A central bank digital currency, or CBDC, is a digital version of a national currency. So instead of pound notes in your pocket you’d have a digital version of your ‘money’ which would be registered and controlled with the government in a central database.
Unlike paper notes, it would offer neither the privacy protections nor the finality that cash provides.
Why Central Bank Digital Currencies Shouldn’t Be Adopted
- There are no benefits to adopting it
- Financial privacy will disappear
- Government will see and control every transaction
- Huge security/privacy risk as everything is centrally controlled
- You’ll lose money
- You’ll be banned from buying certain things
- You’ll be prevented from travelling
Think about this one. At the moment, governments don’t know what you spend all of your money on. E.g. Keir Starmer doesn’t know who’s using a £20 note today and he doesn’t know who’s using a 500 Euro bill tomorrow. But with CBDC he will.
The big difference with the CBDC is the central bank will have total control on what you can spend your money on and will also have the technology to enforce that.
This is a huge threat to freedom and privacy.
With this data, a CBDC would provide absolute power for the government to control citizens’ financial activity.
Governments have long recognized that freezing someone’s financial resources is one of the most effective ways to lock them out of society. With a CBDC this could be instant – a flick of a switch, a keyboard hit. E.g. if a government decided you’ve spent too much money on alcohol this month they could stop you buying any more. We’d be back in bootlegging and bartering territory. If they didn’t want you sending a donation to ‘Save the Whales’ or another political party they could stop it.
And think about interest rates, which are typically positive, i.e. you get interest on money invested with financial institutions. With all your monetary wealth in a CBDC, the government could decide they need a bit more cash so they introduce negative interest rates. In other words, CBDC would allow policymakers to set negative rates so governments could literally steal all your money!
CBDC would mean that people would be prohibited from buying certain goods or limited in how much they might purchase. For example, policymakers could stop people going on holiday by flying. They will link the CBDC to a carbon credit system where you will be told, “Computer says no.” when you try to buy that airplane ticket.
And of course, they are a security nightmare as all transactions go through a central system. A compromised database means no-one will have any money left to spend even if they want to. It’ll be swallowed up by the ether, and we’ll all be eating mushrooms again.
And any CBDC system would also function as a centralized surveillance system for all citizens.
We must resist! We must demand cash, keep using cash and never let Orwellian nightmare happen.
Image by Stefan Schweihofer from Pixabay