CBDCs & the Death of Freedom
- Bitcoin Brunch
- Oct 26, 2024
- 8 min read
Updated: Dec 2, 2024
Worldwide initiatives are under way exploring the potential for CBDCs. Numerous government central banks are currently researching, launching trials and developing a Central Bank Digital Currency. Other government leaders have committed to not implement CBDCs, including President Trump who recently announced and vows to "never allow the creation of a Central Bank Digital Currency."
According to the CBDC tracker (an initiative by the HRF), there are over 125 jurisdictions currently piloting or launching CBDCs. China, Russia, India, the Bahamas and Iran and others have already launched a CBDC. The United States, France, Spain, Germany, Italy, Brazil, Saudi Arabia and many more are currently in a CBDC pilot stage. While many others like Canada, Peru, Mexico, Austria, the United Kingdom, Greece are in a CBDC research phase.
If a CBDC is established, cash will disappear. Already, governments, banks and businesses restrict our use of cash by limiting the amounts of cash we can withdraw or transfer. Some businesses no longer accept cash and favor credit cards or mobile pay while others discourage cash payments with longer lines or additional fees. The EU now limits cash transactions to under €1,000 and any transaction above that limit is illegal. These limitations cunningly force citizens down a neatly tailored pathway toward CBDCs.
In a Joe Rogan Video No.844, Andreas Antonopoulos suggests — Do we want a society where, "our digital money is under complete surveillance and complete control?." Already, banks and corporations have access to our private lives, transactions and purchases. But it is not wholly interconnected and in theory, we can rescind an institution's access if we do not like the way they handle our information or conduct business.
Imagine where every transaction you make, every purchase, every spend, everywhere you go, every business you interact with, every doctor payment, every school payment, every neighbor payment, babysitter, lawn care, coffee, restaurant visit, car rental, Uber drive, airfare, hotel, cigarette, medicine, nail polish, tampon, condom, and margarita purchase is accounted for, tracked and surveilled by the government. CBDCs will enable the government to have access to every transaction of your life.
In a digital world, your transactions are your voice. In a digitally connected world, your transactions are your identity. Your transactions are your vehicle into and out of every event, every store, every location, every group, every activity, every social organization, and every political affiliation. Your transactions acknowledge and identify you across every sphere you choose to interact with. Do you want a toll booth or hallway monitor at every threshold you choose to enter throughout your whole life?
Are You Ready for REDI?
The International Monetary Fund recently deployed their REDI campaign — Regulation, Education, Design & Deployment, Incentives — which is a framework to advance mass CBDC adoption. The REDI framework begins with Regulation by setting standards and regulating the players who can participate which may include banks as well as nonbank entities. I can imagine partnerships with health care or strategic retailers like grocery stores for convenient onboarding.
"firstly, the determination of who should be granted entry, and secondly, whether this entry should be mandated or left to the discretion of the entities involved." — excerpt from IMF FinTech Notes "Central Bank Digital Currency Adoption"
The next area deals with Education and how to reach consumers by tailoring messages to specific groups, utilizing public relation firms and leveraging creative influencers. They specify best ways to reach various targeted groups and aim to offset fears of privacy while highlighting CBDCs safety and convenience.
Then the REDI framework introduces the Design and Deployment of the CBDC where they explore ways to broaden usage by incorporating programmable payments and other convenience features. They evaluate ways to build trust by deploying various entry points with optional levels for sharing private information, while ensuring security and interoperability with current payment systems. As well, they discuss ways to integrate into third-party apps and platforms where they can optimize the tracking of sales trends and inventory in real-time.
Lastly, the REDI framework looks at how to provide Incentives to onboard consumers, banks and other intermediaries. They discuss how one might provide tax incentives for development costs to institutions who integrate the CBDCs or waiving fees to enhance adoption by institutions. They outline ways to incentivize consumer adoption through airdrop lotteries, merchant discounts, or loyalty points.
Can you imagine the excitement of getting airdropped 500 extra loyalty points for paying your federal taxes early? Or the comfort one would feel by having your transactions added to a real-time database of pregnancy kit purchases? Perhaps, they will even make a live ticker chart for all CBDC users who spent the most that day or donated the most loyalty points to the global charity of the day? I imagine Covid-like graphic bulletins will be deployed to aid adoption playing into fears and feelings of being excluded.
Imagine the graphic above, but instead of "Tracking Our Covid Response" imagine a nightly news chart — "Tracking Our CBDC Participation".
Green is group 🦅 CBDC Eagle, 500 loyalty points for all registered residents.
Yellow is group 🗽 CBDC Liberty, no fees for one month for all registered residents.
Red is group 🇺🇸 CBDC Spirit, ten residents per day will be airdropped 1000 CBDC loyalty points for registering.
Dark Red is group 🦃 CBDC Turkey, every neighbor who helps register another neighbor will get 500 CBDC loyalty points.
A campaign for CBDCs may well be the gamification of onboarding the masses towards the complete surrender of human freedom.
In today's fast-paced world of continuous data feed and pinging notifications, sometimes we just break down from the annoying pestilence of technology and give up from mere weariness. If we're not vigilant, our privacy and freedoms many not be forcibly seized from us, but may be gradually and discreetly killed by convenience.
What is the difference between a Stablecoin, Bitcoin and CBDC?
Both stablecoins and CBDCs are digital tokens serving as currency. As everything around us transforms from tangible form into digital form, stablecoins represent the tokenization of our paper money into digital form as our phones and devices become the intercept between transactions. Stablecoins are backed 1:1 to an underlying asset which could be any asset, but typically a fiat currency like the USD and thus pegged to the value of the asset held in reserves.
A stablecoin is somewhat decentralized, although they are still managed by a single entity in the private sector. A privately issued stablecoin allows for instant processing and low-fee transactions acting as a temporary store of value within the cryptocurrency system. This seems useful, but one caveat with a stablecoin would be a scenario where a government partners with a private institution to develop a decentralized stablecoin that later morphs into a CBDC where the government has full access and control over the currency.
Bitcoin is not a stablecoin and will never be one. Bitcoin is completely decentralized across millions of independent nodes and not pegged to any underlying asset. Bitcoin was created as an alternative to fiat currency and is a decentralized currency in digital form. Bitcoin is different. Bitcoin is the asset and its value is determined by the market, fluctuating with supply and demand. Unlike both stablecoins and CBDCs, Bitcoin's supply is fixed, it can never be devalued and anyone can use it without anyone's permission.
A CBDC is a government issued digital token. A CBDC is most similar to a stablecoin, but instead of being pegged to any underlying asset, it is digital currency acting as the official digital fiat of a government or country. A CBDC is absolutely centralized, issued and controlled by the government. CBDCs are not pegged to anything and can be increased in number at any time, completely affecting the value of the currency.
In a nutshell, a CBDC is:
Centralized - owned and managed by an institution or government
Governed - controlled and provided by the government
Closed System - you are granted access and must ask permission
Unlimited Supply - can be increased and devalue your money
Censorable - if what you say or do is not liked, you can be debanked
Whereas, Bitcoin is:
Decentralized - owned by no one with power spread across millions of individual nodes
Independent - controlled by no one and provided by the market
Open System - no barriers to enter and don't need to ask anyone or be a member of any institution
Finite Supply - there are only and ever will be 21 million Bitcoin
Censorship Resistant - can't be debanked or cutoff because you have different opinion or beliefs
Through a government controlled centralized system, CBDCs result in an immense invasion of the individual's freedom. With all of your transactions supervised by a centralized network, your identity, your finances, and your digital voice can be tracked and surveilled.
A centralized system is also at greater risk for malicious hacks of private information. When data is stored on one central server, then large swaths of private data can be accessed via one entry point, as opposed to a decentralized system with data held across thousands of distribution points. Today, we see examples of government and private institution records being hacked on a daily and weekly basis. Most recently, Fidelity confirmed thousands of their customer records and personal information was hacked. In a large centralized network, a coordinated attack or hack by a nefarious agent could potentially gain access to every transaction and the private information of all the citizens of a country.
If a CBDC is enacted, all personal financial records will be on government databases completely removing the already-thin veil between third-party bank institutions and customer privacy. Government will have full access to your activities, purchases, relationships, political and religious affiliations. If you disagree with a party or critique an institution, you can be penalized financially, cutoff access or even have your assets seized for expressing particular views or being part of specified groups.
In our currently conflicted world, we already see corporations excluding or blocking accounts of individuals who voice opinions which some deem dangerous. Some platforms block people from spreading "misinformation" and "disinformation" — which are just newfangled terms for 'mistakes' and 'lies'. Some institutions want to create committees who approve what words, thoughts or ideas are appropriate or constitute 'misinformation' or 'disinformation'. Who will be in charge of what you are allowed to say or what offends someone?
If a government has complete control of a currency and surveillance of your transactions, what is to prevent them from freezing access or seizing funds of dissidents or whistleblowers who expose any government corruption. Who will be involved in the implementation, planning, oversight and storage of a CBDC? All of the parties involved and their employees become an access point for corruption and back-door favors. A CBDC would decrease privacy and increase government control across every aspect of our lives.
A CBDC is in complete opposition to Bitcoin. The pathway to a Central Bank Digital Currency leads to an end with the complete loss of freedom of an individual's privacy, identity and voice. In a digital world, your transactions are your voice, your transactions are your identity. Bitcoin is more than a monetary system, it is a freedom protocol that protects your privacy by protecting your transactions.
Bitcoin preserves your privacy in a digitally interconnected future. Bitcoin does not exclude anyone from participating and enables person-to-person transactions outside of a centrally controlled and surveilled monetary system. Bitcoin gives you the opportunity to speak and act freely. Bitcoin ensures your freedom to live, freedom to transact, and freedom to speak without retribution.
The right to agree with others in not a problem in any society; it is the right to disagree that is crucial. It is the institution of private property that protects and implements the right to disagree…" — Ayn Rand
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For more detailed information about this topic, see
@HRF CBCD Tracker
