Money, the State and the Market

The banking system is fundamentally penetrated by State interventionism and protectionism. Most of the money we use now, bank deposits, are unsafe assets with the risk of going into crisis. The State must protect banks (deposit guarantees, central bank lending, etc.) to avoid catastrophes. A way to remove this interventionism is to use a safe asset (CBDC) since this one does not need any of those bank´s protections. In a system based on CBDCs, the Market takes on all its leading role, leaving financing and payment decisions to individuals, and the State only appears as the issuer of safe money. Banks are against a system based on CBDCs since they would lose their privileges. For this reason, the State must temporarily help banks to transform so that they can compete without privileges or protections with other providers of payment and financing services.