Last week, the White House released the “Executive Order on Ensuring Responsible Development of Digital Assets,” making the case for a whole-of-government “strategy to protect consumers, financial stability, national security, and address climate risks” through the exploration of a “US Central Bank Digital Currency (CBDC),” and prioritize U.S. participation in multi-country experimentation, ensuring U.S. leadership internationally to promote CBDC development that is consistent with U.S. priorities and democratic values.
From the zeitgeist of this year’s Super Bowl ads to the formality of the White House briefing room, the American public is left wondering if they are missing out on the next big thing or if the White House is making run-of-the-mill economic announcements. Every day people are asking what are cryptocurrencies, NFTs and Web 3 anyway. Is it all hype or the real deal?
There is no doubt that these blockchain-centric buzzwords have infiltrated our everyday conversations. To understand if they are worth the fanfare, we first must examine one important aspect of the equation that brought us to this moment: the movement of currency itself. While we’ve grown accustomed to the longstanding, siloed financial infrastructures that have remained unchanged for most of our lives, there is a growing consensus that the outdated systems have not kept up with the pace of our increasingly interconnected global society.
From the earliest days of the internet through today, the systems to transport money have perpetuated barriers to digital financial access and full participation in one’s economy. They have never worked in congruence with the fluidity of the internet, and around the world 30 percent of people, including millions of Americans, still have limited access to banking and financial instruments. This holds true even as information, economic opportunities, content and goods flow seamlessly through the web.
To add kindling to the fire that no one needed or asked for, the COVID pandemic ushered in a new set of obstacles, inflaming economic inequality around the world to its highest point since the Great Depression. A bright light for some in the dumpster fire that is the pandemic has been the growth of blockchains, cryptocurrency and the like. It’s an industry that has grown to more than $2 trillion in just 13 years. Although most people thought it was a Ponzi scheme of sorts in its infancy, it is actually proving to be a financial revolution, surprising even the crypto bros who have amassed more wealth than the world has ever seen.
The emergence of decentralized technology is being seen as a beacon of hope to those wishing to level a playing field previously available only to a select few. At the same time, institutions and governments worldwide are taking an assessment of their exclusionary practices and attempting to right the ship. This is a rare convergence, akin to a once-in-a-lifetime eclipse, and the decisions made today will affect the global economy for generations to come.
A chance to democratize money the way the internet democratized information is before us, and we can’t let this opportunity slip through our fingers. We have to ensure the next phase of financial systems is built with an inclusive approach that brings many voices, talents, experiences and concerns to the discussion, because who knows when we’ll have the conversation again.
We have to strike while the iron is hot to ease the burden of cross-border payments and make true interoperability a reality, and we have to do it now.
