NCFA Fintech Confidential December 2020 (Issue 3)

Third, countries want to have the freedom to
decide who is a money launderer and who
is a tax evader. This sounds absurd. Hear
me out. Much of the clandestine activity
of intel agencies are very often carried out
with laundered money. Countries deem the
activities of their intel agencies as essential
to survival. If these activities are caught in a
trap of “laundering,” the funds can be frozen
by the US. Furthermore, some countries
reserve the right for political or national
security reasons to let some elites off the
hook when it comes to tax evasion, money
laundering, or hidden financial identities.
Why should politicians in DC get to decide
matters of sensitive national security of
other nations in a simplistic “good versus
evil” view of the world, especially when
recent history has shown these judgment
calls to be smeared with hypocrisy?
So, the CBDC debate rages on. Let’s not
think that it is solely about functionality or
the issues being addressed. Power, money,
and nation-building are first and foremost.
Regulation comes a distant second. And
problems being solved are, unfortunately,
last. The reason why the debate over
CBDC has the hallmarks of the fog-of-war
is because, as always, we’re having the
discussion upside down: the solutions come
last, politics come first. Welcome to the
world of financial realpolitik. It’s form over
function — political form trumps practical
function as these new digital rails are being
built.
About:
Paul Schulte
Founder and Managing Editor
Schulte Research
Paul Schulte is the Founder and Managing Editor of Shulte
Research based in Singapore. Paul’s roles in banking &
financial services in the past 30 years include equity & fixed
income research (buy & sell sides) in emerging markets.
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