Author name: @nobumei (https://twitter.com/nobu_mei)
<aside> 💡 This page describes CBDC, a Stablecoin issued by the government.
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In the previous sections, we have given an overview of the Stablecoin market and the different types of Stablecoin. In this section, we will discuss CBDC, a digital currency issued by the state.
CBDC is a digital currency issued by a central bank.
<aside> 💡 CBDC = Central Bank Digital Currency.
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When one hears the term "digital currency," the first thing that comes to mind is electronic money such as Suica and nanaco. However, electronic money is not interoperable with other services because companies centrally manage payment applications.
For example, you cannot charge the balance of a few hundred yen left on your Suica to nanaco. It is currently "common practice" that funds cannot be transferred to each other even though they are the same Japanese yen and your assets, but this is strange.
Cryptocurrencies, such as Bitcoin, were created to solve the inconvenience of this centrally controlled digital currency. Since cryptocurrencies use a common data layer of the blockchain, there is no longer a need to label and manage currencies for each payment application, and currencies on Web 3.0 applications have regained interoperability.
Cryptocurrencies are now freely transferable between apps, but the challenge is that they are too volatile. It is not sufficient for use as payment because it does not have the function of a currency, which is to store value.
Stablecoin appeared between electronic money and cryptocurrencies, and we have explained in the previous section that Stablecoin is also shifting from centralized to decentralized and unsecured Stablecoin. If Stablecoin continues to evolve and become more popular, everything will come full circle, but the challenge for Stablecoin is that it is not popular.
It would be tempting to simply think that we should then promote Stablecoin, but the act of promoting Stablecoin is in direct conflict with the interests of the state.
For example, Meta (formerly Facebook) launched an ambitious project with a consortium of Fintech giants to issue a Stablecoin called Libra, which was crushed by the U.S. government.
With the advent of Bitcoin, anyone can issue digital currency, but until now the right to issue currency has been a sanctuary protected for years as the exclusive right of the state. This case of Meta, a single U.S. company, attempting to transcend the state is like Icarus getting too close to the sun. The reality is that in the current centralized economic system, no company can exist above the U.S. or larger than the U.S.
As explained in Chapter 2, GAFA has become too large, and regulations are being considered to amend the U.S. antitrust laws to decentralize corporate influence.
Reference: 02.1 The Need for Web 3.0 from the World
From the country's point of view, they want to take advantage of the convenient characteristics of Stablecoin, but want to protect their own national sovereign right to issue currency. In this situation, CBDC is expected to be implemented. And the global advance in the CBDC area is China's digital RMB.
Meta's Libra was crushed by the U.S. because it is a single company, but China is a nation and any attempt to interfere with it will result in war. China is now in full-scale implementation of CBDC in areas that the U.S. cannot even touch.