Erik Voorhees is many things: Bitcoin O.G., outspoken libertarian, and founder of the crypto exchange company-turned-DAO ShapeShift. He also hates the concept of central bank digital currencies (CBDCs) with a passion.
“No one who’s in crypto likes CBDCs. No one who understands the value of cryptocurrency likes CBDCs at all,” Voorhees said during an extensive conversation on Episode 2 of Decrypt's new gm podcast.
“It’s like all the worst aspects of fiat today in your bank," he added, "plus Orwellian spy surveillance nightmare. And so, who is clamoring for CBDCs? Only people that want surveillance over their subjects. Those are the only people. Obviously this is why China is leading the pack in terms of adoption of CBDCs.”
Voorhees certainly isn't the only person in crypto who feels there's no compelling point to government-controlled cryptocurrencies, which don't look markedly different from what the traditional finance world already uses today.
“People need to realize that fiat currencies are already digital. So the dollar is already a digital currency, the euro is already a digital currency,” he said, adding that moving to a CBDC is “kind of funny, because we sort of already have that.”
If anything, the ShapeShift founder added, it's "even worse" than the current banking system, since CBDCs would have "greater surveillance capabilities over all the people using it." (After all, that is the appeal of blockchains: transparent, public, with all transactions tracked 0n-chain.)
And yet, CBDCs continue their rise. China’s own CBDC, the digital yuan, is rapidly progressing. It's being accepted as payment at this year's Winter Olympics in Beijing, and about $1.5 million of the coin was just airdropped to tens of thousands of Chinese citizens, and has already appeared in stores nationwide.
Will US follow China?
Bitcoin advocate and Senator Cynthia Lummis (R-WY), alongside Senators Marsha Blackburn (R-TN) and Roger Wicker (R-MS), asked the US Olympic and Paralympic Committee to stop athletes from using the digital yuan amid concerns it “may be used to surveil Chinese citizens and those visiting China on an unprecedented scale."
The United States has been far more cautious about adopting its own CBDC, though officials like Fed Chair Jay Powell have repeatedly said the US is looking into it.
Voorhees believes the US is at a fork in the road.
“[The US] can either go the way of China and make this Orwellian, super-centralized CBDC world, or they can be a little more free market about it and acknowledge that private companies like Circle, like Tether, have already created a CBDC that’s better than anything they would create,” he said, adding that’s “probably how it will go.”
And this is what Voorhees actually hopes to see—stablecoins that fit the CBDC bill: “They are a currency of the central bank, and they are digital. However, they operate on open networks, and even though they are not permissionless, they are far better than the banking system."
Voorhees doesn’t just oppose CBDCs, he's flat out against any financial product that sacrifices user privacy. In August last year, he tweeted that KYC (know-your-customer rules designed to prevent financial crimes) are “unethical." KYC, he added, "employs the coercion of government to require companies to endanger their customers, and customers to endanger themselves."
That's why, in July, ShapeShift became a fully decentralized exchange and shut down its corporate business.
Becoming a decentralized exchange (DEX) was crucial for Voorhees as it enabled trading without intermediaries. What’s more, ShapeShift’s codebase went fully open source, with control being handed over to the ShapeShift DAO (decentralized autonomous organization).
While the ShapeShift founder said he's lost faith in the American government, he predicts US political leaders will ultimately allow stablecoin usage to grow, because “they’re not as Orwellian or desiring of central surveillance as China."