S15 E32: Aaron Day on CBDCs vs Bitcoin, Digital Tyranny & Parallel Economies

Aaron Day has been a bitcoiner since 2012. He paid political activists in bitcoin back in 2014, he has lived on bitcoin, gold, and silver since 2019, and he wrote a whole book warning that central bank digital currencies are a matter of when, not if. And yet, near the end of Season 15 Episode 32, he told me something no Bitcoin conference would print on a lanyard: “Right now today when I’m in front of a group of people I can’t recommend Bitcoin because of the cost and the speed.”

That contradiction is the whole episode in one sentence. Aaron is the author of The Final Countdown: Crypto, Gold, Silver, and the People’s Last Stand Against Tyranny by Central Bank Digital Currencies, a fellow at the Brownstone Institute, the host of The Aaron Day Show, and a man who briefly ran for president of the United States with a campaign that was mostly an excuse to get one message onto a debate stage. He tours the country giving four-hour workshops built on his book, and his audience is not crypto Twitter. It is Boomers, churchgoers, and people who woke up angry during the Covid years.

We recorded this in April 2024, a few weeks after my S15 E26 interview with Roger Ver set my mentions on fire, and right after Ray Youssef’s S15 E31 episode. Aaron had just interviewed Roger himself about Hijacking Bitcoin. So yes, this is another big block conversation. But the villain here is not Blockstream. It is the programmable dollar.

Programmed, Monitored, Censored

I asked for a definition first, because “CBDC” gets thrown around like a horror movie title. Aaron’s was crisp: “a digital form of fiat currency essentially that can be programmed, monitored and censored by a government or financial institution.” In his framing, it is “the central point for complete digital tyranny,” the plug that social credit systems, digital IDs, and vaccine passports would all connect to. The convenience and financial inclusion talk, he argued, is the brochure, while “every implementation so far has been more about surveillance and control.”

I pushed back with what I had heard in Europe. The digital euro pilots promise some privacy within limits, a bit like Chaumian mints, where small payments stay anonymous and large ones get identified. And frankly, I said, most Western citizens already pay with credit cards and feed surveillance capitalism every day. So what is the delta?

Aaron agreed with the premise and then made it darker. The current system is already bad, and people should be leaving it anyway. “If you’re really into fear porn just read the terms and conditions of your bank account,” he said. He cited a Royal Bank of Canada customer blocked from withdrawing $3,000 for a car, an Australian bank branch that no longer had physical cash, and a long list of businesses that get debanked for selling firearms or touching crypto.

His best analogy was the American health savings account, where a card only works for pre-approved items. A CBDC could do that to every purchase: “literally if it’s not on a white list you can’t purchase it at all.” His summary was blunt: “It’s a worse form of fiat but fiat’s already bad.”

My Great-Grandfather’s Workshop and the Global Ledger

His mention of Cyprus seizing deposits reminded me of my own family history. My great-grandfather had a workshop here in Romania, and when the communist regime arrived, the state took the property and declared it belonged to all the people. They also changed the money, letting people swap only a limited amount into the new currency. Some had truckloads of cash that became wallpaper overnight. So I offered Aaron a framing: CBDCs look like nationalizing what is already private, since banks can already score and restrict you but at least have to compete for customers.

“It is nationalizing what used to be private,” he answered, and then he zoomed out further. In his view, the IMF is already working on a global CBDC, and the UN’s 17 sustainable development goals point toward a carbon-scored world. “My belief is that if left unchecked we’d be looking at a global CBDC that’s backed by carbon credits,” he said, adding that you can read the documents and meeting minutes yourself. I countered that the “international community” is mostly Western countries agreeing with each other, with BRICS forming their own clubs, and that in a best case scenario governments might become like restaurants where you check the menu and choose.

Aaron was not sold on the menu. He walked me through China’s social credit system, which in his telling can punish you for cheating in a video game or not visiting your elderly parents enough. “There are already 23 million people in China that are blacklisted based on their social credit score,” he said, and when he shows this at workshops, Americans tell him it could never happen there. His reply to them involves Edward Snowden’s books, surveillance cameras that photograph Americans 75 to 80 times a day, and 100,000 new cameras installed daily.

Project Hamilton and the 1.8 Million Transactions Per Second Problem

This was the part of the episode where I took the most notes. Aaron described three American CBDC pilots. The first, Project Hamilton, was a collaboration between MIT and the Federal Reserve Bank of Boston, and it produced a retail CBDC design capable of 1.8 million transactions per second. So while we argue about seven transactions per second on Bitcoin’s base layer, the other team has already shipped the engine. He also pointed out that Bitcoin Core developer Cory Fields appears on the Project Hamilton white paper (the code lives on as OpenCBDC). His paraphrase of the conclusion after the 2020 to 2022 pilot: “We have the technology, we just need to figure out the legality and the marketing.”

The second pilot, Project Cedar, handles wholesale cross-border settlement between banks. The third, the Regulated Liability Network, is in his words “probably the most dystopian of all three of the CBDC pilots,” a single ledger tracking CBDC transactions and all digital assets, with tokenized securities visible to the DTCC and the Fed and everything settling in CBDC. “It’s the digitization of all assets,” he warned.

The way Aaron sees it, digital money has two sides. One is the pro-freedom tool he fell in love with in 2012, instant and nearly free. The other is what central banks and governments built after deciding Bitcoin was a threat. “We’re really dealing with kind of this battle between freedom and tyranny within this digital space,” he said, while the crypto crowd is busy asking which memecoin will pump this cycle.

Digital Cash, Digital Gold, and the Hijacking of Austrian Economics

Aaron has receipts from the early days. He ran a super PAC in 2014 that raised bitcoin and paid activists in bitcoin, and he remembers spending it at Expedia, Overstock, and Steam. Then the narrative changed. “Nobody was sitting around in 2012 that was in Bitcoin saying oh we’re not going to use this to buy and sell things, this is just going to be digital gold,” he said. “I think the digital gold argument is ridiculous.”

He laid out his theory of how the shift happened: the community-run Bitcoin Foundation imploded, MIT took over funding for development, and Joi Ito, who chaired the MIT Media Lab, also co-founded the venture firm Digital Garage. Aaron’s claim is that the same orbit funded SegWit, Lightning, and all three US CBDC pilots, and he wants to know more about how that happened. He gave Roger’s book credit and then raised the stakes: “Roger talks about the hijacking of BTC, I think it’s the hijacking of Austrian economics.”

The ETF era made it worse in his eyes. Investors buy through BlackRock or Fidelity, who store coins at Coinbase, so “we’ve now gone from peer-to-peer to there being two intermediaries between the end consumer and actual Bitcoin.” He sorted the forks into three flavors: BTC as digital gold that may end up backing fiat, BCH as the consistent peer-to-peer cash chain, and BSV with its belief that every CBDC will run on top of it. And for what it is worth, he said most people he knows from 2012 “are not Bitcoin maximalists.” They may still hold plenty of BTC, but they softened.

I Pushed Back: Can You Hijack a Protocol?

This is where I put on the referee shirt, which I did not have time to do with Roger. How can Bitcoin be hijacked when it is a protocol and an idea? In 2017 the community split. One camp refused the block size increase under the New York Agreement and kept BTC, SegWit2x later failed, and BCH became the bet on on-chain scaling and digital cash. We got two competing versions, and in inflationary times the market seemed to care more about saving than spending. I added that BSV, with huge blocks and a handful of friendly validators, is the ultimate CBDC: an open ledger with few validators and compliance requirements turns liberation tech into surveillance tech.

Aaron agreed on BSV, and it clearly hurt him. He had used it, knew the community, and even tried to talk Craig Wright out of nChain’s pro-CBDC turn. Craig’s response, as Aaron recalled it: “I don’t need to hear anything that you have to say on CBDCs, I’m getting a PhD on CBDCs.” He blamed the mining centralization on lawfare and patent trolling, noting that “over 50% of that hash rate is controlled by Calvin Ayre,” and that miners now sign legal agreements allowing transactions to be frozen. “They’ve butchered the concept and now they’ve added legal layers on top of it.”

On the protocol question, Aaron went to the source material. The white paper, Bitcointalk, and the Malmi emails released during the COPA versus Craig Wright trial convinced him that Satoshi meant Bitcoin to compete with Visa and Mastercard on chain, with the block size limit as a temporary safety measure. “It’s ridiculous to hold the network hostage” to that limit, he said, and he had a vivid description of the current security model: a network “secured by people that don’t have an economic interest using inferior equipment essentially watching central banks move large amounts of value back and forth to one another.” As for the idea that open source has no motives: “Yeah it might be open source but somebody’s funding it.”

He also brought numbers from the road. Aaron has given his talk in 20 states, where he points out that Boomers hold about 43% of US wealth, and in his informal surveys more people recognize Sam Bankman-Fried than Satoshi Nakamoto. To those audiences, the block size war never happened. They only know the digital gold story from the news.

Bitcoin as a Panopticon, Plus a Controlled Demolition

Then I made my strongest case. Aaron was appealing to Satoshi’s authority, but version 0.1 shipped with an unfinished poker game and an unfinished P2P marketplace, the white paper never mentioned the 21 million cap, and its privacy assumptions were naive. Since blockchain explorers and chain analysis firms arrived, I argued, “Bitcoin is sort of a panopticon,” because every on-ramp and off-ramp in the US requires KYC. Scaling the base layer only makes it easier for governments to watch, and “I think cash is an important dimension of a free society.” This happened to be the perfect segue into my Wasabi Wallet ad, with CoinJoins over Tor and the ShopinBit “Buy Anything” button for spending mixed coins.

Aaron’s answer was that I was missing the bigger picture. “I think we’re seeing a controlled demolition, intentional controlled demolition of the fiat system which is designed to push everyone onto CBDCs,” he said. That, in his view, explains the crackdown on exchanges and LocalBitcoins, and why “Ian Freeman is in federal prison for eight years for voluntarily selling Bitcoin to people.” He pointed at his campaign shirt, whose slogan was Bank Run Now, Halt CBDC, Stop World War III and the Fed, and explained that banks no longer need to hold even 10% of deposits in reserve, which is why he sees a bank run as nearly the only exit left.

And here is the label he gave himself, which I think explains everything else he said: “I’m a CBDC minimalist and I’m maximumly for whatever else works to stop CBDCs.”

From Spreading Freedom to Stopping Tyranny

Aaron’s frustration with BTC is a former fan’s frustration. In 2012, “Bitcoin had a lead I would say ideologically and technically.” It was faster and cheaper than anything in traditional finance. Then Zelle, Venmo, Apple Pay, Google Pay, and soon X payments caught up and passed it. Now, he said, “the actual entire context has shifted from spreading freedom to now stopping tyranny.”

I told him he had a disconnect. He names people jailed for selling bitcoin and suggests greater forces sabotaged it as cash, and then asks everyone to adopt it as cash immediately. Every on-ramp can deny you. There is not enough peer-to-peer liquidity to onboard millions of people in a day. Maybe it was always going to be a niche product. “I don’t think it was designed to be a niche product, I think that’s what it’s been hijacked and that’s what the new explanation is,” he shot back.

His counterargument was about the default outcome. By his count, 134 countries are researching, piloting, or rolling out CBDCs, up from 35 in 2020, and “there are now more CBDC accounts globally than crypto accounts.” So the stakes, in his framing, are not about which coin wins. “The default is complete and total digital tyranny, that is actually the default if we do nothing at this point in time.”

Goldbacks, Silver, and a Shrinking Coin List

Then Aaron held a tiny gold note up to the camera. It was a Goldback, and “this is one 1,000th of an ounce of physical gold.” In New Hampshire he has sold books for Goldbacks and has never even had to buy one, and Goldback ATMs are spreading across the US. His conclusion was that physical gold now “has a medium of exchange that is superior to BTC for domestic payments.” At his workshops, people even go home with a piece of silver.

His book originally recommended a list that excluded proof of stake, ICO coins, and anything easy to shut down: BTC, BCH, BSV, Litecoin, Ravencoin, Monero, and Zcash, plus a table of transactions per second showing the combined set could rival Visa’s average load. BSV is now off that list, and BTC is on thin ice. “If you want to talk about mass adoption, good luck getting a Boomer to set up a Lightning node,” he said.

There was also a race against time. Aaron thought there was a reasonable chance the US would launch a CBDC before the 2024 election. He ran for president to reach the debates and admitted, “I never had any expectation that I was going to win.” The limit was not donors but pollsters: “I couldn’t get the polling companies to even consider including me in the polls.”

Still, four Libertarian candidates signed his anti-CBDC pledge, Vivek Ramaswamy read his book and talked to Trump, who then came out against CBDCs. Aaron would not count on that promise, though. After talking to Ted Cruz and others, his verdict was that “there are not votes in the United States Congress to block a CBDC.”

The Bitcoin ETF and the Ghost of 1933

Aaron then went on what he called a tangent, which I would call the most pointed warning of the episode. “It’s very clear to me that the Bitcoin ETFs are about back door confiscation,” he said. He tied it to Executive Order 14067, signed on March 9, 2022, which authorized research into a US CBDC and a whole-of-government approach to digital assets. Why approve a spot ETF after a decade of refusals, he asked, when “90% of the ETFs combined hold the Bitcoin at Coinbase,” a company the SEC was suing at the time?

His historical parallel was Franklin D. Roosevelt’s 1933 gold order. Gold in bank vaults and safety deposit boxes was simply taken, while “turns out 25% of the people did not turn in their gold” that they kept at home. Read the risk factors in the prospectus, he urged, because confiscation is listed there. His final word on it: “There is no upside to buying Bitcoin through an ETF.”

Since he had just made my second ad read for me, I introduced Hodling.ch, the Swiss team that helps people set up multisig and pick hardware wallets so their coins are harder to seize, steal, or confiscate. I know one of the guys behind it, a true nerd with hardware wallets scattered around his apartment. Exactly the person you want when the gold vault story starts to rhyme.

Privacy Coins With Nobody to Trade With

“I can listen to you talk all day and probably agree with about 90% of what you’re saying,” I told Aaron, and then spent the other 10% on privacy. On a transparent ledger, one leaked address or xpub lets anyone trace your entire history. Monero and Zcash do better but get less market action. Lightning helps, and if drivechains activate, a Zcash-style sidechain could add privacy by default. But as it stands, “there’s no privacy really in Bitcoin,” and that goes for Bitcoin Cash too.

Aaron’s reply moved the goalposts on purpose. Privacy coins are useless if only a thousand people hold them when governments make everyone register their digital assets, which is what a developer from two of the US pilots told him is coming. “The only way to stop this is to essentially defund the government by getting out of fiat,” he said. And the old pace of development will not cut it: “by the time BTC has a side chain that does this, you know what, 90 countries are going to have a CBDC implemented.”

His optimism comes from a new crowd. Since 2020, tens of millions of people woke up because of lockdowns, mandates, and money printing, and a huge religious contingent views CBDCs “as being like the mark of the beast.” He was shocked by how many people in the Midwest and the South came up to him with that as their number one concern. These people don’t run nodes. “The actual product has to be dead simple.”

So I asked the uncomfortable question directly: what if Bitcoin Cash, or any transparent coin, becomes the CBDC, and we are just accelerating the inevitable? Aaron said he wrestled with that while studying BSV, but “none of them are looking at permissionless blockchains.” The US built its own permissioned system. I mentioned that Ray Youssef’s traders in the Global South adopt alternatives fast, while Americans carry “decades of indoctrination about being the greatest nation on the planet.” Aaron pointed to Nigeria, where the CBDC stumbled but is still being revived, and where “nobody in Nigeria internally decided to push a CBDC.” It came from the IMF and the World Bank.

Hard Drives, Nodes, and the Unknown Unknowns

Inevitably, we hit nodes. I argued that decentralization needs the average person to spin up a node in their bedroom. “I don’t buy into the everybody has to run a node,” Aaron replied.

He had run the numbers: it cost about $300 to buy a 2 terabyte hard drive in 2009, and today he can grab a 2 terabyte microSD card at Walmart for $14.98. To him, capping blocks around 2009 hardware is the same scarcity mindset as UN technocrats designing the world around their own assumptions. The interesting bit was his philosophy: there is what we know, what we know we don’t know, and what we don’t know we don’t know, “and it’s that what we don’t know we don’t know where all the magic is.”

When I asked how long it would take him to validate from the genesis block, he said that does not even matter to him, because Bitcoin was designed for SPV payments with miners adding blocks. I explained why running your own node is about privacy, since you keep your xpub locally instead of handing it to some Electrum server in the cloud. He was unimpressed: “There’s going to be privacy for transactions that don’t exist.”

Then he flipped it on me. Can he send me BTC peer-to-peer? Technically yes, I said. What stops him? “Fees are what prevent it from being useful as an alternative,” he answered, pointing to ordinals pushing fees up and squeezing Lightning onboarding. Sending BTC costs more today than when he started. I noted the price also went up a lot since then. His reply: that only helps the few thousand people who bought early, which is no way to build a parallel economy.

Confiscation Resistance Is Not Censorship Resistance

I asked him to name Bitcoin’s value proposition. The white paper version is peer-to-peer cash without intermediaries and a fixed supply. Today’s reality, in his eyes, is “a speculative investment that you can make money on until the party’s over.” When I raised censorship resistance and confiscation resistance, he answered: “Ask Ross if it can be confiscated, ask Ian Freeman if it can be confiscated.”

He also shared why legal liability is personal for him. “I ended up as a codefendant in $280 million worth of litigation for personal liability,” because his venture had no corporation. His second company was partly destroyed when Dodd-Frank killed its debit cards and the Department of Justice seized a payment vendor’s funds over another customer’s alleged offshore gambling. “I was collateral damage from other government regulation that was targeting other players.”

Here I corrected him, because “I think you’re conflating two terms, which is confiscation resistance and censorship resistance.” Confiscation resistance is about not handing your coins over when someone comes knocking. Censorship resistance is about getting a transaction into a block.

My girlfriend is from Iran, so I gave him the obvious example: even if 90% of miners obey the OFAC blacklist, the other 10% will take the right fee, and “without the fee to bribe the miner there is no way for Bitcoin to be censorship resistant.” As long as one free country allows mining, that remains true. I also plugged Satodime, the open source bearer card from the Satochip team I interviewed in S15 E20, as a Casascius-style way to hand bitcoin around locally.

Aaron accepted the distinction but kept his priority: censorship resistance with no users is a micro niche. “I don’t think this was ever intended to be a niche product,” he said, and he believes Satoshi stayed anonymous for legal reasons, since earlier currency issuers like the Liberty Dollar folks ended up in prison. In his words, “it was highly beneficial for whoever Satoshi Nakamoto was to remain anonymous.”

Big Blocks, Twetch, and My BIP 300 Pitch

Before we wrapped, Aaron defended big blocks one more time. BSV showed you can do huge transaction volume on chain, and its centralization comes from people and lawfare, not technology. “Big blocks can work, but they require people to adopt them,” he said. He used Twetch, a Twitter alternative on BSV where “you’re storing your tweets on the blockchain,” and he sees microtransactions as a way to break Silicon Valley’s model of monetizing your data. Still, he circled back to the threat that makes all of this irrelevant if ignored. “If you’re interested in liberty at all, if you’re interested in free will, it seems like stopping CBDC should actually be the number one focus.”

I named our real disagreement: coin of choice. I remain hopeful about proper sidechains, so I pitched BIP 300 by Paul Sztorc, which could onboard people directly to big block sidechains without forcing every node runner to validate them (drivechains came up in my S15 E16 episode with Paul, where he was not allowed to say the word). Aaron’s answer was the most reasonable thing a big blocker has said on my show in a while.

“If they increase the block size, if A, B and C happens, I do it.” He will be in front of 300 people within weeks, and “onboarding them with $5 of BTC is not practical today.” His message to BTC maximalists was colorful: “get your ass in gear and get this launched,” because the competition is central banks, not other coins.

I told him I understood. If a newcomer is sloppy with self-custody, “it’s not going to be very tragic if they lose Ravencoin or whatever.” Then I congratulated him on the advocacy, because whatever you think of his coin list, he is out there handing silver to Boomers while the rest of us argue about opcodes.

The Final Countdown, Revisited

Aaron’s closing advice was not political, which is notable from a man who ran for president. He pointed out that 100% of incumbent US senators won re-election in 2022, so he expects no rescue from Washington. His plan is to get as many people as quickly as possible into self-custody crypto, gold, and silver, and to start using them for daily trade. “This isn’t about a hedge against inflation, this is about a hedge against complete and absolute digital tyranny.”

I still disagree with him on scaling and privacy, and I still think an open ledger at Visa scale is a gift to the surveillance state. But this episode aged in an interesting way, because the CBDC debate later returned to my show with guests who share his alarm, like Prof. Richard Werner and Amir Taaki in S17 E40. Back then, Aaron sent listeners to Day2024.com for his book, workshops, and articles. That domain now shows a for-sale page, so today the best places to follow him are Daylight Freedom, home of The Aaron Day Show, and his Brownstone Institute author page, with the book still available on Amazon.

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