The Treasury Borrowing Advisory Committee has published a new presentation calling for central bank digital currencies (CBDCs) to replace stablecoins. Pointing to a history of so-called "wildcat banking," the committee argued that just as the government monopolized the issuance of paper currency by establishing the Federal Reserve, the government should monopolize digital currency by establishing a CBDC: In a similar manner to how privately-issued "wildcat" currencies were replaced by government-backed central currencies in the late-1800s, Central Bank Digital Currencies (CBDC) will likely need to replace stablecoins as the primary form of digital currency underpinning tokenized transactions. This statement has several problems, but let's consider just three.
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- The Treasury Borrowing Advisory Committee has published a new 1
- In a similar manner to how privately-issued wildcat currencies were 1
- Central Bank Digital Currencies CBDC will likely need to replace 1
- This statement has several problems but letʼs consider just three. 1
- The first problem is the implication that the history of banking in the United 1
- States was a history of wildcat banking. The idea that banks were 1
- While it is difficult to put an exact number on the issue George Selgin 1
- Alternatives estimates that the total number of wildcats was no higher 1
- Second while many people like to suggest wildcats were the source of 2
- American free banks ended up going bust. 2
- Third it does not follow that because the government took over one area 2
- Competitors in the private sector must strive to offer a better product. The 2
- With these problems in mind and many still on the table itʼs unfortunate 2
- Exchange Commissioner Gary Gensler then-Federal Reserve Vice Chair 2
- Lael Brainard European Central Bank President Christine Lagarde 2
- European Central Bank board member Fabio Panetta and countless others 2
- The real lesson from the wildcat story is that policymakers must be held 2
