The most famous whistleblower Edward Snowden, in response to an article in the New York Times, indicated significant concerns about the national digital currencies of central banks (CBDC), on which about half of the world’s central banks are already working at various stages of development, according to the IMF.
Edward Snowden commented on this topic in response to an article by a political economist at Cornell Dr. Eswara Prasady, which indicated a clear trend towards a cashless economy, which is also associated with the arrival of the aforementioned CBDC.
CBDCs are digital currencies issued by central banks and have absolute control over them. This makes them significantly different from BTC-type cryptocurrencies, which are decentralized, making it clear that the rules cannot be easily modified.
Dr. Prasad in his article for the NY Times also suggested that such cryptocurrencies could be a tool for central banks if the economy finds itself in a difficult situation and a negative interest rate needs to be imposed. Since CBDC is programmable money, it would really be possible.
It destroys the savings of every working person
Snowden followed this, pointing out that such digital currencies could be “a useful policy tool to occasionally destroy the savings of every working citizen in the country if they do not spend it fast enough.”
He stressed the concerns expressed several times that if, in addition to the CBDC, cash is gradually abolished, people’s money will be exclusively under the control of central banks. And they can then make people spend their savings by introducing negative interest rates, which would mean that their money will not only lose value due to inflation, but also in fact – it will be declining. In other words, central banks will force people to spend faster, otherwise they will lose money anyway.
Snowden called the CBDC “Reversal of the basic principles of cryptocurrency protocols – these are crypto-fascist currencies, their bad twins. They are explicitly designed to deny their users the fundamental right to own their money. The state will act as the mediation center for each transaction. “
These are not just negative interest rates
The CBDC’s risk is not only negative interest rates, but also, for example, restrictions on what the money can be used for. You can also program them to have only a certain lifespan – for example, that it is necessary to spend them by the end of the year, otherwise they will fail. Simply put, such digital currencies give the state absolute power over people’s money to an extent that is absolutely unimaginable today.
Central banks and governments can be expected to have a major media massage, along which ordinary people will be “explained” that such cryptocurrencies are actually in their favor. In addition, it will most likely be a long-term process in which CBDCs will initially only be an alternative to the traditional electronic money we have in banks or in our wallets. Subsequently, however, the cash and money in the accounts may gradually become a thing of the past and we will be left “in the hands” only of the CBDC, which we will be able to use only as we are allowed to do.