State-Backed Digital Currencies Are Like a Trojan Horse That Will Benefit Bitcoin
Bitcoin’s advantages over these digital currencies are countless.
The digitalization of the world is inevitable. Currencies will not escape this phenomenon, which is taking over all sectors. Faced with the danger represented by Bitcoin, but even more so by the Libra that Facebook announced in June 2019, China has decided to accelerate in this field from the end of 2019.
While its position on the subject had never been really clear, Xi Jinping decided in October 2019 that China should become the world leader in Blockchain technology.
To give life to this desire, China decided to invest billions of dollars in the field. Xi Jinping also gave the order to accelerate the development of the Chinese digital currency, which had been under consideration for some time already.
The race to create its own state-backed digital currency has begun
While Western countries continued to hesitate, and fight to limit the scope of Facebook’s Libra project, China was already moving forward headlong in the creation of its digital currency. The Chinese project of a digital currency is so advanced that it is already being tested in several Chinese cities at the time of writing.
Weibo, the Twitter made in China with more than 420 million users, will be used to accelerate the adoption of this digital currency. Many other companies with a presence in China, such as McDonald’s and Starbucks, will also take part in the tests conducted by China with its state-backed digital currency.
Everything seems authorized in the business world to make the Chinese authorities happy.
Aware that China is once again taking the lead in a strategic area, many other countries have announced that they want to follow China’s lead. Japan is talking about creating its digital currency, as are many European countries.
Last week, the Bank of France even announced that it had achieved a first successful test of a digital euro. This test aimed to demonstrate the feasibility of such a project:
“This experimentation was performed end-to-end using blockchain infrastructures…It demonstrates the feasibility of financial securities being digitally settled and delivered in Central Bank Digital Currency (CBDC) for interbank settlements.”
— Spokesperson for the digital euro project at the Bank of France
The results of this test should then be used for the project of a digital euro which will be decided at the level of the European Central Bank:
“The results of these experiments will be an important element of the Banque de France’s contribution to the more global reflection led by the Eurosystem on the interest of a CBDC.”
— Spokesperson for the digital euro project at the Bank of France
The United States is talking about it, but it clearly does not seem to be on the agenda if we listen to the statements of the American authorities. Many consider that the introduction of a U.S. digital dollar is a double-edged sword that could encourage the adoption of Bitcoin in the end.
Many believe that these state-backed digital currencies are a threat to Bitcoin
Initiated by China, this global movement to create this type of digital currency is considered by some to be a threat to Bitcoin in the future. Personally, I don’t think these state-backed digital currencies are a real threat to Bitcoin.
State-backed digital currencies just don’t play in the same category as Bitcoin.
In fact, these state-backed digital currencies are a total contradiction of the values defended by the Bitcoin revolution.
Bitcoin is the first step in separating money from state. Bitcoin empowers its users by allowing them to be free to live on their own terms.
With Bitcoin, every user can choose to save his or her money. They escape the risk of seeing the decisions of a few central bankers wiping out the value of what they own. As a money protocol for the Internet, Bitcoin allows its users having the right to true privacy when it comes to money.
You have nothing to hide, but you don’t want governments to be able to come and monitor all your financial transactions without your consent.
Furthermore, you want to be able to use your money as you wish. You don’t want a bank to be able to stop you from making a transaction with your money. You want to be free. Bitcoin allows you to protect this fundamental human right.
State-backed digital currencies will pose a fundamental privacy risk
The surveillance society that many countries want to create for the world of the future will only be strengthened with these types of currencies. For China, such a currency is the last piece of the puzzle missing from its Social Credit System.
This Social Credit System is nothing more and nothing less than an instrument enabling the Communist Party of China to monitor massively all the actions of the Chinese people.
Every citizen is graded as good and bad for every one of his actions. Depending on his scoring, a citizen then has more or less rights. The Chinese Communist Party also uses this system to make propaganda to the glory of Xi Jinping.
With its state-backed digital currency, China will be able to better monitor each of its citizens’ financial transactions.
China will also be able to better censor its citizens with regard to money. If cash disappears and citizens have their money mainly in digital form, it will be easier for the Chinese Communist Party to freeze the assets of what they call bad citizens.
It will be the same in Western countries. You have the impression that you are protected because you live in a democracy, but you must bear in mind that the right to privacy is something very fragile. If you don’t fight to preserve it, you will lose it entirely in the future.
Many people are not yet aware of the issues at stake. It will come in time, and when they want to regain control of their privacy, they will happily discover that millions of people have fought to make a formidable weapon of defense available to them.
That weapon of defense against the abuse of government authority over privacy is Bitcoin.
Education in the use of state-backed digital currencies will benefit Bitcoin
In order for the state-backed digital currencies they develop to be truly adopted by their citizens, countries will have to do a great deal of education. Indeed, for many citizens, digital is not a natural process.
Using a digital euro or a digital dollar is not possible without adequate training.
What makes it interesting is that once millions of people have been educated in the use of digital currencies, they will surely want to try out cryptocurrencies.
Until now, the use of cryptocurrencies seemed too complex to them. But once educated in digital currencies, these people will be able to use cryptocurrencies.
There is therefore a high probability that a large number of people will start testing cryptocurrencies.
When a person gets into the cryptocurrency world, they always start by buying Bitcoin first. In the minds of the general public, Bitcoin is synonymous with cryptocurrencies.
So people will mainly come to test Bitcoin.
The challenge is to make the general public aware that Bitcoin is not only a technological revolution, but above all a weapon at their disposal to protect their privacy.
Bitcoin was created to make life better for its users.
The majority of people who use smartphones or the Internet don’t care about the technical details underlying these technologies. With Bitcoin, it will be the same.
Rather than pushing the general public away by losing them with overly technical details, Bitcoiners must show why Bitcoin will improve the lives of millions of people. This is a crucial thing that should help promoting the adoption of Bitcoin in the future.
State-backed digital currencies will be an ideal gateway to Bitcoin for millions of people. Indeed, the education received from their respective governments on the use of digital currencies will allow these people to take the next step in understanding that Bitcoin is not as complex as they imagined.
In this sense, state-backed digital currencies are a real Trojan Horse for Bitcoin.
The funny part of the story is that it is the governments themselves that are pushing this Trojan Horse to millions of people. Whether they are aware of it or not, governments and central bankers will sooner or later follow this path for fear of letting China go it alone in this area.
So you can rest assured. Bitcoin will not be threatened by these state-backed digital currencies. On the contrary, these digital currencies will help Bitcoin’s adoption to explode in the future.