There are countries where people are forced to use a CBDC, and others, like Norway, where they are required by law to accept cash.
The war on cash
Bitcoin is a line of defense against the horrors of money printing, but also against the dark scenario of the disappearance of cash.
This is the grand design: to replace cash with a CBDC (Central Bank Digital Currency). The central bankers are not worried. They justify this by arguing that the share of digital payments is gaining ground.
Certainly, but at the same time, where are the ATMs? Banks closed six ATMs per day last year. All that's left is 44,000 whereas there were more than 50,000 just four years ago. Those replaced by “independent” distributors incur absolutely prohibitive costs.
Closing bank ATMs allows card providers to make more money. In Europe, Visa and Mastercard take 0.30% of the amount of each transaction. This goes up to 4% in some countries. This is as much money as merchants do not receive compared to a cash transaction.
The end of cash would be extremely lucrative for Visa, Mastercard, Apple pay, etc. So the CBDC could be attractive if its transactions were to be fee-free. The price to pay will nevertheless be to reveal its purchasing history to the State.
Goodbye to private life, with all the risks that this implies, particularly in the event of war. In Ukrainethe credit cards of conscripts who refuse to go to the front are systematically blocked.
The Norwegian case
Norway is a largely cashless society. Credit cards and smartphones are widely used. So much so that some points of sale have started to refuse cash…
Faced with this worrying trend, the Norwegian parliament amended the law to strengthen consumers' right to pay in cash. The law came into force this Tuesday, October 1.
Justice Minister Emilie Enger Meh recommends keeping cash on hand:
“The world around us is becoming increasingly unstable, with war, digital threats and climate change. We must prepare for prolonged power outages, system outages or cyberattacks that cause disruptions to digital payment methods. »
It is reassuring to see countries opposing the end of cash. That said, Norway is a rich country where there is little point in infiltrating payment methods. Leaders of emerging countries are much more receptive to the promises of CBDCs.
In this regard, let us recall the words of Bo Li, member of the IMF executive board:
“The CBDC can allow government agencies as well as the private sector to program the currency to enable, for example, the payment of social assistance such as food stamps. The programmability of the CBDC makes it possible to precisely target who can use it and how. This money could, for example, only be spent on food. »
Bitcoin, cash 2.0
Very rich countries like Norway probably have little to fear. Cash will undoubtedly remain a payment option.
On the other hand, many countries realize that withdrawing cash would make it possible to tax each transaction and easily implement rationing.
For example, a government could temporarily block the purchase of certain imported products in order to reduce the trade deficit. More painful, it would then be possible to implement negative rates on savings.
This is why bitcoin is so successful in a country like Nigeria where the central bank is trying to replace its CBDC with cash. It is written in advance that the masses will lose if cash were to disappear.
Bitcoin is a bulwark against all these CBDC projects which are already starting to fail. There canadian central bank has just announced “reducing” its work on the issue while remaining on the lookout for a window of opportunity:
“Recognizing that there is currently no compelling case for creating a CBDC in Canada, the Bank is scaling back its work on creating a central bank digital currency for individuals […]. The body of knowledge gained over the past several years will be valuable if, at some point, Canadians, through their elected representatives, decide they need a digital Canadian dollar.”
This is probably the Trump effect. The one who could soon return to the White House is in fact categorically opposed to the CBDC.
Whatever happens in the four corners of the world, bitcoin will remain the fallback solution par excellence. Its low transaction throughput does not allow it to be competitive with Mastercard, but it remains a completely functional and inexpensive non-censorable payment method if necessary.
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