The world has witnessed the emergence of stablecoins like Tether's USDT and Circle's USDC as crucial monetary tools, particularly in countries facing high inflation

However, as we dive deeper into the concept of financial freedom, it becomes evident that stablecoins fall short when measured against various definitions of liberty as outlined in political science literature.

Isaiah Berlin's Two Concepts of Liberty

In his seminal essay "Two Concepts of Liberty," Anglo-Russian political theorist Berlin posits that freedom can be understood in two primary ways: negative and positive.

• Negative freedom, or liberal freedom, refers to the absence of interference or barriers, leaving individuals alone to pursue their goals.

• Positive freedom, on the other hand, involves the active exercise of freedom to realize a potential or aim.

Irish philosopher Philip Pettit further expands on this concept with the "republican" or "neo-Roman" conception of freedom, which combines elements of both negative and positive freedom.

According to Pettit, republican freedom is characterized by an absence of domination, rather than simply the absence of interference.

The Shortcomings of Stablecoins

When measured against these definitions of freedom, stablecoins fall short. While they may offer a hedge against unstable national currencies, their limited scope and lack of autonomy render them insufficient for true financial liberation. Stablecoins are not actively exercising freedom to realize a goal, but rather existing in a state of neutrality.

The Advantages of Bitcoin

In contrast, bitcoin (BTC) offers a more comprehensive approach to financial freedom. As a decentralized digital currency, bitcoin provides individuals with a new form of money that is not tied to any government or institution. This allows for a much broader range of possibilities when it comes to personal liberty, as individuals are free to exercise their autonomy in ways not possible with stablecoins.

In Search of Financial Freedom

While stablecoins may present an attractive option for those seeking a hedge against unstable national currencies, they fail to deliver on the promise of true financial freedom.

By contrast, bitcoin offers a more comprehensive approach to liberation, based on a combination of negative and positive freedom. As the world continues to grapple with the complexities of financial systems, it may be wise to reconsider the role of stablecoins and the potential of bitcoin in facilitating the personal liberty that people desire.


References:

Tamac, B. (2024, January 19). In Search of Financial Freedom: The Answer Lies With Bitcoin, Not Stablecoins. Retrieved from https://www.coindesk.com/consensus-magazine/2024/01/19/in-search-of-financial-freedom-the-answer-lies-with-bitcoin-not-stablecoins/

Hayes, A. (2023, July 6). Stablecoins: Definition, How They Work, and Types. Retrieved from https://www.investopedia.com/terms/s/stablecoin.asp

A. (2024, January 5). How stablecoins differ from Bitcoins? | Stablecoin Development. Retrieved from https://www.bitdeal.net/difference-between-stablecoin-and-bitcoin

Stablecoins vs bitcoin: The 3 major differences explained | BVNK Blog. (n.d.). Retrieved from https://www.bvnk.com/blog/stablecoins-vs-bitcoin

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