One boosts privacy, one boosts control

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GM. We squeezed crypto until the volatility pulp fell out - and what was left tasted surprisingly stable:

🥊 Stablecoins vs. CBDCs.

🍍 Market flavor today

🥊 Stablecoins vs. CBDCs

Most days, The Daily Squeeze is charts, narratives, and people debating whether we're entering the bear market.

But today we're zooming out and breaking down two digital money ideas that get lumped together way too often: stablecoins vs. CBDCs.

Let's dive in 👇

We're start with the shared goal.

Both stablecoins and CBDCs are designed to be:

👉 Digitally native;

👉 Price-stable (not swinging 10% a day);

👉 Easier to move than traditional money.

... And that's where the similarities mostly end.

Stablecoins: crypto's version of boring money (and that's a compliment)

Stablecoins are cryptos designed to hold a steady value, usually by being pegged to something stable.

The goal isn't number go up. It's... number stay put.

They act as the calm center of crypto - a place to hold value, trade against, or move money without dealing with wild volatility.

There are a few main ways stablecoins stay stable:

👉 Fiat-backed: pegged to currencies like USD and backed by reserves;

👉 Crypto-backed: stabilized using other crypto as collateral;

👉 Commodity-backed: tied to assets like gold.

Because they live on blockchains, stablecoins can move globally, settle quickly, and plug directly into DeFi apps.

That's why traders, builders, and DeFi users rely on them so heavily.

Meanwhile...

CBDCs: digital cash issued by governments

CBDCs (Central Bank Digital Currencies, if we're talkin' full names) are digital versions of a country's official currency, issued and controlled by the central bank itself.

They're not crypto-native. They're not decentralized. They're digital cash, but government-run.

CBDCs are built to modernize the existing financial system - not to replace it.

Depending on the design, they can be:

👉 Used by the public like digital cash;

👉 Used behind the scenes by banks to settle large transactions

In both cases, the central bank stays in control of issuance, rules, and monetary policy.

Now, the real difference (this is the important part)

At a high level, the split looks like this:

👉 Stablecoins are issued by private companies or decentralized protocols.

👉 CBDCs are issued by central banks.

But philosophically, it's bigger than that.

Stablecoins are built to work globally, plug into crypto and DeFi, and operate on open blockchains.

CBDCs are built to strengthen government control over money, improve payment efficiency, and enforce monetary policy digitally.

👉 One leans toward open networks.

👉 The other leans toward centralized oversight.

And this is why people care so much.

Stablecoins raise questions about:

👉 Regulation and reserve transparency;

👉 Trust in issuers;

👉 What happens if something breaks.

CBDCs raise concerns about:

👉 Privacy;

👉 Surveillance;

👉 How much control governments could have over money.

Same goal. Very different trade-offs.

And like it or not, we're probably heading toward a world where both exist at the same time.

Enjoyed today's explainer? Check out our previous Back to Basics editions on trading types, CEXs vs. DEXs, hot vs. cold wallets, how to spot red flags in a coin, what dApps are, how a blockchain works, blockchain types, smart contracts, coins vs. tokens, Bitcoin, Ethereum, and cryptocurrency types.

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