By Samson Williams & George S Pullen
The reason that America has become a global power is that the US Dollar (USD) is as recognizable a global brand as Coca-Cola. However, as China, Russia, and other governments pivot to issuing digital currencies, the hegemony of the US as a superpower and the USD paper currency as the globe’s reserve currency is threatened. To that end and to preserve the military, economic, and presumed democratic moral power of the US, it is inevitable that the US will create a Central Bank Digital Currency (CBDC).
Why CBDCs are Inevitable: US National Security
At the core, CBDCs are inevitable for the same reason that The Space Economy is inevitable. To be a world power in the 5th Industrial Revolution (aka The Space Economy) a country must not only have a presence in Space but be a Spacepower. What goes into being a Spacepower is complicated, technologically hard and the most expensive endeavor a country can pursue. While we’ll save the details of what is required to be a Spacepower for another article, we’ll remind the readers that in December 2019 the United States created the US Space Force, whose mission is, “The USSF is responsible for organizing, training, and equipping Guardians (space soldiers) to conduct global space operations that enhance the way our joint and coalition forces fight, while also offering decision makers military options to achieve national objectives.” What this means in simple terms is that the United States, in order to preserve its position as the global hegemonic power, is investing billions of dollars, annually, into securing and ensuring that the 5th Industrial Revolution is as American as apple pie. To drive this point home, in 2022 the US Department of Defense (whose overall 2022 budget was/is $778B USD and that was before Russia invaded Ukraine and DoD began supporting Ukranian efforts) allocated $18.5 billion USD just to fund Space Force’s efforts in securing America’s position in The Space Economy; mainly against China and Russia Space efforts.
However, being a Spacepower is only one part of being a global power in the 5th Industrial Revolution. The other part of being a global power, in the 22nd Century and beyond, is having a currency that is universally known and accepted as a medium of exchange. These two components a) being a Space Power b) having a currency that is universally known and accepted, is why CBDCs are inevitable. As both require that a country (e.g. the United States of America) and its most useful tool for war, “money”, (USD) be digital.
The 5th Industrial Revolution, aka The Space Economy, is a digitally native ecosystem. To that end, the “money” and “currency” of the 5th Industrial Revolution itself must be digital for a simple reason of usability. For this practical reason, as more and more critical government functions go digital and people become more dependent on digital infrastructure, features and conveniences, there must be a native digital currency that allows trade, commerce, finance; while empowering everyday life. This is why CBDCs are not only inevitable from a US perspective but also inevitable for any country who wishes to be a global power in the 22nd century and beyond: China, Russia, India, Nigeria, Brazil, Australia, etc.
Also Read: What is Central Bank Digital Currency? Here is all you need to know
The real question then becomes, which CBDC will become the globe’s reserve currency? Will it be the digital Yuan? The digital USD? Or perhaps, as the authors of this article often debate, will the global reserve currency of the 2000s be the digital rupee or the United Arab Emirates digital dirham? While we’re not sure and only time will tell, what we all can agree on is that the race is on to establish whose CBDC will be the world’s next reserve currency.
For the moment that we are going to wrap it here for part one of CBDCs Are Inevitable. It should be noted that while CBDCs are inevitable, the authors of this article do not think that Central Bank Digital Currencies are a good idea, a friend of democracy, or any less of a threat to Human Rights than so-called stable coins or private-digital-currencies as a whole. However, despite CBDCs being the cornerstone of any modern authoritarian government, the authors of this article nonetheless know (sadly) and acquiesce to the fact that due to US National Security and global political, economic and military “requirements”, CBDCs are inevitable not just for the USA but all countries vying to be the world’s next superpower.
About the Authors
Samson Williams and George S. Pullen are founders of Milky Way Economy, a Washington, DC based think tank specializing in understanding the economic foundations of the Fifth Industrial Revolution and the Space Economy. In addition to writing, researching, and being investors in 5th Industrial Revolution companies, Samson and George are adjunct professors at the University of New Hampshire School of Law and instructors at Columbia University in NYC. Additionally, George is a US Marine and guest lecturer at the National Defense University.
Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.
