Who Is Better for Bitcoin, Trump or Biden?

CRYPTONAIRE LYWEEK CRYPTO investment journal

Is America being left behind? China is on the verge of issuing a central bank digital currency (CBDC) while America twiddles its thumbs.

America needn’t worry. While it may look like a slacker, its approach to digital currency is probably the right one.

J.P. Koning, a CoinDesk columnist, worked as an equity researcher at a Canadian brokerage firm and a financial writer at a large Canadian bank. He runs the popular Moneyness blog.

That’s because there is no first-mover advantage to issuing a central bank digital currency. With many products, being the first out the door is important to achieving brand dominance. But central bank digital currency is characterized by last-mover advantage, not first-mover advantage. Best to sit back and learn from the less-patient central banks as they struggle with their new digital projects.

What is a CBDC?

Central banks currently offer digital payments, but only to banks and other financial institutions. Their interaction with the public has been limited to paper money. A central bank digital currency, or CBDC, would provide everyone with an opportunity to get access to a digital version of central bank money. You or I could hold digital Federal Reserve dollars or Bank of Japan yen in our digital wallets and use these balances to buy coffee.

For years, CBDC has remained a theoretical construct of white papers and central bank thoughtpieces. But recently the People’s Bank of China began to pilot a CBDC, Sweden is working on a proof of concept, and the Bahamas launched its “sand dollar” CBDC project. Read more...