BREAKDOWN: No, the Digital Dollar Won't Kill Bitcoin
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 8 March 2021
⏱️ 15 minutes
🧾️ Download transcript
Summary
Why CBDCs are growing as a focus for governments, and what impact they’ll really have on bitcoin.
This episode is sponsored by Nexo.io and Casper.
On today’s episode, NLW provides a 101-style overview of central bank digital currencies, looking at:
- Why governments are interested in CBDCs
- Why Facebook’s libra announcement accelerated CBDC development the world over
- Why China’s CBDC efforts are driven by an attempt to shift power in the U.S. dollar-led global economy
- How the U.S.’ rhetoric around central bank digital currencies is changing
- Why CBDCs are likely to be good for bitcoin
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Transcript
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| 0:00.0 | Welcome back to The Breakdown with me, NLW. |
| 0:09.5 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 0:15.9 | The breakdown is sponsored by nex0.io and Casper and produced and distributed by CoinDesk. |
| 0:23.0 | What's going on, guys? It is actually, I have no idea what day it is. This is one of the episodes |
| 0:28.1 | that I'm recording in advance of being out for a couple days to witness the birth of our new |
| 0:34.7 | child. So I'm not actually sure what day it's coming to you. But I thought it would |
| 0:38.6 | be fun to talk about digital dollars and their relationship to Bitcoin, given that we had some |
| 0:45.4 | new comments from Jerome Powell, the Fed chair over the last couple weeks, about how a digital |
| 0:50.7 | dollar is finally going to come to the four of the Fed strategy in 2021. |
| 0:55.5 | The name of this piece is the same as my TLDR thesis, which is, no, the digital dollar won't |
| 1:03.1 | kill Bitcoin. To understand why, first we need to talk a little bit about central bank |
| 1:08.1 | digital currencies in general. A central bank digital currency |
| 1:11.8 | is pretty much exactly what it sounds like. It is the digital equivalent of cash. But isn't |
| 1:17.8 | money already digital, you say? The difference is that these digital currencies would actually |
| 1:22.7 | be bearer instruments. In other words, they're not just a digital representation of something that exists |
| 1:28.2 | elsewhere offline. So when a tether is minted, for example, there is theoretically a U.S. |
| 1:34.8 | dollar that exists somewhere that it can be redeemed for. It has no other value other than |
| 1:39.9 | that dollar that it can be exchanged for. A central bank digital currency, a Fed coin, would work in a way |
| 1:45.8 | where the digital dollar was itself the thing that had value. It wouldn't correspond to an offline |
| 1:51.1 | dollar. Importantly, another difference from something like a tether is that it would be completely |
| 1:55.9 | under the jurisdiction of the issuing government. It would be digital fiat, with a money supply that could |
| 2:02.1 | be controlled just as it is controlled today, indeed with even more precision. Which gets us to |
... |
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