Central Bank Digital Currencies are closer to implementation than most of us think, but it’s still unclear exactly how they will change society. And even though people know about CBDCs, many choose to turn a blind eye to the issue. People will protest about any number of things, so why is there silence regarding central governments potentially taking even greater control over the monetary system? You could even argue that with full CBDC implementation, governments would have total control.
Governments in several countries are in various stages of CBDC implementation with some countries further along than others. Specifically, the USA, Japan, and Russia have all made recent announcements about testing centralized digital currencies. Let’s see how far along each country is and discuss some of the potential areas for abuse associated with CBDCs.
In the States, The New York Fed announced on Dec 15th, 2022 that it had already begun developing a “wholesale CBDC designed to speed up transfers between banks around the world.” Later, a whitepaper was released stating that the US proved they could do international transactions between banks using blockchain tech.
Earlier this month, the Bank of Japan said it’s going to launch a program in April to test its digital yen for “possible social implementation.” This probably means that Japan is testing a full-scale, completely controlled digital monetary system.
Finally, The Bank of Russia recently said it’s also launching a program in April to test its digital ruble system for “retail purchases and peer-to-peer transactions.” This also sounds like a full-scale centrally controlled system.
This all comes as China is leading the world in the pace and scope of its digital yuan and more than 105 countries are in various stages of CBDC development—probably no big deal.
However, some people speculate that this is a large factor in helping blue chip coins reverse their downtrends. People are starting to see the value in decentralized financial and payment systems. Or they just like the idea of having a form of digital gold…an asset that is capped at a certain number, can’t be printed out of thin air and can be owned by the individual. While that is good news, there is still plenty of reason to worry.
As you might imagine, there are some areas where significant societal changes could rapidly happen with the implementation of CBDCs.
One potential issue is government surveillance. CBDCs could open up many new possibilities for monitoring and tracking individuals, including the ability to monitor financial transactions in real time.
CBDCs may also provide governments with more control over the finances of regular people, allowing them to impose taxes or fees at any time or even freeze funds without the need for a court order.
The government could also use capital controls. CBDCs give governments more control over their national economies because they can impose limits on how much money people can send and receive. And perhaps scariest of all, they can even freeze accounts at any time for any reason.
Finally, CBDCs could be used as a tool for social engineering by allowing governments to decide who gets access to certain financial services and products based on their environmental, social, and governance scores.
The potential for CBDCs is vast and far-reaching. You’ve really got the whole range of things – from government surveillance to social engineering and restrictive monetary policies. It’s clear that CBDCs could give governments a new level of control over people. There might be some legitimate uses for CBDCs, but it’s unclear what implications they may have on our privacy, freedom, and financial security. Only time will tell how CBDCs will shape the future of global economic systems and it’s probably an issue that everyone should pay attention to.
This is a Contributor Post. Opinions expressed here are opinions of the Contributor. Influencive does not endorse or review brands mentioned; does not and cannot investigate relationships with brands, products, and people mentioned and is up to the Contributor to disclose. Contributors, amongst other accounts and articles may be professional fee-based.