This incompatibility was recognised by none other than former director of the FBI James Comey who was very upset by the fact that end to end encrypted messaging apps existed that the FBI could not access. He explicitly said in 2015 that, that's a problem with democracy.

What we're seeing is a consolidation by the state away from democratic governance, the expectation, continued expectation of democratic governance on the part of the people, and these incommensurate points of view are not in dialogue with one another.

In the context of banking and CBDCs, this consolidation of state authority is represented most clearly by the blurring of the distinction between central and commercial banks.

Central banks have commitments to back-stopping customer deposits. If central banks are put into competition with commercial banks for deposits, modelling has shown for example by the Philadelphia Fed, that consumers will overwhelmingly prefer the central banks and will gravitate to central banks over time.

This is why most CBDC designs have this fig leaf of separation between central and commercial banks where there are wholesale CBDCs and not retail CBDCs.

However, in practise this really is nothing more than a fig leaf because ultimately the retail CBDC accounts that will be managed by commercial banks will still be totally subject to central banks and targeted monetary policy.