Kerby Anderson
Whenever I am out speaking and take questions, there is one question I can assume will be asked. Aren’t you concerned about the possibility we will soon have a central bank digital currency? Financial leaders in other countries are calling for the implementation of these CBDCs, and concerned Americans wonder if they are coming to this country.
My first response is to mention that I have written about CBDCs, which is usually followed by an encouragement to do it again. Hence, this commentary. My second response it to point to the upcoming election. President Biden signed an executive order encouraging the Federal Reserve to study the feasibility of digital currency. Former President Trump is on record opposing CBDCs.
Why should we be concerned? With CBDCs, every transaction could be tracked by the government. The government and the federal reserve would know even more about you, your family, your clients, and your charities. Although some critics fear we would lose our privacy, I fear a greater issue.
CBDCs would make it easier for governments to freeze financial resources. The Canadian government prevented the protesting truckers from accessing their bank accounts, but that would be made much easier with CBDCs. And CBDCs can be programmed. This could be used to prohibit people from buying certain goods or at least place a limit on how much they might purchase.
Proponents believe CBDCs would give central banks a new opportunity for monetary policy. It would be easier, they say, to undertake “helicopter drops of money.” But they also add that it would be possible to implement negative interest rates by shrinking balances in CBDC accounts. That is bureaucratic speak for taking money out of your account.
In many ways, this election will determine the future of CBDCs.
This post originally appeared at https://pointofview.net/viewpoints/central-bank-digital-currencies-2/?utm_source=rss&utm_medium=rss&utm_campaign=central-bank-digital-currencies-2
