Central bank digital currencies (CBDC's) have been spoken of in theoretical terms for many years, but they're now becoming reality. Three nations, including China, have already introduced them on a limited scale, and the USA is actively considering it too. They promise (or should that be "threaten"?) a whole new way of managing our money - or, rather, letting the powers that be manage how much we have and what we do with it.
For an excellent introduction to CBDC's, see this article by Nick Corbishley. It sums up their pro's and con's in a concise manner, and outlines the dangers they pose to individual rights and freedoms. Here's an excerpt.
So how could CBDCs impact our lives? Here are four of the most important ways:
It will grant central banks far more power over our payment behavior. A central bank digital currency system will technically no longer require middlemen such as banks or credit card companies.
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That power could be used to “program” our spending ... The Fed could directly subtract taxes and fees from any account, in real time, with every transaction or paycheck, if it wished. There could be no more tax evasion; the Fed would have a complete record of every transaction made by everyone. Money laundering, terrorist financing, any other unapproved transaction would become extremely difficult. Fines, such as for speeding or jaywalking, could be levied in real time, if CBDC accounts were connected to a network of “smart city” surveillance. Nor would there be any need to mail out stimulus checks, tax refunds, or other benefits, such as universal basic income payments. Such money could just be deposited directly into accounts ... Other potential forms of programming applications include setting expiry dates for stimulus funds or welfare payments to encourage users to spend it quickly ... Combining digital currencies with digital IDs while phasing out, or even banning, the use of cash would grant governments and central banks the ability not only to track every purchase we make but also to determine what we can and cannot spend out money on.
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Financial exclusion on steroids. One of the most important benefits of cash is its universality, making it a vital public good, particularly for the poorest and most vulnerable in society. Also excluded in a purely cashless society would be anyone who objected to having others spy on their transactions ... Lyons warns that CBDCs, “if not deliberately and carefully constrained in advance by law … have the potential to become even more than a technocratic central planner’s dream. They could represent the single greatest expansion of totalitarian power in history.”
There's more at the link.
Sundance notes, and warns:
The entry into a digital currency, needs a digital identity ... A digital currency allows ultimate control on a global basis by a one world government, or western system of collective governments, that can assign value. No other mechanism will have as much control over the life of a person than a digital currency that will create a system of transactional credits and debits, perhaps also influenced by your social credit score.
The digital currency requires a digital identity in order for apportionment based on your value to society. This is essentially an extension of the Fabian mindset into the world of financial transactions and monetary evaluations. Fabians believed that some form of socioeconomic tribunal would be needed in order for each citizen to be quantified according to their “worth” to society. The Chinese social credit score is a variant of that same concept.
The phrase “you didn’t build that,” when espoused by former President Obama and current Senator Elizabeth Warren is also based on this collective worldview. Both believe that individuals do not succeed independently, but rather gain their ability to grow wealth by using the resources of the larger society, infrastructure, labor and education. The phrase “it takes a village” to raise a child, as espoused by Hillary Clinton is another variant of the same collective advocacy.
A digital currency and digital identity is not a conspiracy theory, these “global leaders” are explaining it to us out loud. However, I am concerned that most will not hear it, or understand it, until it is too late.
Again, more at the link.
I agree with Sundance: a CBDC is effectively the most sweeping control measure yet considered by a government over its citizens - so much so that they may devolve from 'citizens' into 'subjects', because their spending (and thus their actions and freedom of expression) might be subject to far stricter control, if a government wishes to exercise it. That's what China has done with its social credit system. If the "woke" mentality prevails in this country, you can imagine how much power CBDC's would give to those who want to crush individual rights and freedoms.
The trouble is, the sheer size of modern populations may make something like a CBDC inevitable. Take, for example, the growing pressure to introduce some form of Universal Basic Income allowance. In an era of massive unemployment, with little prospect of enough jobs being created to absorb people back into the workforce, UBI may be unavoidable - although one hopes it would fold into itself all the other allowances, grants, benefits and entitlement programs currently proliferating all over the sociopolitical landscape. If UBI were to incorporate and replace Social Security, welfare payments, and they many other government payments and allowances out there, it would be both easier to fund and produce a greatly streamlined system of state assistance. However, to do so, it would have to be centrally controlled, with measures to limit fraud and ensure prompt distribution of benefits. A CBDC is probably the single most efficient way to do that, and politicians and bureaucrats will emphasize that. (Also, of course, politicians and bureaucrats will consider a CBDC's potential for social control to be a feature, not a bug. Their minds work that way.)
There's also the real danger that CBDC's might allow politicians to funnel funds to their supporters (individuals and groups) without it being noticed by the general public. Take, for example, the calls for "reparations for slavery", or demands for public assistance to illegal aliens. A left-wing administration could simply program the CBDC accounts of such individuals to get money every month, but the details would be lost in the clutter of all the other CBDC payments each month. It would be hard to tell that an extra few hundred or few thousand dollars were being surreptitiously paid out to chosen people, provided the recipients kept their mouths shut about it. It may even be illegal to spend public funds on some of those purposes - but in the absence of public accounting, who's to know? Such illegal disbursements could be disguised under any number of other labels, and absent a forensic audit, nobody will ever know about them.
If you haven't thought much, or read up about, CBDC's and their implications, you really should do so. It's the biggest threat to a cash economy that's yet arisen, and I think it's inevitably going to be foisted on us whether we like it or not. The extent to which we can retain at least some limited financial independence will depend on electing politicians who are prepared to support that, rather than grab for as much power as they can get. It's very hard to find politicians like that.