Disclosure: The opinions and opinions expressed here belong to the authors solely and do not represent the views or opinions of the crypto.news editorial.
The ban on digital assets makes just as logical as regulations on gravity. In 2017, the market took the news that China had banned Bitcoin (BTC) and that it would quickly recover with the realization of the absurdity of the concept?
But Bitcoin cannot be said about all intents and purposes, but also about the form of central bank digital currency, the currency of countries issued and regulated by central banks. In fact, it's one of their core properties. Otherwise, the government would not be able to place their citizens in naughty chairs by banning the right to buy groceries.
To be fair, most governments are not as heavy as China, due to their infamous scoring of social credit and surveillance of ramp essays. Instead, they are trying to develop digital currency for boring bureaucratic purposes, such as greater management efficiency and economic data collection.
Still, it's no coincidence that China is one of the biggest supporters of the CBDC and competes for its own implementation. So, it's not surprising that after President Trump laid the vanmer, the US should instinctively reverse all China's positions, should cancel its own digital dollar.
There is a beautiful yin and positive that bans Bitcoin in China and the US bans CBDC. The self-over-hole cycle has been completed. Trump's decision, like many people emulating his “first film and question later” government, is somewhat reactionary. But sometimes, filming first is the smartest thing you can do, and in this case Trump hit the target.
The American digital dollar, like all other Western countries, deserves to be shot down. Not because the concept is wrong, but because the implementation is solid. If billions of citizens have their data and financial assets listed in a global database, they will need far better privacy protection than current proposals offer.
The first Domino Falls
There is all sorts of irony wrapped around Trump's decision to ban digital dollars. Like a willingness to overlook the strategic Bitcoin reserve, we support $Trump's Memecoin while eschewing digital currency in potential real-world use cases. But even his most vocal critics spoke little about the mission.
The US was by no means the most solid advocate for digital currency, and many countries were far closer to launching their own efforts, but the idea was very high on the table until Trump pulled the fabric. did. When he became the first president to completely ban the CBDC, he flipped over Dominoes that could follow other countries, and the reason he was quoted resonates with people – Privacy.
In Europe, particularly, other Western countries want to maintain the impression that they are no one's masters, but the unpleasant truth is that US decisions make a strong pull to EU policies. Therefore, America's own CBDC reduction in CBDC inevitably weakens the EU's digital euro case, prompting a quick scrutiny of quick privacy protections. If the EU wants to get its own CBDC on the line, it must first return to the drawing.
There is no privacy or meaning
This is not strictly true, despite the fact that the digital euro is described as “as private as cash.” The possibility that governments, NGOs and other shadow organisations may gain unfair insight into citizen spending habits, and that censorship or client censorship or “cancellation” is very realistic.
That does not suggest that digital euro supporters are inevitably acting out of maliciousness. Blockchain evolves rapidly, but the wheels of policy making are slower. So, by the time digital currency pilots become green light, the underlying technology is already exhausted. As anyone directly involved in Web3 tells you, there are far better ways to implement on-chain privacy while maintaining compliance. This is a way to place all citizen privacy in a large database and not involve broadcasting it all around the world and seeing it. .
From ZK proofs to fully homomorphic encryption, privacy standards have become more robust and feature-rich in recent years, without risking exposure to centralized entities or potential malicious actors. It allows for subtle disclosure of data. Importantly, on-chain encryption standards are also much lighter, allowing for more efficient calculations.
Certainly, ZK and FHE are the ideal types of technology to drive the outcomes the EU wants to achieve with the digital euro. More intensive checks.
The good news is that it's not too late to improve this. The digital euro is still in its early stages and its final implementation is still resolved. There's time to get this right. If there's one thing I've learned from the Trump administration's whirlwind, it's that you can achieve a lot in a month. There's no need to move quickly and break things.
But, undoubtedly, the EU must move and show that its own digital currency is all that the proposed digital yuan and the world's dollars are not: it is safe. Private. Strong. Otherwise, you risk being cancelled, just like US CBDCs.
