Central Bank Digital Currencies

A Central Bank Digital Currency (CBDC) is a digital form of a national currency that is issued and backed by a central bank. It is a new type of digital payment instrument that represents a liability of the central bank and is considered legal tender. CBDCs are designed to function similarly to physical cash, but in digital form, with the added benefits of faster transactions, reduced costs, and increased efficiency.

CBDCs are different from cryptocurrencies like Bitcoin because they are issued and backed by central banks, whereas cryptocurrencies are typically decentralized and not backed by any central authority, they are backed and valued by the free market. CBDCs are also designed to be used as a means of payment and settlement in the same way as cash, whereas cryptocurrencies are often used as a speculative investment, although they are also used as payment and this use and ease of payment is continually growing.

There are two main types of CBDCs: wholesale CBDCs and retail CBDCs. Wholesale CBDCs are designed for use between financial institutions, such as central banks, commercial banks, and other financial institutions, for the settlement of large-value transactions. Retail CBDCs, on the other hand, are designed for use by the general public as a means of payment and store of value, retail CBDCs could have different rules than wholesale CBDCs, programmed into them.

The implementation of CBDCs has the potential to revolutionize the way we make payments and conduct financial transactions, offering faster, cheaper, and more efficient payment systems. However, there are also concerns about the potential risks and negative impacts of CBDCs, such as loss of privacy, cyber risks, and financial exclusion, which must be carefully considered by policymakers and central banks.

Therefore, the success of CBDCs will depend on how well they are designed and implemented, with careful consideration given to these potential risks and negative impacts. It is important that policymakers and central banks take a thoughtful and cautious approach to CBDCs to ensure that they are developed in a way that maximizes the benefits and minimizes the potential downsides.

CBDCs will be used for ‘control,’ ECB president (convicted criminal) Christine Lagarde admits in video chat with fake Zelensky.

It is important to note that the risks below are not inevitable and can be mitigated through appropriate policies and regulations. However, they do highlight the potential risks associated with CBDCs and the need for careful consideration of the potential downsides when designing and implementing these digital currencies.

Do you trust your government and the central bankers enough to ensure CBDCs are being implemented to help you?

Or based on what you know, and have learned on this site, maybe they are being implemented to help THEM at your expense, loss of physical freedoms and loss of financial control.

Potential risks of CBDCs is that they could be used to infringe on individual privacy and potentially enable financial surveillance or control. Here are some examples of how CBDCs could be used to control people’s freedom:

Tracking Transactions: CBDCs could enable central authorities to track and monitor individual transactions, potentially allowing governments to gain access to sensitive financial information and monitor the behavior of individuals or groups.

Limiting Transaction Size: CBDCs could be designed with transaction limits or other restrictions that could limit individual financial freedom and potentially enable governments to control the flow of funds and restrict certain types of transactions.

Enabling Negative Interest Rates: CBDCs could be used to implement negative interest rates or other forms of monetary policy that could penalize savers and potentially encourage spending, potentially limiting individual financial freedom.

Allowing Government Control: CBDCs could potentially enable central authorities to control the flow of funds and restrict access to certain types of financial services, potentially limiting individual financial freedom and access to capital.

Exploiting Vulnerable Populations: CBDCs could potentially be used to exploit vulnerable populations, such as those with limited financial literacy or those living in poverty. Governments or other organizations could potentially use CBDCs to incentivize or penalize certain behaviors, potentially leading to exploitative practices that limit individual financial freedom.

Restricting Access to Funds: CBDCs could be used to restrict access to funds in certain circumstances, such as during a financial crisis or emergency. While such restrictions could be necessary in certain situations, they could also limit individual financial freedom and potentially lead to abuse by governments or other organizations.

Implementing Social Credit Systems: CBDCs could be used to implement social credit systems, which assign individuals a score based on their behavior, potentially limiting their access to financial services or other resources. Such systems have been implemented in China, where individuals with low scores have been restricted from accessing certain services or traveling.

Enabling Financial Repression: CBDCs could potentially be used to implement financial repression, which refers to policies designed to channel funds into government debt or other low-yield assets. Financial repression could limit individual financial freedom by reducing the returns on savings and potentially forcing individuals to invest in low-yield assets.

Creating a Digital Divide: If CBDCs are not accessible to all individuals, they could create a digital divide that limits access to financial services and potentially perpetuates existing inequalities. It is important that CBDCs are designed in a way that promotes financial inclusion and ensures that all individuals have access to these digital currencies.

Loss of Privacy: CBDCs could make it easier for governments to monitor and track people’s financial transactions, potentially infringing on people’s privacy. Unlike cash, which can be used anonymously, CBDC transactions would be recorded on a centralized ledger, making it easier to trace the flow of money.

Cybersecurity Risks: CBDCs could be vulnerable to hacking and cyber attacks, potentially leading to financial loss for individuals and businesses.

Financial Exclusion: People who do not have access to digital devices or the internet may be excluded from using CBDCs, creating a digital divide that could exacerbate existing social and economic inequalities.

Increased Centralization: CBDCs could increase the centralization of financial power in the hands of governments and central banks, potentially reducing the role of commercial banks and other financial intermediaries.

Loss of Interest Income: CBDCs may not pay interest to users, meaning that individuals who rely on interest income from savings accounts may be negatively impacted.

Limited Anonymity: CBDCs may not offer the same level of anonymity that cash provides, which could make it easier for governments or other entities to track individuals’ financial transactions.

Financial System Instability: CBDCs could disrupt the existing financial system by shifting the balance of power between different financial actors. This could potentially lead to financial instability and systemic risks.

Loss of Autonomy: CBDCs may lead to greater government control over the financial system and individuals’ financial decisions. This could limit individual autonomy and potentially lead to abuse of power.

Implementation Costs: The development and implementation of CBDCs could be costly, and these costs may be passed on to taxpayers or users of the currency.

Adoption Challenges: CBDCs may face challenges in adoption and acceptance, especially if they require significant changes to existing financial infrastructure and consumer behavior.

Technological Risks: CBDCs could be vulnerable to technological risks such as system failures or data breaches, which could potentially lead to financial losses for individuals and businesses.

Economic Disruption: CBDCs could disrupt existing economic systems and traditional banking models, potentially leading to job losses and other economic challenges.

Dependence on Central Authorities: CBDCs would be entirely controlled by central authorities, which could lead to concerns around censorship, censorship-resistance, and corruption.

Regulatory Issues: CBDCs may face regulatory challenges, particularly if they are used across borders, which could create confusion and conflicts between different regulatory regimes.

Lack of Diversity: If CBDCs become the dominant form of currency, there may be a lack of diversity in the financial system, potentially limiting innovation and competition. 

It looks like we are being pushed into CBDCs, like them or not. Maybe it’s time to ensure you have some of your wealth and savings outside of this system before it’s too late.