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Fed vs ECB - FED 33

In this episode of Fed Watch, Christian and Ansel get into specifics on the plans of the ECB in regard to their digital euro. We are told in the media that central banks are very much going to be releasing a Central Bank Digital Currency (CBDC) and it will have damaging effects. However, on this podcast we get our information directly from the source. First, we must answer is a digital euro likely and why, which is what we do in this episode. In later episodes we will cover the side-effects of CBDCs if there are any.

On November 30, 2020, the President of the ECB, Christine Lagarde released a blog post detailing the ECB\\u2019s current thoughts on money and how a digital euro, or CBDC, fits into their plans. I talked about this on my recent episode of Bitcoin & Markets, and Christian wanted to explore the idea of the worries of the ECB specifically, because their thinking seems to be heavily worried about monetary sovereignty.

That term, \\u201cmonetary sovereignty\\u201d came up several times is Lagarde\\u2019s blog post in context to why they feel pursuing a CBDC is necessary. This contrasts Federal Reserve Chairman Jerome Powell\\u2019s comments which focus on patience and conservatism instead of worries about monetary sovereignty. Why is this?

Most likely this is because their already are digital stablecoins, similar to how a digital euro would function, in the market. There is a big problem in the free market offerings of these stablecoins, from the ECB vantage point; they are 99% US dollar based. If the ECB were not to act, the market might completely bypass use of the euro in favor of a digital dollar. That is a scary possibility for the ECB, so they must provide that option for the market, and maybe even require its use in some cases to maintain the euro\\u2019s global position.

This episode also discusses the recent MicroStrategy \\u201cbonds for bitcoin\\u201d proposal. Listen to find out if this is the first signs of the long awaited \\u201cspeculative attack\\u201d on fiat by bitcoin, and what to watch out for as this move receives the keen attention of regulators.

We also discuss jurisdictional arbitrage at length. How does bitcoin enable jurisdictional arbitrage even within the regions, like between US States or European countries? Of course, as good bitcoiners, this leads us to a cosmic back and forth about citadel locations, and the best place to live in the future from a freedom and economic standpoint.\\xa0

Fantastic episode, heavy on central bank commentary. Do not forget to subscribe to Fed Watch\\u2019s new RSS feed, so you don\\u2019t miss any of our great guest insights in the future.

Ansel Lindner

Economist, author, investor, and bitcoin specialist. Find more from Ansel at BitcoinDictionary.cc, BitcoinAndMarkets.com, and BTCM.co.