I'm not losing sleep over the FUD about CBDCs.

It's a waste of time to even talk about them. They are basically government shitcoins.

Development and promotion of privacy-preserving tools can be more enthusiastically done from a position of excitement about what these tools enable for people using them, rather than from a position of extreme fear and depression.

It's a bit of a stretch to think that the 'programmable' CBDC Rupee will ever be used by the wider Indian public. Even if it does, to think that it would become widely accepted like normal Rupees is a 'Bureaucratic Man Fantasy'.

In Bitcoin terms, It's like saying that people would prefer using monkey JPEG NFTs as money over sats.

CBDC's are analogous to shitcoin projects like all the others we're used to seeing - but created and hyped up by governments and bureaucrats who want to seem like they are technologically aware and score brownie points from their superiors, or with a lust for power over fellow men.

All hype, no substance.

There are whitepapers and research papers, announcements, announcement of announcements, vague timelines, very little details about how they will be implemented or conversations about whether the theoretical promises are economically and technologically feasible.

All of the above would seem like familiar signs of something bitcoiners would very easily identify as shitcoin scams.

Like for most things, moral or ethical arguments are not necessary.

Economically, CBDC Rupees would be less saleable than normal Rupees.

If you can't spend Rupees and exchange it for the things you want, then they're not money. They act more like more corporate reward points one wouldn't use for serious monetary purposes, like salary receipts, savings, investments and employee payouts. Its monetary function is limited to certain purposes.

That alone would be enough for people to not use it as money.

No matter how 'uneducated' a person is, he'll be smart enough to know that a normal Rupee he can transact using UPI, cards, physical cash, bank transfers is just better.

If these programmable CBDCs are mandated for universal use, i.e. if every Rupee is in fact made non-fungible at any point, that would kickstart the death of the Rupees as a monetary good.

Other monies will slowly start proliferating. This is kind of bullish for Bitcoin and other competing currencies to the Rupee.

The existence of massive civilian gold and silver reserves, stablecoins, Bitcoin and thousands of shitcoins means that this death would be accelerated.

Historically, like almost every widely used monetary good today, the Rupee has its origin in the market.

A Rupee literally used to mean silver coins of a certain weight. Some king just created the standard, which the market accepted because it was a convenient way of using an already widely used monetary good.

Even after transitioning to a paper money standard through private banks issuing notes, redemption in Silver was still possible. The paper money would have been used because redemptions existed.

Even after legal tender laws crept into the market through the British government monopolizing monetary issuance, redemptions existed and were mandated.

This redemption was later changed to Gold, which didn't affect the Rupee's usage because Gold was also widely used like silver.

The RBI, India's central bank, came much, much later, removing redemptions and transitioning to full fiat.

This also did not affect Rupee usage because its monetary function - to act as a medium of exchange, the only real monetary function that matters - has not been fundamentally messed with.

CBDC Rupees, if implemented in a way that makes the Rupee non-fungible and less saleable, destroys its core monetary functions.

That's why it's a terrible idea to implement it if the goal is to 'make the Rupee better'.

If one is serious about making the Rupee better, he'd advocate for redemptions in Gold and Silver (Bitcoin in our case) to be re-introduced and mandated by law and for the RBI to be abolished as a monopoly issuer of Rupees.

Gold and Silver remain insanely popular among those serious about preserving their wealth. Civilian holdings of them would far outweigh any amount any government in the world has accumulated or hopes to accumulate.

One can argue that CBDCs are 'gaining traction' and point out these 'pilot programmes' that seem to never become wide-scale rollouts.

Firstly, these pilots were made mainly for targeted subsidies.

I don't think subsidies and freebies are good ideas if the goal is to help a certain and I don't advocate for them, but it makes sense that the govt would use a CBDC for those purposes because people getting the handouts in fungible money would tend to use them whatever they want to. So the arguement would be that this is being done to avoid 'wastage' or 'leakage'.

Secondly, the recipient of the CBDC unit would obviously get it as 'normal' rupees since he would receive it via UPI to his bank account. The CBDC unit then becomes a normal, fungible unit of Rupee that can be used for whatever he wants.

Despite all this, one can definitely find enthu cutlets being patriotic and using it out of some misplaced love or fear of the Indian government and everything it does.

These people are like shitcoin bagholders who promote their bags to people relentlessly, all day every day in the hopes of gaining some sort of value or reward from it.

Bitcoiners, Gold and Silver bugs will know that they're just opening themselves up to a life of poverty and serfdom. That's their choice. Not necessary to judge them.

I'll finish with a general argument in Rothbardian terms:

It might seem for an observer that 'power', or rather the people who occupy the machinations of power, i.e. the state, have the ability to manipulate, shape and subjugate the 'market', or rather the people who comprise the spontaneous order of the market, in any way they want.

But the reasoning person will understand that power exists at the mercy of the market in reality.

Always has and always will.

There is a threshold beyond which power cannot handle market pressures. Its fragile foundations will crumble and die.

That's why every State throughout history has had an expiry date.

And that includes the ones that exist today.

A CBDC would simply prepone that expiry date.