Kingdom of CBDC:
CBDC or Central Bank Digital Currency, is a tool for the government to collect financial information.
It is a double edged sword that can benefit society as a whole by preventing money laundering and against illegal activities funded through money transactions to even prevent terrorist attacks.
However, it can also unintentionally collect large data of transactions from everywhere into the government's hand to store for future unknown usage.
Kingdom of Cryptocurrency:
Cryptocurrency is also a double edged sword for anonymous solutions.
One way, it does protect individuals through cryptographic technology of payment transactions so that it is safe and untraceable. However, people may utilize with bad intentions to do money laundering and against illegal activities funded through money transactions to even funding for terrorist attacks.
Kingdom of TechCoin:
Big tech companies are a bunch of people that sell technology as the only solution for the future but intentionally allowing privacy evasion to collect data and constantly analyze human behaviors and want to find ultimate solutions to predict human behavior. It is also a double edged sword that they may also create their own TechCoin to against CBDC and/or cryptocurrency.
These three solutions are creating a war that people may not realize what was happening under the curtain.
Issue we are facing now:
Cryptocurrency made its first move since 2018 with rolling out of stablecoin as a first sign to seriously challenge the Central Bank. Bitcoin was a program that had less threat to the banking system because of slow adoption of crypto technology and hugely speculation of its valuation. People scrapped their heads to understand whether such digital currencies were a fiat currency or virtual asset. Even today, people are still arguing whether or not Bitcoin belongs to what categories and how to define it. Its confusion identity helped Bitcoin doge several regulation scrutiny and perhaps help it grow to attract more users. But such an amount of users may not make an impact on the banking system. As Gallup’s poll suggested from 2018 of 2% adoption to 6% adoption of younger investors in 2021.
Compared to adoption rates from CBDC, it has surpassed the speed of adoption of cryptocurrency. Of 81 countries researching their own CBDCs, 16 out of 81 have already rolled out their pilot programs.
As countries with more cashless transitions, it is more likely that to implement CBDC easier and faster. According to Quartz data, the U.S. has reached 68% of cashless transactions compared to (South) Korea with 86% and their own CBDC pilot program has rolled out.
With more integration of banking system, it makes nobody escapes from more and ever controlled system and Central Banks are more than ever be powerful.
Big tech companies were pushed to love crypto because they can use them to doge taxes, or unfriendly regulations. CBDC will force tech companies to submit their shadow accounting data which they are so unwilling to submit to the government.
Of course, tech companies have the ability to issue their own TechCoin when regulations are more friendly toward cryptocurrency because they largely own assets regulated by the government.
Cryptocurrency becoming legal tender will not likely happen in the future because CBDC is their only solution to counter crypto adoption. Tech companies likely quietly resist CBDC through using crypto for their viable payment solutions or create their own wallet infrastructure to accept crypto to store value or even go beyond to create TechCoin to dominate cryptos and CBDCs.
Whatever the future happens, these relationships are becoming more complicated and commingle into each other.
My takeaway about the issue:
My opinion is that CBDC will allow crypto co-exist because tech companies are likely using their money to politically pressure the government to give up some power of surveillance while letting them control some of the power.
I also think that the worst case scenario CBDC will tap into cryptocurrency and infiltrate into its wallet technology to let cryptocurrency become an unless. But this will take a while to happen and quantum computers may be released by then which makes another biggest threat to cryptocurrency security obsolete.
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CBDC vs Cryptocurrency: the War of Privacy
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Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose cryptocurrencies are mentioned in this article. This information is only for educational purposes.