Posted 2 years ago | by Ben Armstrong
Central banks all over the world are working on digital currencies, some of which involve blockchain, but these new Central Bank Digital Currencies (CBDCs) aren't anything new – nor will they address the issues at the core of the fiat currency system.
To begin with, fiat currency is already digital. Technically it is debt that has been fed into the fractional reserve system where it is leveraged up via lending activities, but in reality, digital fiat currency is created at a whim for whatever reason the government or banks can think up.
So...it would appear that the idea of CBDCs is redundant.
What we may be talking about, depending on the central bank, is a fully fiat currency that has no backing whatsoever, and can be created or destroyed with a few keystrokes (more or less the way it works now, but less complex).
This Will End in Tears
For anyone that has been paying attention to monetary policy over the last 20 years, it isn't hard to see why central banks would like to have a fiat currency that they can do with what they please. The last few months have shown how wild central banks get when asset prices are threatened, so digital magic currency is a pretty easy sell.
Because most people (nearly all) have no idea how money works, central banks and governments can sell the masses on a 'new' kind of digital money – that is just like Bitcoin, you know...the thing that made a few people rich!
Unlike decentralized assets, the new CBDCs will simply be an extension of the existing system, with added surveillance that will allow the government and banking system to raid personal privacy in a way that Big Brother could have only dreamed of.
It should come as no surprise that the global leader in the nightmarish monetary system described above is China, which is working on not only a dog $#&% garbage CBDC, but a blockchain ecosystem that will help the CCP to gain even more control over the day-to-day lives of its prisoners (sometimes called 'citizens').
Don't Fall for CBDC BS
Unless you want to use one of the worst monetary systems imaginable, it would probably be a good idea to steer clear of CBDCs. The new tokens that central banks will be highly centralized, and won't offer any of the advantages that cryptos already deliver.
CBDC won't be private, limited in quantity, and are guaranteed to be plugged into the state surveillance apparatus. If you want to give up all your control, and data, CBDC are probably a great way to go.
If you have a brain in your head, you will see that real ownership of your assets is a good idea, and cryptos are one of the only assets on the planet that allow you to control stateless money that isn't easy to control.