“Three Kingdoms of the Monetary War”
The world always needs a choice in order to make the choices more legit.
By 2022, the world must choose what the future of the financial system should look like.
What will become an option?
And who will become the winner of this epic battle...?
I believe we will see fierce competition in the monetary system starting from 2022 onwards. This big battle I will call it
“Three Kingdoms of the Monetary War”.
It comprises 3 financial powerhouse. The former powerhouse, Fiat Currency, is trying to transform itself into a CBDC, clashing with a new pole. Cryptocurrency, which spearheaded Bitcoin as the center of the movement and private terminals that come. It is halfway between the “Stablecoins”.
As more and more people realize the essence of “money”, the role and impact of money in changing the economy. And increased society Innovative Bitcoins are being understood from a more accurate perspective.
People are talking about Bitcoin becoming a key engine that will drive a liberal market.
FOMO symptoms on the belief that the “meaning of money” is about to change. Causing many people in the world to turn to Cryptocurrency.
Even many financial institutions are making their way down this road,
with Paypal being the most watched company right now.
Cryptocurrencies are being used as a payment intermediary.
Instead of the role of storing value or investment-only like in the past, PayPal saw an opportunity and admitted in early 2022 that it was studying the possibility of owning a Stablecoin.
When a free financial world like Crypto has emerged, Price volatility is therefore inevitable. Because this is not a market to be controlled by anyone, it has no floor, no ceiling, no time to rest. Swing as much as Mr. Market wants.
As a result, some investors continue to feel the enormous price risk.
For this reason, a price-stabilizing cryptocurrency has emerged as another alternative, Stablecoin.
Stablecoin also feels the same price stability as fiat money, but a private company created it. They tied its value to the fiat currency, or any instrument associated with that currency. There is a mechanism behind the price stabilization. That helps ease the worries of many investors to dare to enter the cryptocurrency market.
They built Stablecoin for the versatility of cryptocurrencies.
Migrate Value Between Crypto and Fiat. Stablecoin is like making money that has already accepted the new world but still respects the old money because it’s still pegged by Fiat and easy to compare.
When you say that Crypto prices fluctuate a lot, but you too want to take advantage of this market. Finding something as an excuse to enter this market without salivating yourself would be an interesting option. PayPal’s Stablecoin will streamline Crypto switching to a payment gateway.
Paypal may have its own platform for users. It is a bridge between the world of Crypto and Fiat, the tier name of Paypal as a built-in online payment platform will create a competitive advantage for the company and the primary income is likely to come from.
There will be a huge number of “fees” for transactions on the blockchain that will occur in the future.
Paypal hopes to become next to be referred to as World Bank’s “Super App” (similar to China’s Alipay) with the ability to support payment, shopping, savings, investment and crypto-currency support all within the platform on one device.
We expect this service to result in significant growth for the company.
The private sector’s financial powerhouse is not just Paypal. There are also big companies in the FinTech world such as Stripe, Square and Affirm, as well as Tech Group with giants like Google, Amazon and Apple.
These players all want to dominate the online payment experience. There are also players who have entered the Crypto world before, such as USDT, USDC, and BUSD, among others. Competing amongst the private kingdoms (private groups that will use their own token or stablecoin) will be fierce from now on. But that wouldn’t be a good thing to compete with other external factions like Crypto and the CBDC.
I think in the end, for the smooth growth of the kingdom, Players in private kingdoms need to connect with each other on the same ecosystem that is flexible and high mobility, Transaction costs that must not be too harsh.
They needed to join forces so that their own group’s services were strong enough to compete with the rest of the kingdom in the future. Perhaps we will see stablecoin as a third power pole like this for a very long time.
On the other side.. The former powers, such as various financial institutions, are being shaken. The traditional banking system is going to be lost in the future if today doesn’t stay awake or try to stand up. There are few options for banking systems. Come out to break each other to death on one side. (Which results are pretty easy to guess) or will join the trend itself.
The FED, EDIC and OCC say that by 2022 we will see a series of legislation to set guidelines for participation in digital assets of bank organizations both in terms of security, facilitating crypto trading, crypto-collateralized lending, including issuing coins and stablecoin distribution.
Yes... various regulatory agencies worried about the chances of bank franchises collapsing. The most important pretexts for the entry into this war by the government’s powers are money laundering, illegal use of money and exploitation of minors, various forms of fraud.
Financial sovereignty, bitcoin frankly threatened the power to regulate monetary policy.
But states may look at this crisis as an opportunity.
- What if the central bank could send money into people’s pockets?
- What if I could see every movement of the financial transactions in the country?
- What if they could automatically charge taxes on all monetary transactions?
- What if the state could reduce the total transaction costs with blockchain?
etc.
Changing state paper money to a digital currency known as “CBDC” (Central Bank Digital Currency) is becoming a way to Counter-Crypto of the government side. It will heat in 2021 and will be released by more states this year.
Piloted by e-CNY or Digital Yuan, which has a regime that does not need to consult anyone. With the CBDC.. the central bank may provide its own financial services. Through the money bags of people who have to hold CBDC money, they may not even need an intermediary, like a commercial bank. Or if they exist, it will force them to transact on more transparency, reducing fraud and illegal activity.
Central banks can choose to reduce fees to deal with the monopoly behavior of various financial institutions or pumping people’s blood with credit card interest, etc.,
And they made most CBDCs to link with new systems. New transaction formats to connect with the business sector make money easy to spin and smoother. But it will affect commercial banks because the state and the central bank issues the CBDC.
And if we can open an account with a central bank if connected to a private application. And it can continue to work whether it is deposits or borrowing money. That would make the private sector or the public a lot less reliant on loans from commercial banks. We may see a large amount of deposits flowing out of commercial banks if the entire bank collapses.
They made CBDC goals for the state and for governance. The CBDC will be the country’s most advanced tool ever to regulate people’s behavior. It's used to increase or decrease certain permissions. Can even cut people. One can get out of the country’s financial system at all.
No other opportunity was more suitable than this moment. That the state will introduce the public to the CBDC. All governments have a legitimacy to issue a CBDC when their financial sovereignty from Crypto is threatened. I don’t need to sort out which countries are likely to issue a CBDC because I believe that everyone should have known through the news already.
When the war of the three financial powers is heating, users should understand all their options to cope with things that will happen in the future.
The emergence of Crypto, especially its role as Bitcoin’s new era, has made the 2nd and 3rd kingdoms appear.
These three kingdoms will have to compete for at least another generation.
Bitcoin has one of the most important qualities that the other two kingdoms cannot offer us.
That is.. Decentralized.
Whether they designed it with technology or how smart policy. But one thing that Stablecoins and CBDCs are inevitable is the centralization of power.
Trust and complete control over the private sector or what do we have to exchange for the central bank?
The answer is obvious if we try to study financial history..
We may have to agree to provide privacy to enable central banks to audit, record, analyze and tax every transaction. We may need to define the level of access to the financial system as required by the central bank. (Like China’s social credit score system) we may lose the “right” to our money.
CBDC has no way to become an open source and difficult for us. We can’t verify all transactions through the Block Explorer check.
And.. we must trust the government to protect the value of our money. (Which is exploding right now)
Fiat backed Stablecoin value and something (Pegged) as we know it is the dollar.
8 Million Times Inflation compared to Bitcoin over 13 Years
In the future, it will be easier to make stable coins that will be pegged to something. There may not be a need to compare USD anymore, which is enough for the private sector or ordinary people to try various stable applications and understand it better.
Coupled with being more accepted in the business sector, Stable will reduce the role of CBDC in the end.
CBDC seems to be better as they pegged it with local currency. But every currency is pressure to choose. (or forced) to use the dollar as a reserve fund well This means that every local currency, whether it’s paper, metal, or computer code, is also degraded to the dollar.
When CBDCs have taken place everywhere, some countries will continue to print their own money and America. And everyone already knows that if you still have reserve money for America, Our money, whether paper or digital, will depreciate..
Why do we have to go for CBDC?
At that point, it will still be indistinguishable for pegging the value between Stable-CBDC, but people will flee. When they realized that Stable that was pegged with that state money, it did not solve the inflation problem at all.
Or maintaining long-term value, More and more people will look towards crypto. These two funds (Stable & CBDC) will catalyze the growth of crypto in terms of value and understanding.
People will move into a new financial system.
All are sharing the personal views of the author. There is no guarantee that in the future it will come out like this.
The 3 Kingdoms of the Monetary World is fun and addictive. I related the outcome of this battle to the future destiny of all of us..
Please follow the next episode.
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I wrote this article and posted on the CryptoNize page on 01/16/2022.
Thank you all 🙏 for following CryptoNize.
