Stablecoins Are the Trojan Horse That Will Smuggle CBDCs into Our System

People like to refer to Bitcoin as a trojan horse that we are going to smuggle into the legacy financial system and government. Stablecoins are a trojan horse

The author, Hasu, begins by discussing the Trojan Horse analogy often used for Bitcoin in the context of smuggling it into the legacy financial system and government. He then introduces stablecoins as a Trojan Horse that has already been successfully smuggled into our system.

While stablecoins are heralded by some as a savior for the developing world, offering an escape hatch from decrepit financial systems and local currency risks, the author argues that the focus should be on the nature of the trap itself.

The majority of significant stablecoin volume occurs on highly centralized blockchains, issued through smart contracts that are controlled by a single party - the issuer. This grants them the power to arbitrarily freeze or confiscate any outstanding stablecoin tokens.

These blockchains also largely operate on an account model, tying every transaction a user makes to a single public address, rendering the user's full transactional history visible with a single glance.

Further compounding this lack of privacy, the software that general users interact with is largely limited to wallets that connect to one of a few highly centralized servers, tying a user's IP address to their account.

The author views this as a trap, and asserts that the U.S. does not need a CBDC as it already has US Dollar stablecoins which serve a similar purpose and are ultimately under the government's thumb due to the necessity of interacting with the legacy financial system to hold actual dollars and treasuries.

He concludes by posing the question of how people can accept the prospect of CBDCs which are largely viewed negatively by the majority, yet favor the same principles being applied by stablecoins which are already highly used and viewed favorably.