Central bankers and an increasing number of politicians are getting truly scared by crypto.
This transpires even in the language used to describe of it: few officials now speak of its “insignificance” (a widely used characteristics until some time ago), and warfare terms appear increasingly often.
After Erdogan’s “We are at war with crypto”, it is now the Indonesian Central Bank that goes to war. As its assistant governor Juda Agung put it:
“A CBDC would be one of the tools to fight crypto. We assume that people would find CBDC more credible than crypto. CBDC would be part of an effort to address the use of crypto in financial transactions.”
CBDCs, or Central Bank Digital Currency, may have only one point in common with crypto : it could be transferred fast. That’s all.
It is not independent, it is not immutable, it is not accessible to everyone everywhere and it is most certainly not governed by its users. CBDC is just a (more) digital version of a fiat currency and is subject to the same flaws.
Will people find it “more credible than crypto”? It really depends on what information people dispose of. So while DCenter and so many other crypto educators try to explain the benefits of a decentralized system, Central Banks and other central authorities are working hard to preserve (and justify) the status quo. Maybe it is a war after all – the information one.
In Indonesia, the Central Bank has got itself a curious ally that has influence over the millions of its people – the country’s religious authority called National Ulema Council (MUI). In the end of October, MUI declared that crypto is “haram”, or forbidden, due to its alleged “uncertainty, wagering and harm”. This should deter MUI-abiding Muslims from investing in crypto until the MUI decides that it shows a “clear benefit”.
Decidedly, allowing every person on a planet access an independent worldwide financial system that could save their livelihoods from inflation and provide an alternative source of revenue is not considered a benefit enough for the MUI, which would probably prefer that nothing disturbs the ancient tradition of the poor staying poor, and the rich staying rich.
In the end of the day, however, it is useful to remember that we are speaking about money, and throughout the history people always ended up using the money that they considered the most sound.
Bitcoin adoption curve so far is the biggest proof that sound money is now cryptographic and decentralized, and although Bitcoin is neither fighting anyone, nor declaring anything “haram”, it is chosen by more and more people as their money.