The Currency Control Debate

In a recent online conference organized by the Bank for International Settlements, Brad Smith, the president of Microsoft, made it crystal clear: fintech firms should stay out of the private digital currency game. He argues that control over money supply needs to rest solely in the hands of governments and central banks, which is a classic discussion about who really should be in charge of the cash – that is, if cash is even a thing anymore.

The Importance of the Common Good

Smith emphasized the need for responsible entities to manage currency operations, stating, “I am not a big fan myself of encouraging or asking or wanting us [tech firms] to participate in the issuing of currency.” With this statement, it seems Microsoft is drawing a line in the sand that separates tech companies from the realms of banking and money management. Forget about tech giants hoarding coin like a dragon guarding its gold—this is a business for those who hold the public’s best interest at heart!

Facebook’s Diem Dilemma

Contrast this with the bold moves from Facebook, which has been gearing up to launch its own digital currency project, formerly known as Libra, now Diem. Since Diem’s debut back in 2019, it has faced scrutiny from regulatory agencies concerned that a stablecoin under an entity like Facebook could disrupt sovereign monetary policy. Smith aligns himself with this cautious approach, stating, “I think the world has been better served by what has been a movement over centuries to put that in the hands of governments.” Talk about throwing shade!

The Central Bank Counteroffensive

While tech firms like Facebook may be looking to take the reins, central banks around the world are not sitting idly by. In response to emerging private stablecoins, many are diving into the development of their own sovereign digital currencies. This trend seems to be a classic case of “if you can’t beat them, join them” but in a government-approved way. So, it looks like we’re gearing up for a digital currency showdown—is it the state-sanctioned money or the freewheeling fintech? You decide!

Microsoft’s Stance on Cryptocurrency

Smith’s views resonate with the somewhat tepid stance many Microsoft figures have towards cryptocurrencies in general. Take Bill Gates, for example, who once claimed that crypto technology was leading to deaths in “a fairly direct way.” Although Gates has changed his tune on Bitcoin from outright skepticism to a more neutral position, Microsoft’s overall diffusion towards crypto investments remains. In fact, the tech giant recently dismissed any ideas about imitating Tesla’s $1.5 billion Bitcoin purchase. Maybe Bitcoin just isn’t their cup of tea!