6min chapter

"Moment of Zen"  cover image

E15: Nic Carter on Balaji's Bet, Operation Chokepoint 2.0, and the Fed's financial crisis

"Moment of Zen"

CHAPTER

The Problems With a CBDC on Chain

There's a CBDC on chain by the way just a quick question. It's its own chain potentially but like there are different implementations. The main problem I have with it is that it just eliminates commercial banks because why would you hold your deposits in a commercial bank especially if there's the unsecured deposits right above the FTIC threshold when you could just bank with the government directly and then of course there's no counterparty risk unless you think the US government's going to default. Commercial banks play an incredibly valuable function which is maturity transformation taking deposits and lending long.

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