Central Bank Digital Currencies (CBDC's): even more of Big Brother

 

Bruce Wilds warns again (as he has in the past) that CBDC's are potentially instruments of control rather than convenience.

The Federal Reserve has developed a service named FedNow for depository institutions in the United States. FedNow is described as a service and suite of tools available to banks, credit unions, and other financial service companies. It will enable individuals and businesses to send and receive instant payments. It is also designed so that banks will be able to build products on top of the FedNow platform.  

The Fed has stated that FedNow is not intended to kill or replace other money transfer options like Venmo, Cash App, PayPal, or Zelle. Instead, it is designed to work alongside the current systems built by the private sector.

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Still, it could be argued that FedNow is another step towards more control over the individual. Twenty minutes into this video by Coin Bureau the narrator takes the stand that Fed Now truly seems to be a Trojan Horse to usher in a CBDC system. It points out that while not everyone will choose to "opt-in" and adopt such a system, it will appear benign to most people and rapidly be accepted. Even those that resist will find the government will most likely force them to use it when dealing with official agencies.

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The bottom line is that not all of us see being controlled as a good thing and replacing currencies with their digital brethren is another tightening of that control.

There's more at the link.

As if to echo that warning, we learn that Brazil's CBDC is explicitly designed to exercise control over citizens' accounts and money.

In a disquieting discovery, the Brazilian Central Bank Digital Currency (CBDC) is reportedly designed with a feature enabling the government to freeze user funds and adjust balances. The revelation emerged after Pedro Magalhaes, a prominent blockchain developer and founder of Iora Labs, managed to decode the underlying technical details of the CBDC.

Magalhaes analyzed the Application Programming Interface (API), available on the monetary authority’s Github account. His finding spotlighted a potential, controversial control lever for the Brazilian government, yet there has been an ominous silence from officials in response to his discovery.

Again, more at the link.

Journalist Vini Barbosa confirmed Magalhaes' report via Twitter.

The Central Bank confirmed its plans to keep the functions that allow the monetary authority and authorized entities to freeze user accounts, decrease targeted addresses balances, arrest, and mint new units of the digital currency (CBDC).

If you think there's a noble, honest, upright reason for any Central Bank to want to "freeze user accounts, decrease ... balances, arrest" and all that, I'd like to hear it.  To me, the only possible reason is to exercise control over citizens, whether they like it or not.  No central authority can do that if we're paying in cash - but they sure can if they prevent us from using cash, and force us to use a digital currency under their control.

"Oh," you say, "but we'll just keep drawing out our money from the banks in cash, and paying that way."  Sure, provided that cash is still available.  There's literally nothing stopping a central bank, with authority over a nation's currency, from issuing a decree to all the banks in that country to stop allowing cash withdrawals.  There's nothing stopping that central bank from decreeing that all physical currency must be deposited into bank accounts by a certain date, after which its use will be declared illegal, and it will officially become worthless.

I deeply distrust CBDC's.  They're great for central banks, and great for control freaks.  They're not so great for the rest of us, who want to retain as much freedom of action as possible, and have our financial transactions tracked as little as possible.

Peter