> How should governments respond?
> Wolf argues that central banks (e.g., the U.S. Federal
> Reserve) should create their own official digital
> currencies — central bank digital currencies (CBDC)
> and make cryptocurrencies illegal.
Cryptocurrencies are borne out of a desire to be rid of governments. They're the ultimate libertarian dream of a stateless world.
Bitcoin and its ilk award the early adopters and pre-miners. They are not vehicles of economic empowerment. In fact, unsophisticated and poor investors can be ruined by moving their assets into crypto when subject to wild price swings, pump and dumps, and HFT/finance operations.
Fiat is a system of levers that betters the health of the government that mints it. They can be used to defer recessions, hedge inflations, fund infrastructure and investments, and increase the wealth of the populace. Bitcoin cannot do this. The crypto system rewards the whales, hucksters, and scammers.
Money printing also correlates with the productivity of the population, otherwise it becomes unhealthy. Taxes reap a portion of the growth and reinvest them.
USD comes with assurances. FDIC and a wealth of other measures are in place to protect individuals. If it's attacked, the government will respond.
If you lose your crypto wallet, you're screwed. No government backs BTC, so if the crypto is defeated (as nation state actors may have already done), everyone's investments crash to zero with no restitution. One crypto attack destroys the entire house of cards, and it is coming.
It's also reassuring to know that the USD is backed by a democratically elected governance.
Crypto makes hacking and cybercrime easier. It isn't untraceable like many USD transactions leveraging layering/integration and similar techniques, but it certainly doesn't require the same level of financial crime sophistication as moving money in fiat does. You don't need vast networks of physical money laundering machinery and real people in the loop.
Crypto burns energy, wastes GPU resources, drives up prices, and puts our brightest minds to the task of solving stupid and meaningless problems.
Crypto does not benefit society and the US government needs to step in with an alternative to meet the demand. Once they've become the de facto standard, then they can ban crypto.