Bitcoin vs. USDC: The first showdown?

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Recently, BSV-driven wallet provider HandCash has been working on implementing USDC into their app. Users will be able to send and receive USDC in the same way as with BSV. Furthermore, swapping USDC for BSV and vice versa will be enabled.

Why is that interesting? Plenty of wallets offer such services in the digital asset space. BSV has been underrepresented in this situation so far. There is a unique selling point that BSV offers, which is utility. You can do things with BSV, unlike with most other digital assets.

Hard to choose between BSV and USDC if you have both ready in your wallet. Which one to save your money in? Which one to use to pay bills? HandCash has announced that there will be a feature that allows for the direct selling of BSV to a conventional bank account. Do you see where this is going? If you can directly “send” your BSV to your bank account and receive the fiat equivalent, is there any reason left to hold USDC long-term? Bitcoin is complex cash, but what about USDC?

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— Alex Agut (@apagut) December 16, 2022

USDC and later CBDC, both in competition with Bitcoin

I am bringing up all this because we are nearing a monetary climax with BSV and USDC in one wallet. We wrote about Bitcoin and CBDC a while ago. Sure, USDC is not a CBDC, but USDC is conceptually the closest we have to a CBDC at this time. What happens in HandCash with BSV vs. USDC foreshadows the upcoming battle between the ultimate private money and central bank digital currencies.

We are entering a world where people will have CBDC in their wallets—as well as BSV. Just the way it will be in HandCash soon when users have BSV and USDC “ready to shoot.” The question is: which money is better? The private BSV or the state CBDC? Then we take the question further: is there room for both in the long term?

Users have the choice as soon as BSV and CBDC appear in the same wallet. They would be able to either save in BSV or in CBDC. With BSV, they have a finite cash system, as the supply of BSV is limited. However, the CBDC will probably have unique selling points, too (such as being legal tender), even though it is safe to assume it will never be finite in the circulating amounts.

Swapping BSV for CBDC and the other way around would force central banks to deliver a CBDC that is worth holding. Else: swap, swap, swap.

Central banks will program their CBDC so that states can allow or decline certain payments. That is indeed a dystopia, but we seem to be heading into that kind of a world now. Let me assure you that governments could do the same with Bitcoin if they wanted to. There is no “technological escape” from political measures (see our article on the Canadian truckers’ protest and Bitcoin).

Bitcoin is not against central banks, but ensures freedom

I’ll tell you how to fix central banks with BSV, though. Show them that their CBDC can run easily, efficiently, and safely on the BSV blockchain. Let them implement their system on BSV. Once their CBDC is utilizing BSV, it is a checkmate. There is no turning around from BSV, as all other electronic cash systems are worse by default. BSV is a one-way street into the information economy. Bitcoin, in the original design, can “trap” central banks into a private money environment.

Even the Bank of International Settlements (BIS) suggests the coexistence of private money and state money. The BIS published an executive paper concerning CBDCs and stated:

The intent would be to allow public and robust private money to continue to coexist, including through convertibility and interoperability.

This is where we must pay attention. Because if there is no such coexistence, then we—the people—are in the trap. As the BIS says: convertibility and interoperability; In other words: swap, swap, swap.

All of this is not primarily about technology. It is about economic incentives and competition for money. Bitcoin is not against central banks but enables a circumcision of central banks.

I am ready for this showdown. I want to see people choosing between BSV and USDC in the HandCash wallet soon. Later, people shall decide between their BSV holdings and their CBDC holdings. Let us welcome the pressure central banks will undergo with having to compete against a fully functioning, global, scalable, private, secure, low-cost, electronic cash system.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Watch: Craig Wright: Bitcoin is not a cryptocurrency