There’s a lot of talk these days about digital assets and digital money. Bitcoin and Cryptocurrency are all the rage. Have you heard about the latest development? Central Banks all over the world are either implementing or will be developing Central Bank Digital Currency (CBDC). You might be wondering what is a CBDC?
Let’s first make sure we understand what Bitcoin and Cryptocurrency is. Bitcoin is a digital asset. You could make the argument that it’s a digital asset like gold or oil. The IRS classifies Bitcoin as property. Why is it property? Bitcoin is unique because it is decentralized unlike fiat currency.
Bitcoin can be transferred on the peer-to-peer bitcoin network. It can be cashed created, distributed, traded, and stored using the decentralized ledger system known as blockchain. This is very important to understand because it shows it has no central control.
All other Cryptocurrencies were all created after Bitcoin. They are all overseen by a central group or central organization. This differs from Bitcoin as Bitcoin is completely decentralized with no central control. Most cryptocurrencies are in my opinion just unregulated forms of securities being traded. This is why I only invest in Bitcoin, because Bitcoin is property and decentralized. Cryptocurrencies like fiat money can be easily manipulated by simply creating more coins. Bitcoin can only have 21 million coins.
Now what are CBDC’s? The name really explains it all. CBDC is Central Bank Digital Currency. It’s essentially currency issued by Central Banks. Here in the United States are Central Bank is called the Federal Reserve (Fed). The Fed will be able to issue digital currency directly.
What does this mean? It’s essentially programmable money. You might be asking what is it programmed to do? That’s a good question.
CBDC’s could be issued and disappear if you haven’t spent it within a designated time period. CBDC’s could favor one sector over another. CBDC’s could only be spent in certain approved places or at certain approved organizations/businesses.
The programmable money of CBDC’s could be programmed to do whatever the Central Bank deems appropriate. This is a far cry from Bitcoin, which is decentralized and not controlled by any central group. It’s even different from cryptocurrencies as they don’t desire to program use. They simply benefit from purchase like any other security.
The only real option if you want to be part of an emerging digital economy is to consider Bitcoin. Everything else could be detrimental to your financial well-being and pursuit of Financial Freedom. It’s time to get prepared. We are here to help. Contact us to learn more on how we can help.
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