take them down … provided someone pays us a fair market rate to do so.”
“Easy, chief,” I said. “Any rate the market offers is, by definition, fair.”
He laughed. “That’s why you’re the best I got, Lisowski. Now you get out there and find those bitcoins.”
“Don’t worry,” I said. “I’m on it.”
I put a quarter in the siren. Ten minutes later, I was on the scene. It was a normal office building, strangled on all sides by public sidewalks. I hopped over them and went inside.
“Home Depot™ Presents the Police!®” I said, flashing my badge and my gun and a small picture of Ron Paul. “Nobody move unless you want to!” They didn’t.
“Now, which one of you punks is going to pay me to investigate this crime?” No one spoke up.
“Come on,” I said. “Don’t you all understand that the protection of private property is the foundation of all personal liberty?”
It didn’t seem like they did.
“Seriously, guys. Without a strong economic motivator, I’m just going to stand here and not solve this case. Cash is fine, but I prefer being paid in gold bullion or autographed Penn Jillette posters.”
Nothing. These people were stonewalling me. It almost seemed like they didn’t care that a fortune in computer money invented to buy drugs was missing.
I figured I could wait them out. I lit several cigarettes indoors. A pregnant lady coughed, and I told her that secondhand smoke is a myth. Just then, a man in glasses made a break for it.
“Subway™ Eat Fresh and Freeze, Scumbag!®” I yelled.
Too late. He was already out the front door. I went after him.
“Stop right there!” I yelled as I ran. He was faster than me because I always try to avoid stepping on public sidewalks. Our country needs a private-sidewalk voucher system, but, thanks to the incestuous interplay between our corrupt federal government and the public-sidewalk lobby, it will never happen.
I was losing him. “Listen, I’ll pay you to stop!” I yelled. “What would you consider an appropriate price point for stopping? I’ll offer you a thirteenth of an ounce of gold and a gently worn ‘Bob Barr ‘08’ extra-large long-sleeved men’s T-shirt!”
He turned. In his hand was a revolver that the Constitution said he had every right to own. He fired at me and missed. I pulled my own gun, put a quarter in it, and fired back. The bullet lodged in a U.S.P.S. mailbox less than a foot from his head. I shot the mailbox again, on purpose.
“All right, all right!” the man yelled, throwing down his weapon. “I give up, cop! I confess: I took the bitcoins.”
“Why’d you do it?” I asked, as I slapped a pair of Oikos™ Greek Yogurt Presents Handcuffs® on the guy.
“Because I was afraid.”
“Afraid?”
“Afraid of an economic future free from the pernicious meddling of central bankers,” he said. “I’m a central banker.”
I wanted to coldcock the guy. Years ago, a central banker killed my partner. Instead, I shook my head.
“Let this be a message to all your central-banker friends out on the street,” I said. “No matter how many bitcoins you steal, you’ll never take away the dream of an open society based on the principles of personal and economic freedom.”
He nodded, because he knew I was right. Then he swiped his credit card to pay me for arresting him.
To me, if we saw a CBDC it would be important that the government is not able to prevent anyone from transacting with someone else, or to track who is giving money to who.
I imagine such a law would be dead on arrival, so kind of a moot point. But I would argue any CBDC should function like cash - fungible, not tracked (except in cases where they have to use old fashioned detective work)
and not backed by an economy or central bank
Yeah, that’s the point of using cryptos like Monero
There’s a big difference between the two though. Usually in the US, we have transactions in dollars. Whether by credit cards or cash.
With crypto, you have to go to an exchange, and set up payment devices. Then the other person would have to set up that too. Monero trades availability for privacy and sanctions relief
A CBDC wouldn’t really compete with Monero. It would compete with things like PayPal where it’s still in dollars.
