CBDC? Oh No!
The last time I wrote about Central Bank Digital Currencies (CBDC) (see Hey Brother Can You Spare a Dime) the US was about to embark on a CBDC experiment.
Well, now we’re a lot closer to the implementation of a CBDC right here in the U. S. of A. Last month the Federal Reserve announced the launch of its “FedNow” real-time payment system. This system will let banks offer customers instantly available funds and execute real-time payments. Critics, however, are raising questions about the ability to use this system for surveillance.
“So what?” you say. “I already pay most of my bills electronically. My pension and payroll automatically appear in my checking. What’s not to like?”
Plenty.
What a digital currency gives the government is the ability to track and possibly control all spending.
In order to fully implement a CBDC the government must eliminate cash. To the government, cash is an evil that lets citizens cheat on taxes and conduct illegal activities. Think that doesn’t happen? Ask your plumber what that job will cost if you pay in crisp Benjamins. If you’ve never done this before, you’ll be surprised. That $1,000 job might be $600 in cash. With digital currency, discounts for cash won’t be possible.
Lend $500 to your buddy who pays you back $100 a month? How do you prove that the payments aren’t income to you? And how does your buddy prove the $500 wasn’t payment for work?
Do you run a little side business? Sell crafts or do handyman work? Suddenly all the payments you receive are known to Uncle Sam and can be taxed.
Do you grow pot (you know who you are!)? How do you explain all those $200 payments when your customers buy an ounce of weed?
And if the income side isn’t scary enough, the spending side is pretty bad too.
With the government’s push for us to drive electric cars, it’s not too much of a stretch to believe that if you spend more than X on gas in a month that your gas purchases could be limited for the rest of the month. Or you’re buying beef? No, you need to change your diet. Eat bugs anyone?
Think the US government won’t eliminate cash? It’s already beginning in Nigeria. Additionally, while Sweden, China and the UK haven’t officially eliminated cash, they have been actively encouraging their citizens to use credit and debit cards. In fact, in Sweden only 2% of their transactions are made in cash.
Social change by limiting or controlling transactions sounds pretty farfetched? The future is here today. Last year the International Organization for Standardization (ISO), based in Geneva, added a new transaction code for firearms and ammunition. Based on that code some credit card companies declined transactions. Now I’m not citing this because the transactions were for guns, but to demonstrate how easy it is for a card company (or the government) to control what you spend your money on. And, if there is no cash in use, the CBDC will be the only game in town.
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Believe me, a CBDC in the US is not going to happen anytime in the next year or two but likely will happen in this decade.
Some are trying to rein in plans by government to force a CBDC on its citizens. The CBDC Anti-Surveillance State Act was introduced in Congress this past February to prevent the creation of a US CBDC via executive order. In March 2022 an executive order was used to request that the Federal Reserve continue its ongoing CBDC research, experimentation, and evaluation to determine the benefits and risks of a digital dollar.
According to United States Representative Tom Emmer: "As the federal government seeks to maintain and expand financial control to which it has grown accustomed, the idea of the central bank digital currency has gained traction within the institutions of power in the United States as a government-controlled programmable money that can be easily weaponized into a surveillance tool.”
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Some may think that CBDCs are in tinfoil hat territory. But as governments around the world want to control their citizens for political, social or environmental reasons, CBDCs will become commonplace in the years to come.
We, as citizens who have a right to privacy, must be vigilant to ensure that our government doesn’t create something that denies us that right.
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“Life is too short to waste any amount of time on wondering what other people think about you. In the first place, if they had better things going on in their lives, they wouldn't have the time to sit around and talk about you. What's important to me is not others' opinions of me, but what's important to me is my opinion of myself.” — C. JoyBell C.
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Ya Gotta Love Ducklings!
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