Breedem4Freedom on Nostr: Tell me where I'm wrong. A CBDC may be the end of Fiat, the last mistake of central ...

Tell me where I'm wrong. A CBDC may be the end of Fiat, the last mistake of central planners. When commercial banks issue debt, they create new currency units. When they really fuck up, borrowers default on loans, destroying the currency units. While still shitty it allows for some corrections in the market, limiting misallocation and inflation. Debt repaided or written of decreases currency supply.

How can a CBDC, liability of the central bank ever be written off or repaid? Currency supply can only ever be increased without negative interest rates and I think most would flee to other assets with negative interest rates. CBDCs will only ratchet one directions and hyperinflate.