Fortunately, the Hive Backed Dollar (HBD) offers a solution.
How come?
What exactly is the supply of HBD and when we know that HBD is supposed to be a stablecoin, then with such a lower supply how can it join the international economic order.(I do not question the usefulness and/or HBD as viable alternative, but there are so many things to come to the fore before we can think about it, but yes the prospects of HBD is bright).
Second, HBD is supposed to follow USD value by definition. So even if you offer 20% APR you do not know by how much USD will depreciate to counterbalance that depreciation.
Let's hypothesize if the USD depreciates by 50%, can this 20% APR counterbalance that depreciation?
But, at an individual level, I would always tell people to bank upon HBD as much as they can instead of saving it in a bank account(4% APR) or a fixed deposit(8% APR).
Basically, it is the idea that the US Dollar, and denominated assets, is going to suck in all the capital from around the world. The events taking place globally are the straw that will then reach into other economies and pull out the money.
That's exactly the international economic order is designed for. No matter how much Fed prints, USD will not depreciate or lose value wrt to other currencies particularly the developing countries. That means Fed prints it, inflates it and the cost is borne by the other countries that are hooked upon to the international economic order.
This CBDC is just a hogwash to appear as an adoption to the new technologies and the evolving concepts of crypto, but the reality is they fear the sovereign power of Blockchain and crypto, that's they are nervous.
The Fed doesnt print US Dollars.
In fractional reserve banking, only commercail banks can create the currency through loans. Central Bank reserves (liabilities) are not legal tender. Hence, they are financial products for depository institutions that are pegged to the currency, in this case the USD. They are not broad economy money.
They also cannot be converted to "digital dollars". The banks could swap them out for banknotes but that would means getting the notes, storing them, and distributing to the population. At the same time, they are useless to banks because no settlement takes place in physical currency.
Hence the understanding of the international economic order is skewed wrongly since this fundamental concept is overlooked.
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Great details.
Thank you for schooling me. Engagement really widens the perspective and sometimes strengthens the fundamental concept by cutting across loosely defined things. Thank you again.
I agree. That is the power of Leofinance. We share what knowledge we have.
When it comes to money, sadly, there is a lot of BS out there, especially on Twitter and the like. Many have a worldview that is based upon fallacy simply because people repeat the same untruth over and over.
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