CBDCs, The End of Financial Freedom 

Central bank digital currencies have received a lot of attention in the last year, and rightly so. While governments push for new financial systems, many people are left wondering how they will be affected and why it matters.

What Are CBDCs? 

CBDC stands for Central Bank Digital Currency. All it is, is a fancy sounding virtual currency. More specifically, its a virtual version of the fiat currency already in place. When China talks about a CBDC, they are referencing a digital yuan. 

CBDCs offer deeper control for the central bank over our monetary policy and risk the possibility of government over-reach. Imagine no longer having physical dollars, with the only capital you can access being online. 

Nations around the world started experimenting with these digital currencies around the beginning of the COVID-19 pandemic. An excuse to go digital for offices and employees soon turned into a reason to implement CBDCs worldwide. 

CBDCs vs Traditional Money 

Similar to traditional money, CBDCs are not backed by anything. Many in the crypto space hold the belief that “fiat”, or traditional money, is actually worthless. In the decentralized space the general sentiment is that fiat is not based on anything, whereas something like Bitcoin is based on sound economics. 

Technically speaking, in the United States, money is held and distributed by banks. This means your account is with a private financial institution, technically. The word technically is included due to the relationship banks have with the government, and the government being willing to bail them out. This means that the United States government does not control money, the bank does.

CBDCs would still be managed by the central bank and would function similarly to fiat currency. Central Bank Digital Currencies raise the same risks as traditional money, if not more.

How Will CBDCs Negatively Impact Me?

The major issue with CBDCs is the control it would give the government and higher financial powers. This is one of the most serious problems people have with traditional money, and it is exacerbated tenfold by central bank-issued digital currencies.

CBDCs allow for complete control over our financial freedoms and present the opportunity for manipulation and malicious actions. These digital currencies, when they become the societal norm, can be easily frozen with the push of a button. CBDCs will make it easier to inject new capital into the current supply and could push inflation higher as well. 

CBDCs will also allow the government to see every single dollar, coming or going from your account. Every penny will be accounted for and they will see every transaction. Many folks think “but I’m not doing anything illegal”, that is not the point. Do you want someone watching over your every move? Do you want someone else having control of the money you worked your whole life to save?

The control the government is seeking should be intimidating to any citizen, no matter what. Remember that the supreme court of Canada, the US’s neighbor to the north, actually started freezing bank accounts of peaceful protestors. Truckers peacefully protested a COVID law and in return the country they pay taxes and reside in decided to lock them out of their bank accounts, their retirement accounts and investment accounts. Do not be naive enough to believe that your government wouldn’t do the same thing. Have control over your capital, do not risk it. 

The Bank of England recently announced that at the end of September, 20 and 50 euro bills will no longer be legal tender. Everyone is being encouraged to turn these bills into the bank prior to the date, or they will no longer be accepted anywhere. This is a major push towards the use of their own CBDC, slowly removing paper money from circulation. 

Why Central Bank Digital Currencies?

Convenience is the only reason for CBDCs on the consumer side of things. The government wants control over capital and financial transactions and only offers convenience as a reason. With the amount of people using Venmo, Paypal, Apple Wallet and other financial services for transactions, the switch to digital currencies will not be a shock to the world and will more than likely seamlessly integrate with our current financial system. This will happen similar to businesses already accepting Apple Pay.

CBDCs will be very bad for the regular person, giving the government further control over our every day lives. 

A twitter user by the name @Punk6529 wrote an amazing (and extensive) thread detailing these digital currencies that I highly recommend spending time reading.  If your looking for more of the best Twitter accounts in the blockchain and crypto space, check out this article. 

CBDCs present one of the biggest reasons that digital assets and decentralized cryptocurrencies are 100% necessary for a prosperous future, without government over-reach. 

For media, content or writing inquiries please contact Patrick Hagerty at PatrickJHags@gmail.com

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