Listen to this episode:
For this episode of Bitcoin Magazine’s Fed Watch, my cohost Christian Keroles and I go into details about the European Central Bank’s (ECB) plans regarding the digital euro. We are told in the media that central banks are going to release Central Bank Digital Currencies (CBDCs) and this will have damaging economic effects. However, on this podcast episode, we get our information straight from the source.
First, we have to answer a crucial question: will a digital euro really be launched and why? (In future installments, we’ll cover the side effects of CBDCs, if any.)
On November 30, 2020, ECB President Christine Lagarde released a blog post detailing the ECB’s current thoughts on money and how a digital euro, or CBDC, fits into its plans. I talked about this on my own recent episode of Bitcoin & Markets, and Keroles wanted to specifically examine the idea of the ECB’s concerns, as her thinking appears to be deeply concerned about monetary sovereignty.
That term, “monetary sovereignty”, was mentioned several times in Lagarde’s blog post in the context of why the ECB believes the move towards a CBDC is necessary. This contrasts with statements by Federal Reserve Chairman Jerome Powell, which focused on patience and conservatism rather than concerns about monetary sovereignty. Why is this?
Most likely, this is because there are already digital stablecoins, which function in the same way as how a digital euro would function in the market. But there is a major problem in the free market supply of these stablecoins from the ECB’s point of view: they are 99 percent US dollar based. If the ECB did not act, the market could completely bypass the use of the euro in favor of a digital dollar. That’s a scary option for the ECB, so it must provide that option to the market, and may even require its use in some cases to maintain the global position of the euro.
This episode also covered MicroStrategy’s recent “bonds for bitcoin” proposal. Listen to find out if these are the first signs of bitcoin’s highly anticipated “speculative attack” on fiat, and what to watch out for as this move gets the keen attention of regulators.
We have also discussed at length jurisdiction arbitration. How does bitcoin allow for judicial arbitration, even in regions such as the US or European countries? Of course, as good bitcoiners, this leads us to a cosmic back and forth across citadel locations, and the best place to live in the future from a freedom and economic standpoint.