Take a sharp look at the cover of the 2nd week of November 2020 edition of TIME magazine. Illustrated planet Earth with a number of builders around it. Big title: The Great Reset. The digital version of the magazine is not available in Indonesia, but it may be closely related to what the IMF said recently, including the views of Bitcoin adherents out there.
Last week, the IMF strengthened its signal to accelerate the improvement of the global monetary system so that the world economy would not be as devastated as the impact of World War II. Kristalina Georgieva, Managing Director of the IMF firmly said that the world must do the same thing as Bretton Wood, 1944.
The IMF's big signal was "the great reset", resetting the world financial system, which was at a time that was more or less as bad as 1944, ahead of the end of World War II. At that time 44 countries agreed to fix the exchange rate of their money against the US dollar, where the value of the US dollar at that time was pegged to the value of gold.
But that vanished, after 1971, President Richard Nixon abandoned gold as the main measure of dollar value. The reason is that the US economic and military expansion needs more money and at the same time many countries are converting US dollars into gold. Uncle Sam was afraid that the gold would crumble.
Be the world, depending on the US dollar, but the value of the US dollar is very dependent on US domestic and foreign policies. That's where fiat money starts: "let it be done!"
The dominance of the dollar is insane. It is so crazy that the dollar is used as a powerful weapon to suppress other countries, through US sanctions. it also forces dollars to be bought on the black market. And of course, we are so dependent on the dollar, when the US economy collapsed like in 2008, other countries were hit by the sap.
And now, look at the last few years, including recently Indonesia decided to use YUAN / IDR as a benchmark for trade between Indonesia and China. For the sake of what? In order to avoid using the more expensive dollar. What a logical decision!
In the same year, in 2008 Bitcoin came to the surface, when the economic situation was still chaotic when the British Central Bank decided to provide aid funds to a number of banks.
Bitcoin sets clear boundaries, that its financial system is outside the superstructure of state power. Bitcoin as a form of electronic money is returned to the basic concept of money, which is abstract and handed over to sovereign individuals. In terms of ideological value, Bitcoin is an opponent of such an unlimited supply of fiat countries and currencies.
Since 2008, Bitcoin has become a means of knowing that with technology humans have more value choices for transactions. Although monetary and fiscal policies by high-ranking state officials are still the main ones, at least technology becomes an instrument for making wiser decisions.
Of course, this is more or less similar to the invention of printing machine technology for banknotes, including cloud technology for server-based electronic money. Any great technology, if the policy for implementing the system is arbitrary money, that's the same.
Bitcoin is also what directs China to make digital money (CBDC) for their yuan because they fully understand their economic advantages and of course the efficiency of the technology.
Other countries quickly followed suit, including the European Union for the digital euro, Japan, South Korea, Switzerland, Cambodia, Singapore, and many more. However, the US did not move, felt that it did not need to hurry, the important thing was right.
Look at what the head of the Fed, Jerome Powell said at the IMF seminar recently.
The central bank's digital currency (CBDC) is recognized as providing some value.
CBDC will not be a substitute for physical cash but as a compliment.
There are many challenges in implementing CBDC, including security, the potential for counterfeiting and changing monetary policy, and so on.
The Fed has been working on a faster and cheaper payment system, namely FedNow, but that will not be implemented and operational for several years.
The CBDC is just an idea that is being explored at the moment and no work will be done until the Fed fully understands the pros and cons.
What Powell said was actually not new, just a repetition like a few months earlier, including by other IMF people, in addition, that the digital dollar assessment was carried out with a well-known campus, namely MIT.
We can interpret this that the US has not publicly affirmed that the digital yuan is a serious threat because it is far more efficient in terms of speed and cost, as well as ease of access globally.
Combining the failure of the US to control its dollar and having serious impacts on the global economy, including the search for dollars on the black market by high inflation countries, many people are also snooping on another object of value on the Internet, namely Bitcoin.
Bitcoins are rare, digital in nature, and much higher in portability than gold, even though they are equally valuable.
And when the economy is in shambles like now, fiat money has no value either. Instead of saving money in the bank, buying bonds, saving stocks whose fundamentals are no longer clear, fiat money is transferred to assets that are more valuable, even though they are considered risky. Just say it's worth it.
So it is because of good technology that the yuan is much more valuable than the US dollar, and it is easier to make a more accurate monetary policy. And it is not surprising that former high-ranking Chinese Central Bank officials said that the digital yuan could decide the dominance of the dollar. Total!