Will Satoshi be looked back on historically not only as the genius creator of Bitcoin… but also as the person whose work gave rise to CBDCs? A [Serious] discussion.

Satoshi’s goal with the launch of Bitcoin was to create an autonomous, decentralized financial system that allowed users control, rather than large banks and governments. In many ways he succeeded, with the exception that Bitcoin is used less as a peer-to-peer payment system, and more as a store of value. Bitcoin paved the way for a still evolving massive crypto sector, including innumerable alt coins and tokens, and gave rise to defi. However, it also may have paved the way for a far less ideal system to arise: CBDCs, or central bank digital currencies, that enable governments to enter and profit from the world started by Satoshi.

CBDCs are a digital currency that, instead of being decentralized and granting control to users, are controlled by a central player, usually a government. This should raise alarm bells among any crypto enthusiasts as the exact opposite of the vision of Satoshi. And they can potentially lead to dystopian outcomes - central issuers of the CBDC have the power to create their own rules, such as ability to inflate at will, freeze and clawback transactions easily, as well as never before seen tracking capabilities for financial transactions that an individual may make using the digital currency. Coupled with ‘social credit’ systems (such as that already in existence in China), governments can both track an individual’s social and lifestyle choices, as well as track and even freeze their finances and use of societal utilities such as internet and mass transit. And it’s appealing for governments to couple these digital financial records with AI, for easier sorting and pattern identifications. This does not bode well for critics of a government that happens to have a CBDC - whether in an authoritarian country or otherwise - let alone groups that the government may wish to disenfranchise based on race, beliefs, orientations etc.

According to the Atlantic Council CBDC tracker, 130 countries (out of 195 in the world) are exploring a CBDC, with 19 of the G20 countries in the advanced stages of development. 11 countries have fully launched a CBDC, notably with China’s digital yuan reaching 260 million people. The US continues to make moves to develop a CBDC, although recently, congressional leaders have put forth a bill to limit some of the powers that it may contain (via the House Financial Services Committee). However, in the US, most of the current governmental focus is on punishing crypto companies, resulting in a shrinking sector that may be primed for the government to insert its own digital currency. The march towards global CBDCs has absolutely begun, and to think that it won’t happen is naive - at this point, it’s better to focus on how to manage the privacy and governmental overreach concerns that come with it.

With all this said, it seems as though none of the CBDCs of today would exist, nor have even been developed, without the original and groundbreaking work of Satoshi on Bitcoin. Yes, there were digital currency attempts before Bitcoin (eCash, B-money, etc), but none of them reached large success or global dominence. Because Bitcoin became the global currency that it is today, governments began to pay attention and worked to find ways to make money off of digital currencies of their own. I feel that Satoshi, if alive and active today, would decry CBDCs. If he had known that they would come to exist only after and in response to his own work, would he have scrapped Bitcoin before it even launched? Does the existence of CBDCs with absolute control over user finances invalidate the financial victories fought for by Satoshi as he developed Bitcoin? Or would they have been created regardless of Bitcoin’s launch? In the end, Satoshi’s initial development to make decentralized cryptocurrency may be looked back on as the start of the end of financial privacy, ushering in an era of tightened centralized control.

TL;DR: governments worldwide are creating CBDCs that threaten to take away user’s privacy and move towards a dystopian future. They may have never started without the success of Satoshi’s Bitcoin’s decentralized model first.