Cryptocurrencies’ dream of escaping the global financial system is crumbling | Quinn Slobodian

in DLIKE7 months ago (edited)


In this article published in the Guardian, the author, a profession of history at Wellesley College states, among others: 

Indeed, the libertarian dream shared by their early proponents appears to be dying at the very moment cryptocurrencies have broken through to the mainstream. "Stablecoins" are pegged to the value of national currencies, while the US Federal Reserve is developing its own digital currency. Elsewhere the Bank for International Settlements recently lent its support to central bank digital currencies for the first time. These developments turn the original purpose of stateless money on its head.


We would like to highlight two fallacies in his arguments. He has used several examples of developments in the crypto world to support his theory that the original purpose of the early cryptocurrency proponents of making cryptocurrencies a stateless money is no longer true. 

He points out that "stablecoins" being pegged to the value of national currencies defeats the purpose of cryptocurrencies being a stateless money. Perhaps he has not looked into the meaning of "Stateless." Stateless, simply means the currency is NOT issued by a central or provincial  government. Stablecoins are issued by private entities to facilitate cryptocurrency trading and investments. They are adjuncts to cryptocurrencies that are useful for the crypto community. Simply being pegged to a value of a national currency doesn't make a Stablecoin lose its stateless characteristics. To say otherwise is a form of crooked argument. 

Then he goes on to say that the fact that the U.S Reserve Bank is developing its own digital currency and the Bank of International Settlements is lending its support to central bank digital currencies (CBDC) also make the cryptocurrencies lose their stateless characteristics. Here again he comes up with another crooked argument to support his theory. At best these CBDCs are competitors to the privately issued cryptocurrencies such as Bitcoin, XRP, Ether etc. Being issued by the central governments the CBDCs are themselves not stateless (i.e. state currencies) , of course. But how on earth can a competing currency in the form of a CBDC remove the "stateless" characteristics of privately issued cryptocurrencies, is beyond our comprehension. 

It is really discomforting to see such totally misleading opinion post being published in an online newspaper of the stature of the Guardian. 

Cryptocurrencies' dream of escaping the global financial system is crumbling

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