The following by Peter Zeihan on August 31, 2023:
“With all the buzz around central banks starting digital currencies and one of these entities controlling all transactions, I think it’s about time I burst everyone’s bubble…
Fintech has blown up because it slims down the traditional money transfer process and removes some of the associated fees, meaning you can transfer money faster and cheaper. However, the Federal Reserve will wipe out most fintech startups within the next five years with their service – FedNow.
FedNow allows for the instantaneous clearing of funds when transferred using the Fed as the intermediary. Oh, and it’s functionally free. Put the hype for this or that financial product – whether crypto or otherwise – to the side for a minute and dwell on how said systems might compete with free, immediate, and from the source. Queue the gnashing of teeth.
What we’re seeing in China is different from this. They’ve married digital currency to social currency scores, making Orwell look alright. This could never happen in the US, but if China continues down this road, its entire financial space will be under the government’s thumb. Any dynamism left in the Chinese economy will be stamped out fairly quickly if this continues.”
Bill,
I’m not familiar with that gentleman, and haven’t read/heard his content. I’m struggling to make sense of the clip you provided. I do agree that FedNow is an important project that will have lots of implications, but I fail to see how that has anything to do with bitcoin. Bitcoin is an asset, like stocks, gold and real estate. All of these are stores of value; people buy they because they believe that they will retain (and increase in) value. The Fed prints money, like cash. Cash and stores of value peacefully coexist; in fact, they support each other.
Many people continue to believe that bitcoin’s sole purpose is a replacement for money. It’s not. It’s a store of value, alongside all other stores of value. Saying bitcoin is dead because of FedNow suggests a basic misunderstanding of crypto.
Ric