One monumental irony, or perhaps tragedy, of cryptocurrency is the creation of central bank digital currencies. When bitcoin was first released into the wild, early adopters recognized that its utility was inversely correlated to its similarity to traditional fiat currency. Crypto was to be nimble, unregulated, private, impervious to inflation, and disconnected from any political agendas, present or future.
We can see now that technology cuts both ways. China has been using the digital yuan for a few years now, and scores of other nations have released their own pilot programs. South Korea recently announced that their own test run will commence in Q4 of 2024, with 100,000 citizens planned for the experiment. The operative word within “CBDC” is “central,” as in the central bank, i.e., the government, will have control of all master ledgers of all financial activity.
Governments worldwide use the same justifications for CBDCs: faster payments, lower transactional fees, and better security. They point to the historic levels of fraud that occurred while disbursing pandemic-related aid as something that could have been avoided if only government—the same ones that botched the programs in the first place—had even more control of the process. Never let a crisis go to waste, indeed.
So here we are, approaching a brave new old world. Only worse. Your CBDC renminbi, won, and dollars would be at the mercy of central bank policies, inflation, and general government incompetence as before, only now your digital assets would also be fully trackable and freezable, while remaining intangible. This level of control would be unprecedented across human existence.
It’s been said that good artists borrow, while great artists steal. An apt addendum to that might be, “Then the government smothers.” If there’s a silver lining to this all, it might rest within another irony: the more that world governments promote rollouts of CBDCs, the more people will understand that truly decentralized assets are essential for our freedom.