The world of [cryptocurrency](https://leofinance.io/@leoglossary/cryptocurrency)  is taking on the banking industry.  At the most basic level, a digital [wallet](https://leofinance.io/@leoglossary/leoglossary-wallet) can handle a large portion of what most people utilize a bank for.  It allows individuals to send, store, and receive [money](https://leofinance.io/@leoglossary/leoglossary-money).

That said, [banks](https://leofinance.io/@leoglossary/leoglossary-bank) and cryptocurrency might find themselves on the same side of this battle.  When it comes to a digital wallet, there is no difference as to where the [asset](https://leofinance.io/@leoglossary/leoglossary-asset) came from.  Hence, it could house something like [ERC-20](https://leofinance.io/@leoglossary/leoglossary-erc-20) [tokens](https://leofinance.io/@leoglossary/leoglossary-token) on Ethereum.  At the same time, it could apply to a Central Bank Digital Currency (CBDC).

It is the latter that could pose a threat to both industries.

Battles can make strange bedfellows.  Here is a classic example where the enemy of my enemy could be a friend.

This is what could pose an interesting future as the situation ramps up.

![image.png](https://images.hive.blog/DQmPAg8zwFWwMXkZX6Z2rMjzu1xfY6eQuYPKTb92XMUfozd/image.png)
<center>[Source](https://cdn.britannica.com/38/137338-050-CFD40563/First-Bank-of-the-United-States-part.jpg) </center>

### Eliminating Wholesale Banking

We now have a system where the banking industry is the [intermediary](https://leofinance.io/@leoglossary/leoglossary-intermediaries-financial) (gatekeeper) of the entire monetary system.  It is the commercial banks that engage with the [economy](https://leofinance.io/@leoglossary/leoglossary-economy), hence individuals and businesses.  Central banks, in the advanced economies, deal only with the banks.  They do not directly engage with the public.

A digital [currency](https://leofinance.io/@leoglossary/leoglossary-currency) would eliminate this barrier.  It would provide direct connection between the central bank and user [accounts](https://leofinance.io/@leoglossary/leoglossary-account).  No longer would a bank be necessary.

This might sound like a benefit to some.  However, sometimes the devil you don't know is worse.

Under this scenario, [governments](https://leofinance.io/@leoglossary/leoglossary-government) would assume far greater control.  Even though many Central Banks are "independent", it is not difficult to see the power that governments can hold over them.  In the United States, [the Fed](https://leofinance.io/@leoglossary/leoglossary-federal-reserve-bank-the-fed) [chair](https://leofinance.io/@leoglossary/leoglossary-list-of-fed-chairs) is nominated by the President and approved by Congress.  It is also that body which adds the mandates the bank operates under.

With a retail [CBDC](https://leofinance.io/@leoglossary/leoglossary-central-bank-digital-currency-cbdc), not only is wholesale banking disrupted (on the path to eliminated), the politicians and bureaucrats in government will have direct say of what people can and cannot do.  This is a slope most should be concerned about.

Of course, since people put their entire lives online without fear, privacy and sovereignty is not a thought for most.  This is why it is up to both these industries to step up.

### Pure Evil

[Arthur Hayes of BItMex wrote a blog post](https://blog.bitmex.com/pureevil/) outlining how CBDCs are "pure evil".  This is a sentiment that most who understand what is taking place can agree with.

According to him, wholesale CBDCs are a given; they will be implemented.  This is still not the end of the world since they will operate at the interbank level.  However, what is the likelihood of things advancing into the retail sector?

Here is where the danger lies.  We know politicians are drooling to get their hands on the [money supply](https://leofinance.io/@leoglossary/leoglossary-money-supply).  They are using "inflation" as the reason.  Of course, the general public's lack of understanding (along with most in crypto) of how this came about is feeding into the political scheme.  Since most believe the Fed prints [USD](https://leofinance.io/@leoglossary/leoglossary-usd), they buy that it created too much money.  Politicians naturally hold the solution.  All this overlooks the fact that it was the political lockdowns that caused this in the first place.  

Alas, the gullible public falls victim to what the mainstream media tells them.

CBDCs will be implemented while the masses are paying attention to the Kardashians or whatever they do today. Few are taking to time to truly learn what is going on.

Handouts are a powerful tool of the political class.  They will use the idea of efficiently paying people in times of need as the reason for the CBDC.  Keep in mind this is programable money, something that is very powerful.

At the end of the day, does anyone trust politicians?

### The Powerful Bankers

There is little dispute about how powerful the bankers are.  When it comes to the top dog in [business](https://leofinance.io/@leoglossary/leoglossary-business), the banks are the leader.  They are now coming under attack by a force that might be bigger than them.

We know that banks can take on most other businesses and squash them.  They proved this over the decades.  That said, they are under the control, to a large degree, of governments.  This is especially true of [depository institutions](https://leofinance.io/@leoglossary/leoglossary-depository-institution).  They tend to operate under some type of government charter.  

Hence, we can expect the bankers to not sit around and let governments walk all over their gravy train.  They will mobilize all the power they have to affect the decision in national capitals.  [Jerome Powell](https://leofinance.io/@leoglossary/leoglossary-jerome-h-powell) is a big ally at the Fed.  Unlike many who are economists at hear, Powell is truly a banker.  He is there to protect their interests.  It is why his Fed has little interest in a CBDC.  This is a temporary reprieve.

At some point, his term will end.

This is where the [market](https://leofinance.io/@leoglossary/leoglossary-market) has to take over.  Can it become larger than any single government?  Here again, the bankers provide the answer. Governments can be overcome by operating internationally.  [Blockchain](https://leofinance.io/@leoglossary/blockchain), by its nature, is global in scale.  It matters none where one accesses it from.

Both cryptocurrency and the bankers have the same goal: **to ensure that CBDCs do not become the norm**.  This is a classic fight between those who want control via government and those who fight in the private sector.  Bankers might not be the nicest cats on the block.  However, we do know what drives them and what they are after.  Greed is their motive with the goal being "more".  They are rather transparent about this.

The years of [FUD](https://leofinance.io/@leoglossary/leoglossary-fear-uncertainty-doubt-fud) against [Bitcoin](https://leofinance.io/@leoglossary/leoglossary-bitcoin) from the bankers needs to stop.  It is evident why they did that: they saw the threat.  There is, unfortunately, a bigger threat to them.  That means it is time that people on both camps, cryptocurrency and banking, speak out against CBDCs.  The BitMax article is a good starting point.  Making sure the world knows that CNDCs are "pure evil" is a message that needs delivering.

A case could be made that a wholesale CBDC could have the goal of a faster, more efficient [payment](https://leofinance.io/@leoglossary/leoglossary-payment) and [settlement](https://leofinance.io/@leoglossary/leoglossary-settlement-financial) system.  There could be a benefit to the users.

On the other hand, a retail CBDC has the only goal of power.  This is why the banking industry should be against it.  The power would shift from it to governments.

Neither bankers nor crypto advocates should want to see this happen.

___
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