When it's digitally created by the central bank, it gives total control to the central bank.
The threat is not that it's digital, we already have that. It's that it becomes programmable with it.
Imagine a money whereby your access to it can be turned off. Where negative interest rates can be issued instantly and personally to individuals based on behaviour.
It's a totalitarian's wet dream and Bitcoin is the antithesis.
Everything you said that i should imagine is ether happening (turned off by some programmed in triggers etc) or easy to do with current digital euro. We already live what you are afraid of. And thats what throws me off, nothing changes. They currently have all tools to be as evil as it gets and "digital euro" wont give em more. It might give them different tools but nothing they can not do right now if they wanted
Thanks for your reply, but I'm not sure I agree.
Negative interest rates for example. It's true that they could be employed now. But this would be through commercial banks. If this happened, people would rush to withdraw their money, a run on the banks. Through a CBDC, the commercial banks would be disintermediated. The policy would be set and implemented by the central bank directly.
It's true that there's already a net surrounding us, but CBDCs allow that net to be tightened further. For what it's worth, I don't particularly fear this, as I think attempts to employ it would push more people into Bitcoin. There are two systems we can choose from. A CBDC just makes the choice even more stark and obvious. It's an act of desperation from a failing system.
What would be different? You create negative interest rate and people start ditching your money for other currencies or forms of value. Is it implemented via commercial banks or central bank, all the same to us users.
I haven't seen SINGLE thing that CDBC could implement that can't be implemented currently with current digital currencies we all use (Euro, dollar etc.).
And i have to be clear, i do not want CDBC. I just think it's not way worse than shit we have right now. That's why i run from current Euro to Bitcoin whenever i have excess of Euros.
If CDBC makes coince obvious, i'm all for it. People should understand what kind of system they live in. This way, when everything is behind this and that, this is not good for us, citizens. We need sunlight on our currencies.
My take would be that commercial banks are gradually disintermediated. So, we don't all immediately have accounts directly issued by the central bank, but perhaps access via products issued by commercial banks at first.
If this happens, I'd say it's a decent bet that the end goal would be for everyone to have direct CBDC accounts with the central bank, perhaps on the premise of financial inclusion for everyone.
Once commercial banks lose their status, there's nothing between the customer and the central bank issuing and, most important, programming, the currency. They can then do what they want (link access, rates, privileges, to your social credit score).
Like I say, I'm not overly concerned either, but I think this is the gist of most people's fears.
I have feeling like people are afraid of lot of things without realizing that those things are already around us, that we already live in that reality. Like, state can, now, without a change, block whoever they want from financial system. They can do it based on whatever...social score or color of hair or whatever crazy thing you can imagine. Right now, no change in currency whatsoever. Just look at China. They have cash and stuff and still they created such crazy ass things and are limiting interaction with the system in so many different crazy ways.
And i just want to be clear as it might get lost in my posts, i do not support CBDC. I just don't think that it will make our lives worse, i think we are already there. I don't see bad things in the future, i see them around us now, i experienced them myself on my own family and my banking which was one of few big reasons why i threw myself into Bitcoin long (in Bitcoin time) time ago.
The point is that it greatly reduces the friction points to do so. Yes, it's true that governments can pressure commercial banks to restrict access, but a CBDC would eventually remove the intermediary and give them absolute control.
It's mission creep towards a system whereby the issuance, usage, access and activity are all under one umbrella.
I create web apps. Nothing special. One of my clients (for quiet many years now) is one bank (mid size european bank). Part of apps i create are apps that help them enforce ECB (European Central Bank) rules. I basically earn my living on implementing stuff that ECB pushes down their throat.
Saying that central banks can "pressure commercial banks" is extreme understatement. They do no "pressure" them.....that would mean that commercial banks have option not to do what is told when is told. You know, pressure can be withstand, you can resist to a pressure.
No....central banks simply tell them what exactly they have to do and how fast they have to do it. I earned more then few times extra money because projects were set up so that they have to be executed in really short period of time. Consequences for not doing as told are nuclear.
As someone who is close to it, i can say, central banks have absolute and direct power over absolutely everything as far as money goes.
Like in army, with generals and soldiers. Generals don't have to be at front line for soldiers to do exactly what they want em to do or be shot. Generals, like central banks, do not give proposals, they give strict orders with strict penalties.
It gives total transparency on what you earn and what you spend it on. Even if you lend money to a friend that would be visible - which isn’t necessarily the case with cash.
CBDC does not have effect on a cash. If they wanted, they would outlaw cash without CBDC and they could track money around in current sytem. If tracking money is a goal, they already can do it. They don't need CBDC for that.
Some EU countries are extremely low on cash transactions anyway and some are on their way to remove cash CBDC or not.
I must say again....i heard a lot of "they will" and "they could" scenarios and not a single one is something they can not do in current system.
Tracking, can
Programable money, can
Blocking you from spending, can
Setting arbitrary limits for whatever reason they want, can
Same as saying "when cash is created by a central bank, it gives total control to the central bank". Except by definition all cash was created by the central banks since it was invented, that is the very idea of state-issued money.
Exactly! State has total control, always did and always will. That's why we need outside decentralized anchors like Bitcoin.
