In October 2019, Xi Jinping made a historic speech in which he made Blockchain a top technological priority for China's future. At the heart of his speech, Xi Jinping also announced that the country should redouble its efforts to develop its own digital currency: the digital yuan.

A little more than two years later, it is an understatement to say that China has made phenomenal progress with its e-CNY, which is currently being used in tests by more than 140 million Chinese if we are to believe the figures disclosed by the Chinese authorities. One must always take the figures communicated by China with a pinch of salt.

However, China is ahead of the rest of the world in its road to no cash with its e-CNY. Xi Jinping wants to have the first-mover advantage in the field of Central Bank Digital Currencies (CBDCs). This is for two reasons:

• The first is domestic. The e-CNY is the last missing piece in the puzzle represented by the Chinese social credit system that should allow the imposition of a society of seamless mass surveillance on the Chinese population.

• The second is external. China wants to become the first world power in the future before America. To do this, Xi Jinping has understood that it is necessary to attack the domination of the American dollar over the world. This gives America an exorbitant privilege that China and other countries like Russia are no longer willing to pay.

All countries will follow China's example by creating their own CBDCs

Well aware of the risk of leaving China alone in the field of CBDCs in a future world where everything will be digital, many other countries have now decided to embark on the adventure. With a significant delay of course. China has the advantage of being able to move forward on strategic projects more quickly than democratic countries due to its closed system.

Among the countries that have already communicated their intentions to implement their own CBDCs, we find Japan, Sweden, and the European Union. In the end, all countries will come to it sooner or later. When a trend appears, all countries jump on it for fear of being left behind.

Hesitant until now, the Fed will eventually come around. The appointment of Lael Brainard to second Jerome Biden for his second term is a clear sign that the Fed will change its vision on the creation of a digital dollar in the months to come.

All these countries will come into this field, first of all, to not be outdated. Secondly, these countries will also find an advantage in terms of surveillance. These democracies criticize the Chinese system, but will not hesitate to monitor all the financial transactions of their citizens even more closely. Finally, the governments and central bankers of these countries sincerely believe that the people have chosen Bitcoin simply because of the lack of alternatives with fiat currencies.

Once CBDCs are up and running, they hope that Bitcoin will be abandoned.

Governments think that CBDCs will turn people away from Bitcoin, but they are wrong

As Indonesia plans to launch a digital rupiah in the future, Bank Indonesia Deputy Governor Juda Agung has just explained that this will be a great tool to combat Bitcoin:

“A CBDC would be one of the tools to fight Bitcoin and cryptocurrencies. We think people will find CBDC more credible than Bitcoin. The CBDC would be part of an effort to combat the use of cryptocurrency in financial transactions.”

After reading this statement from Juda Agung, I wonder if politicians and central bankers are gullible or if they are playing a game by pretending to understand why the people have been embraced Bitcoin since its inception.

If the CBDC war is going to happen, Bitcoin has already won the battle. What Bitcoin offers is unique. CBDCs will only be an extension of the flaws of fiat currencies to the digital world. With the added big flaw of posing huge privacy risks.

Bitcoin protects you from the ravages of monetary inflation in a way that is resistant to censorship. CBDCs will never be able to offer you that. Bitcoin currently has just over 130 million users. This means that the vast majority of the Earth's inhabitants have yet to discover the digital scarcity invented by Bitcoin.

When that happens, and it will, the demand for Bitcoin will explode. It cannot be otherwise. When you are offered two solutions, you will inevitably go for the one that offers you the most guarantees of protection and privacy. Governments and central bankers will have to get used to the fact that Bitcoin is here to stay.

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