Central Bank Digital Currencies (CBDCs) are a hot topic right now. Central banks worldwide are working on developing and implementing these digital currencies. They promote them with promises like more efficient payment processes and financial inclusion. But behind these lofty goals lie massive risks to people’s freedom and privacy. This article highlights the major dangers posed by CBDCs and why we, as citizens, must resist them.
What are CBDCs?
CBDCs (Central Bank Digital Currencies) are digital currencies issued directly by central banks, either for wholesale or retail purposes. Wholesale CBDCs are mainly intended for banks and financial institutions, while retail CBDCs affect the entire population. They can exist either as account-based currencies or as digital tokens.
However, unlike decentralized cryptocurrencies like Bitcoin or Infinity Economics, CBDCs are in complete opposition to the idea of decentralization. They are entirely under the control of the issuing central banks and therefore represent a powerful instrument for surveillance and manipulation of the population.
Why are CBDCs so dangerous?
There are several reasons why the introduction of CBDCs poses massive threats to the freedom and privacy of individuals. The biggest risks are:
1. Total surveillance and loss of financial privacy
One of the biggest dangers of CBDCs is that they make every financial transaction traceable. With cash transactions, it is impossible to know who receives money from whom. With a digital central bank currency, this anonymity is eliminated. Every transaction is monitored, and it is clear who bought or paid for what and when. This enables comprehensive surveillance of the entire population.
In a dystopian future, such data could be used to judge people based on their consumption behavior. The Chinese social credit score is a shocking example of how surveillance technologies can be used to control and manipulate the population.
2. Programmability of the currency and restriction of its use
CBDCs are programmable. This means that governments or central banks can dictate what the digital money can be used for and what it cannot. For example, they could prevent certain products or services from being purchased. They could even impose expiration dates on balances to ensure that money is spent within a certain period.
Particularly problematic is that governments could use this control to exclude politically undesirable individuals from participating in the financial system. Those who criticize government policies or fail to comply with the will of the powerful could quickly find themselves economically disadvantaged or completely excluded from public life.
3. Compulsory introduction of digital IDs
To use CBDCs in retail, it will effectively be necessary for every citizen to have a digital ID. This digital identity will be directly linked to the CBDC account, meaning every financial transaction will also involve a verification of personal identity. This creates a comprehensive surveillance network that tracks every person and their financial transactions.
The concept of digital ID combined with CBDCs inevitably leads to a vast, centralized surveillance system that severely limits citizens' freedom.
4. Centralized control of the financial system
Since CBDCs are issued directly by central banks, financial power is centralized with the state and its central bank. This presents an enormous danger, as such centralization of financial power increases control over the lives of individuals. This is in stark contrast to the principles of decentralization, as represented by blockchain technologies like Infinity Economics or Bitcoin.
The introduction of CBDCs represents a significant regression in this context. While decentralized cryptocurrencies aim to distribute financial power to individuals, creating more freedom and autonomy, CBDCs achieve the exact opposite.
Global efforts to introduce CBDCs
The plan to introduce CBDCs is being coordinated worldwide. At the forefront of this agenda are powerful institutions like the Bank for International Settlements (BIS) and the Atlantic Council. These institutions work closely with central banks to push CBDCs globally.
According to a BIS survey, 94% of the world's leading central banks are currently exploring the introduction of CBDCs, and 69 countries are already in an advanced stage of development. Almost all major economies – from the USA and the Eurozone to China and Russia – are actively working on CBDCs. Even in smaller countries like Switzerland, Sweden, Singapore, or Brazil, development is progressing.
It is expected that by 2030, nearly all central banks worldwide will have introduced CBDCs. This global implementation not only means the centralization of power within individual countries but also increasing cross-border collaboration between central banks. In the future, CBDCs will be linked in a global network, enabling surveillance and control across national borders.
Resistance to CBDCs
Despite the massive efforts to introduce CBDCs, resistance is emerging in some countries. In the USA, in particular, there are voices speaking out against the introduction of a digital dollar. In May 2024, the US House of Representatives passed a law prohibiting the Treasury from introducing a digital dollar without explicit approval from Congress. This "CBDC Anti-Surveillance State Act" was primarily supported by Republican politicians and aims to protect citizens' financial privacy.
In other countries, such as Germany or the UK, there are concerns about whether the introduction of CBDCs is compatible with the values of a free and democratic society. Public discussions about the dangers of CBDCs are increasing, but many people are still unaware of the significance of this development.
Alternatives to CBDCs: Decentralized Blockchain Technologies
Unlike CBDCs, decentralized cryptocurrencies like Infinity Economics or Bitcoin offer a real alternative. These currencies are not controlled by governments or central banks and provide users with more freedom and independence. The decentralized structure prevents a central authority from controlling the financial system.
Decentralized blockchains allow users to control their own financial transactions without sacrificing their privacy. They are the antithesis of CBDCs, which focus on centralization, surveillance, and control.
Infinity Economics, one of the most promising blockchain platforms, not only offers a decentralized currency but also a comprehensive platform for smart contracts and other applications. In contrast to CBDCs, freedom, transparency, and decentralization are at the forefront here.
Conclusion: CBDCs threaten our freedom
The introduction of CBDCs may seem like a technological advancement at first glance, but upon closer inspection, the massive dangers posed by these digital currencies become apparent. From total surveillance to programmable control and centralization of power with central banks, CBDCs represent a serious threat to the freedom and privacy of individuals.
It is up to us as citizens to remain vigilant and resist the introduction of CBDCs. Decentralized blockchain technologies offer a real alternative and allow us to regain control over our financial system. It is time to stand up for freedom, decentralization, and self-determination – before it is too late.
