Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

Treasury Advisory Committee Calls for CBDCs to Replace Stablecoins

by November 4, 2024
November 4, 2024
Treasury Advisory Committee Calls for CBDCs to Replace Stablecoins

Nicholas Anthony

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.

The first problem is the implication that the history of banking in the United States was a history of wildcat banking. The idea that banks were defrauding customers and disappearing with their money is certainly a concerning one. And it did happen at times. However, such wildcats were far from the norm. 

While it is difficult to put an exact number on the issue, George Selgin, director emeritus of the Cato Institute’s Center for Monetary and Financial Alternatives, estimates that the total number of wildcats was “no higher than 173.” In contrast, he estimates there were around 2,450 banks in total during this time. 

Second, while many people like to suggest wildcats were the source of failures during this period, the bigger problem was that the laws governing banks had undermined financial stability. Again, as Selgin explains, “free banking” laws during this period,

forced banks to invest in … very risky securities—and especially in risky state government bonds—while the rule against branching limited their ability to diversify around this risk…. It was owing to these restrictive components of U.S.-style free banking that scads of American free banks ended up going bust.

Third, it does not follow that because the government took over one area of money, it should take over another. What the experience in the 1800s showed was that the government has a unique power over others. Competitors in the private sector must strive to offer a better product. The government, however, can undermine others through laws and regulations that make it nearly impossible for the private sector to function. For a modern example, one need only look to the government’s hostility towards stablecoins and other cryptocurrencies.

With these problems in mind (and many still on the table), it’s unfortunate that the Treasury Borrowing Advisory Committee found the wildcat argument persuasive. Yet the committee is not alone. This argument has been used by the likes of Senator Elizabeth Warren (D‑MA), Securities and Exchange Commissioner Gary Gensler, then-Federal Reserve Vice Chair Lael Brainard, European Central Bank President Christine Lagarde, European Central Bank board member Fabio Panetta, and countless others in the pursuit of expanding the state.

The real lesson from the “wildcat story” is that policymakers must be held accountable. They should not be allowed to undermine an entire industry and they should not be allowed to swoop in to monopolize it when it eventually fails. That was true in the past and it’s true today. The difference comes down to whether Americans let it happen again. 

0
FacebookTwitterGoogle +Pinterest
previous post
Equities Hang on to Weaker “Go” Trend as Communications Offers a Helping Hand
next post
Deregulation, Not Rent Control, Is the Right Response to the Housing Crisis

You may also like

Crypto Clarity Is Up to Congress: Taking Stock...

July 19, 2023

Expensing Could Help Manufacturing’s Productivity Problem

June 12, 2024

Questioning the Housing Crisis: Introduction to a Series

December 6, 2024

Congress Should Reverse its $196 Billion Social Security...

February 10, 2025

Concerned About Learning Loss? Let Funding Follow Students

December 11, 2023

UAW: Trump/Musk Exchange on Strikes Violated Federal Law

August 14, 2024

New Rule Makes Pregnant Workers Fairness Act More...

August 30, 2023

The Cassidy Carbon Tax Is Even Worse Than...

November 13, 2023

Powell’s CBDC Puzzle: Deciphering Where the Fed Stands

March 27, 2024

Nearly a Third of Gen Z Favors the Government Installing...

June 1, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Disabling Trump’s “Tariff Button”

      June 5, 2025
    • ‘Sick puppy’ Tim Walz should never have been on Dems’ 2024 ticket, Trump says

      June 5, 2025
    • Federal judge orders Trump to restore funding to Clinton-era agency gutted by DOGE

      June 5, 2025
    • Musk says Trump would have lost 2024 election without him as ‘Big Beautiful Bill’ feud continues

      June 5, 2025
    • Ex-Biden adviser calls Jean-Pierre ‘kinda dumb,’ deletes tweet, says she’s not a ‘genius-level Black woman’

      June 5, 2025
    • ‘Coming for us’: Expert sounds alarm on CCP’s mission to ‘kill Americans’ after FBI makes shocking arrests

      June 5, 2025

    Categories

    • Business (8,148)
    • Investing (2,010)
    • Politics (15,535)
    • Stocks (3,128)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved