By Jake Coleman
Lately, we have observed real-life situations where stablecoins such as Tether’s USDT and Circle’s USDC have emerged as vital financial instruments. Take Turkey, for example, where the soaring inflation has prompted people to adopt these digital assets as a safeguard against the volatility of the domestic currency.
Stablecoins Are Liberation From Constraints, but Not Freedom
Stablecoins offer the potential to break free from the limitations of traditional financial systems. However, the extent to which they genuinely fulfill this potential varies depending on how one interprets the concept of freedom. When assessing stablecoins in relation to different concepts of freedom found in political science literature, this emerging currency proves to be lacking.
In order to grasp the reasons behind the shortcomings of stablecoins in terms of personal freedom and the subsequent success of bitcoin (BTC), it is beneficial to explore the perspectives of various political philosophers and their interpretations of liberty.
Now, let’s delve into the works of Isaiah Berlin, an influential Anglo-Russian political theorist. In his groundbreaking essay titled “Two Concepts of Liberty,” Berlin explores the notion of freedom from two distinct perspectives: negative and positive.
Freedom that is characterized as unfavorable, also known as “liberal freedom,” pertains to the lack of interference or obstacles—being left to one’s own devices, in other words. On the other hand, positive freedom centers around actively utilizing one’s freedom to achieve a desired outcome or fulfill one’s potential.
Another option to consider is the “republican” or “neo-Roman” perspective on freedom, which combines elements from both of these viewpoints to provoke inquiries about governing systems. Phillip Pettit, an Irish philosopher, was a trailblazer in this area, highlighting the concept of republican freedom as the lack of subjugation.
On the other hand, Quentin Skinner, a renowned British intellectual historian, focused on the idea of freedom from reliance. Having an arbitrary authority that can meddle in one’s life does not equate to true freedom for either party.
Before we delve back into the world of cryptocurrency, let’s explore the concept of freedom from a different perspective, drawing an analogy to a door. Picture a scenario where you have a plethora of doors to choose from, representing negative freedom. On the other hand, positive freedom entails the act of confidently walking through the door you have personally selected. The concept of Republican freedom adds dimension — it’s akin to having a multitude of entrances without a guardian.
In this context, you have the freedom to act without any interference from others. This aligns with the liberal understanding of freedom discussed earlier, but from the republican perspective, the mere possibility of interference already constrains one’s freedom. In order to effectively handle this gatekeeper, we require the freedom to protect our liberties.
The Availability of Stablecoins Depends on the Decisions of the Companies That Created Them
This lens provides a clear perspective on the issue surrounding stablecoins. Stablecoins can deliver a form of negative freedom, as there are minimal obstacles to utilizing these financial systems as long as they operate smoothly. Nevertheless, they fall short when it comes to the concept of republican freedom, which entails freedom without subjugation.
Here’s the issue: these assets are produced and controlled by centralized organizations. The reliability and availability of stablecoins, along with their users, are dependent on the choices made by these companies. You have complete freedom until someone disrupts your plans. However, it is essential to note that this freedom is entirely dependent on the discretion of the issuers.
Take a glance at the current state of affairs in Turkey. Amidst a tumultuous national banking system and the looming threat of inflation, numerous Turkish individuals have turned to stablecoins, particularly USDT on Tron, as a means to safeguard their hard-earned assets.
It may seem appealing initially: Rather than depending on governmental regulation of banks, place your trust in foreign corporations. However, when viewed from a particular perspective, this merely substitutes one supervisor for another.
Unchecked Power Remains an Issue, but BTC Is Changing the Rules of the Game
Regardless of whether power is in the hands of a government or a company, the issue of unchecked authority persists, and this is the core principle of republican freedom. You might still find yourself under the influence of external forces, with limited ability to exert a substantial impact on the mechanisms that dictate your economic endeavors.
Bitcoin, on the other hand, provides a genuinely decentralized alternative, bringing us one step closer to achieving freedom from domination. The decentralized nature of Bitcoin ensures that it avoids the kind of control that is associated with centralized structures found in stablecoins or traditional finance. Every individual can influence the network’s choices, which helps to minimize the chance of unfair dominance and promotes a perspective of freedom that aligns with republican values.
To sum up, stablecoins can appear as a saving grace in volatile financial environments. However, their inherent dependence on centralized issuers undermines the concept of freedom and non-domination. Merely substituting one leader for another, whether it be in a political or corporate setting, needs to catch up to what is truly necessary. Genuine financial freedom is achieved by breaking free from the shackles of trading and, instead, eliminating or managing them.
