Buying Bitcoin ‘will disappear quickly’ when CBDCs launch – Arthur Hayes
Bitcoin (BTC) holders looking to avoid Central Bank Digital Currencies (CBDCs) may have gained a surprising ally – banks.
In his latest blog post, “Pure Evil”, Arthur Hayes, former CEO of crypto derivatives platform BitMEX, argued that banks can limit the impact of CBDC’s “horror story”.
Hayes: Bitcoiners and banks stand against CBDC ‘dystopia’
CBDCs are currently in various stages of development around the world.
Fans of financial sovereignty fear and even despise them, as they involve total government control of everyone’s money and purchasing power — “a full-frontal assault on our ability to have sovereignty over honest transactions between us,” says Hayes.
Among opponents of CBDC are not only Bitcoiners. Sharing the cause will likely be the commercial banks they have tried to remove from power with BTC.
“I believe majority apathy will allow governments to easily take away our physical cash and replace it with CBDC, ushering in a utopia (or dystopia) of financial surveillance,” the blog post explains.
“But we have an unlikely ally that I think will hinder the government’s ability to implement the most effective CBDC architecture to control the general population — and that ally is the domestic commercial banks.”
By implementing a CBDC, a government can either make the central bank the sole “node” in the digital network, or use commercial banks as nodes in a less radical overhaul of the financial system. Hayes calls these systems the Direct Model and the Wholesale Model respectively.
“Given that every country that has at least reached the ‘choose a CBDC model’ stage has chosen the wholesale model, it is clear that no central bank wants to bankrupt its domestic commercial banks,” he reasons.
As such, in order to “satisfy” banks to some extent, but still achieve benefits such as eradicating cash, governments may ultimately be held in check by the kind of entities known to restrict crypto exchange transactions and ban hodlers’ accounts.
“For politicians who care more about power than profit, this is their chance to completely destroy the influence of Too Big to Fail banks – and yet they still seem politically unable to do so,” adds Hayes to.
“Capital controls are coming”
The subject of CBDCs is receiving widespread attention, even outside of the crypto industry, as they represent a major shift in both money and politics.
Related: CBDCs Are No Threat to Crypto — Binance CEO
In an interview with Cointelegraph last week, Richard Werner – development economist and professor at De Montfort University – described them as a “declaration of war.”
“In other words, the banking regulator suddenly says that we must compete against the banks now because the banks have no chance. You can’t compete against the regulator, he said.
Hayes, meanwhile, flagged Bitcoin as a safe haven still available to those already opposed to any kind of zero-cash economy — but not for long.
Buying BTC will become increasingly difficult, or perhaps outright impossible, once CBDCs are implemented.
“This window will not last forever. Capital controls are coming, and when all money is digital and certain transactions are not allowed, the ability to buy Bitcoin will quickly disappear,” he warned.
“If any of this doomsday porn resonates with you and you don’t own at least a very small % of your liquid net worth in Bitcoin, the best day to have bought Bitcoin was yesterday.”
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade involves risk, you should do your own research when making a decision.
