{"id":15622,"date":"2021-07-16T12:00:00","date_gmt":"2021-07-16T12:00:00","guid":{"rendered":"http:\/\/ci02883629d0002483"},"modified":"2025-01-29T15:08:46","modified_gmt":"2025-01-29T15:08:46","slug":"a-digital-dollar-doesnt-fix-this","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/markets\/a-digital-dollar-doesnt-fix-this","title":{"rendered":"A \u201cDigital Dollar\u201d Doesn\u2019t Fix This"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div><p><em>The below is an excerpt from a recent edition of the Deep Dive, <\/em>Bitcoin Magazine<em>&#8216;s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, <a href=\"https:\/\/members.bitcoinmagazine.com\/\">subscribe now<\/a>.<\/em><\/p>\n<p>During a <a href=\"http:\/\/testimony\">testimony<\/a> yesterday afternoon in front of the U.S. Financial Services Committee, Federal Reserve Chairman Jerome Powell commented on the impending central bank digital currency (CBDC)&nbsp;to be launched by the Fed, and how in his mind it would compete with other \u201ccryptocurrencies\u201d and \u201cstablecoins.\u201d<\/p>\n<p>&#8220;You wouldn&#8217;t need stablecoins, you wouldn&#8217;t need cryptocurrencies, if you had a digital U.S. currency,&#8221; he said.<\/p>\n<p>The fact of the matter is that the difference between a central bank issued currency and bitcoin in particular is not a technical one (albeit there is, or rather will be, many different technical aspects), but rather a one of governance. <\/p>\n<p>A \u201cdigital dollar&#8221; is not all that different from a so-called \u201canalog\u201d dollar today, except the fact that it will probably include less privacy assurances, more censorship and more direct control over supply and monetary issuance. <\/p>\n<p>Bitcoin is valuable because no one can change or manipulate the hard cap of 21,000,000 or the supply issuance. Bitcoin as a monetary asset is uncensorable, unseizable and unable to be manipulated. Anybody can run a node and audit the entire monetary supply with a cheap computer. <\/p>\n<p>Contrast this with what the digital dollar would come with: <\/p>\n<ul>\n<li>Unlimited potential supply <\/li>\n<li>One full node <\/li>\n<li>Token airdrops to politically-connected insiders <\/li>\n<\/ul>\n<p>In \u201ccrypto&#8221; that is what is known as a \u201csh*tcoin.\u201d The fact of the matter is that the U.S. dollar is a far inferior monetary asset than bitcoin, and pricing bitcoin in other denominations shows exactly this.<\/p>\n<p>Below is the chart of BTC\/USD over the course of the last five years.&nbsp;<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2025\/01\/1_pasted-image-0-4.png\" title=\"\"><\/figure>\n<p>But what if instead of pricing bitcoin in dollars, you use the M2 money supply as a denomination? The problem with pricing any asset in dollars over the long run is that the actual value of a dollar is malleable due to the perpetual supply inflation.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2025\/01\/1_pasted-image-0-5.png\" title=\"\"><\/figure>\n<p>When the assumption that the dollar as a unit of measurement is fixed in value over time, the chart begins to tell a different story. Adjusted for M2 Money Stock, the price of bitcoin has already retested the 2017 all-time high. It is important to remember that not only is bitcoin accruing value during its monetization phase, but simultaneously the value is debasing in perpetuity.&nbsp;<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2025\/01\/screen-shot-2021-06-22-at-101721-am.png\" title=\"\"><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Federal Reserve Chair Jerome Powell thinks a central bank digital currency would obsolete bitcoin. He&#8217;s way off.<\/p>\n","protected":false},"author":2539,"featured_media":7989,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[85,1037,207,206],"class_list":{"0":"post-15622","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-bitcoin-magazine-pro","9":"tag-cbdc","10":"tag-federal-reserve","11":"tag-jerome-powell"},"author_data":{"id":2539,"name":"Dylan Leclair","nicename":"dylan-leclair","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2025\/01\/dylanheadshot-edited-96x96.png"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/jerome-powell-federal-reserve.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/15622","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2539"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=15622"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/15622\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/7989"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=15622"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=15622"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=15622"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}