CBDC What Are They Really Hiding?
Cryptocurrencies, originally, were created with a clear objective: to serve as an alternative to the system financial tradition and give ordinary people back their financial freedom. Without interventions from governments, banks or regulatory entities.
The undeniable progress in the adoption of cryptocurrencies throughout the world has alerted state and private organizations, which see how large flows of money escape their control, without knowing how, where or what it is being used for. . For this reason, governments are beginning to develop their own “cryptocurrencies”, backed by central banks, CBDCs. All with the approval of traditional banking, which finds in cryptocurrencies a real threat to its own existence and usefulness.
According to those behind their creation, CBDCs will serve to facilitate transactions, democratize finances, and reduce the risks associated with the use of classic cryptocurrencies. However, we must not deceive ourselves. state digital currencies are not how they wanted to sell them.
Behind this apparent security screen behind which governments have wanted to hide them, CBDCs seek to regain control of the finances of citizens, who had found in cryptocurrencies a quick, easy and low-cost system to spend and invest their money. Now, it will be the central banks that issue the digital currencies, approving / rejecting transactions and, mainly, imposing limitations on their use that will mean a loss of individual freedom.
In its essence, cryptocurrencies cannot be blocked by centralized organizations, since the blockchain allows transactions through a democratic consensus system in which users cannot be discriminated against, this translates into greater personal sovereignty. In addition, these are fast and free of all the usual bureaucratic process that usually occurs for any cross-border movement of money, in which banks and governments intervene, each taking a piece of the pie.
With CBDCs all the benefits are gone. We return to state control, to excessive taxes, to long bureaucratic processes and, above all, to greater control than the traditional system could impose. So what is the real contribution of central bank currencies to modern finance? None. Even if they want you to believe otherwise.
In a blog postthe former CEO of BitMex, Arthur Hayes, said that:
“For us citizens, CBDCs represent a frontal attack on our ability to have sovereignty over honest transactions between us. For the government, it is the most perfect tool to modify the behavior of its subjects.…”
Some Cases Around the World
The development of CBDCs is at different stages in various countries. Although we can already see evidence that the restrictions we mentioned will be an essential part of the new state digital currencies.
In this sense, it is no coincidence that there been China one of the first interested in developing and launching its own CBDC. Being a country that dedicates a large amount of resources to control every aspect of the life of its citizens, from the social to the economic part. Now being able, for example, to limit, if they wish, the transactions that dissident groups can carry out.
For its part, the European Union is working hard on the creation of a Digital Euro. Although it is another case that clearly shows the true intentions behind CBDCs. According to Fabio Panetta, a member of the Board of Directors of the European Central Bank, the new currency could have strong limitations both in the maximum amount that can be had, and in the maximum transaction amounts. While he said the figures are not yet final, they could be as low as €3,000 and €1,000, respectively.
The US is also beginning to investigate its own CBDC, in a plan known as “hamilton project” from the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology Digital Currency Initiative. Although there are still no more details about its progress, much less an exact date for its launch.
Not All That Glitters Is Gold, Not All Digital Currency Is Cryptocurrency
Despite the fact that many experts in the field have assured that the currencies of central banks are a threat to the financial freedom of citizensothers (apparently more subservient) have said that these They do not represent any threat to the crypto ecosystem.
Such is the case of Changpeng “CZ” Zhao, CEO of the world’s leading cryptocurrency exchange, Binance, who recently said at the conference Web Summit in Lisbon,
“Central bank plans to launch digital currencies are not a threat to other cryptocurrencies as they would validate blockchain technology and build trust among skeptics”. In addition to stating thatthe more (digital currencies) let’s have, better”.
It is somewhat curious to see how CZ’s position changed, who had expressed a completely different opinion on the subject a year ago. In an interview with Bloomberg from May 2021, the Binance CEO had said that,
“CBDCs would never provide the freedom of cryptocurrencies like Bitcoin and Ethereum“, and that “Most central bank digital currencies are going to have a lot of control tied to them”.
Why this sudden change of mind from CZ? Does it have something to do with its increasing rapprochement with regulators around the world and the fact that it is receiving licenses to operate in more countries? As minimum, looks suspicious. Notably, Binance, a centralized exchange, is openly collaborating with regulators through its KYC system, which many other exchanges are being pressured to implement.
For his part, Arthur Hayes also warned that the new CBDCs could represent the end of the possibility of buying cryptocurrencies.
“Capital controls are coming, and when all money is digital and certain transactions are not allowed, the ability to buy Bitcoin will quickly disappear”.
As we have seen, central bank currencies have a completely opposite goal to traditional cryptocurrencies. Its implementation would be a step back from everything that has been achieved since the beginning of Bitcoin. Limits, controls, possible censorship, taxes, are just some of the characteristics that are hidden within this “Trojan horse” called CBDC.