Yanis Varoufakios, the former prime minister of Greece, expressed his views on central bank digital currency (CBDC) in the US. He said the current banking system is slightly anxious about the Central Bank Digital Currency (CBDC). In an op-ed for Project Syndicate, he compares the worries about this new digital entity with smoking restrictions.
He pointed to the period when tobacco manufacturing companies used the libertarian outage to sell their products. This time, he says, the same notion is felt by the bankers, who are wary about the intervention of Fed accounts. According to him, CBDC threatens how they have been dealing with money.
They are also worried about discontinuing moneymaking services because of the arrival of crypto assets. Services that generate revenue by processing payments and holding deposits will no longer be required. They won’t be able to charge customers a hefty amount of money from customers anymore.
CBDT, with its decentralized framework, will significantly help fight deflation and strengthen tax collection. However, Varoufakis said that CBDT does not bring centralized banking to a halt as it is believed to. He believes that the former can potentially end the monopoly the latter wields. With the infusion of crypto, the Fed accounts could become more anonymous. It will also facilitate the detection of money laundering and tax evasion practices. CBDT, with its decentralized framework, will significantly help fight deflation and strengthen tax collection.
It is a nostrum for all the problems that we have been facing with our existing banking system.