CBDC should be created to ‘protect the money’ of the state from accepting bitcoin

The World Economic Forum (WEF) published a letter on August 1 in which it supports the central bank digital currency (CBDC) projects currently underway, especially with regard to the digital euro developed by the European Central Bank (ECB).

In its letter, the body that brings together large multinational companies acknowledged that one of the main reasons it supports the promotion of CBDCs is because it sees them as the main way to deal with growing adoption bitcoin (BTC) and other cryptocurrencies.

For the WEF, one of the first things governments need to do to catch up with the digital economy is to create digital currencies that it says can also “save government money.” From there which confirms the progress of the increase in the number of CBDC projectsciting the fact that currently 11 countries have fully launched their national digital currencies, with China leading the way with the digital yuan.

“There are several factors for this momentum (the CBDC breakout). First of all, this approach can help protect public money from the rise of cryptocurrencies like bitcoin,” says the WEF publication, which also compares both types of currencies.

Proponents of central bank-managed currencies argue that having a centralized authority provides stability and allows monetary policy to solve economic problems, unlike unregulated decentralized cryptocurrencies known for their high volatility.

World Economic Forum

So, after briefly comparing CBDCs to cryptocurrencies, the World Economic Forum presented another reason why it favors CBDCs: related to financial stability.

Thus, he reiterates, as do organizations such as the International Monetary Fund (IMF) and the Bank for International Settlements (BIS), that cryptocurrencies pose a risk to maintain this stability. This is in view of the fact that people are “withdrawing large amounts of money from the banking system to put them in their digital portfolios.” By this he means that people withdraw money from banks, you invest it in BTC and get control over your financial resources, out of control of central banks and the banking system.

However, in the same letter, the WEF indicates that these withdrawals from the banking system are “minimal.” He mentions a study recently conducted by the European Commission as part of the presentation of digital euro regulation, in which it is calculated that such movements do not pose risks to financial stability.

In addition, a brief comparison was made between CBDC and stablecoins or stablecoins, noting that the same they are not very stable because “they depend on the stability of the organization that issues them.” And while it’s not stated, it’s about diverting people’s interest in this type of currency, which are seen as “possible substitutes for national currencies, according to BIS investigations reviewed by CriptoNoticias.

Twitter users respond to WEF: “We don’t need your control”

WEF Publication shared on twitter by some members of the bitcoin community who criticized the authority’s arguments. They used phrases like slave coins (working currencies) to refer to CBDC and “no thanks, I’m not interested”, clarifying their position against launching this type of currency.

Responses to information also included comments that questioned the notion of “public money” expressed by the WEF, indicating that “there is no money more widely available than Bitcoin.” Please indicate that BTC is public to the extent that it is “forbidden”., that is, anyone can use it; and also because all movements in the Bitcoin network are recorded and visible to the whole world in the blockchain.

In the same way, the protection of centralized money administered by the state, without the participation of citizens, proposed by the Economic Forum, is refuted.

In addition, the protection of the opportunities that cryptocurrencies provide for people to manage their money without this interference is seen in phrases such as “CBDCs are ideal for governments.”

Finally, criticism has also been directed to CBDC privacy promises this is being done in various running projects that have been confirmed by the WEF and which twitterers have deemed false. Hence the ironic responses like: “Yes, total confidentiality between you and the government” or “Promise complete confidentiality or complete control?