Published September 19, 2022
The widespread adoption of bitcoin and other cryptocurrencies has left many government officials on the sidelines. In an attempt to participate in the action, many governments have put forward the idea of a “central bank digital currency” (CBDC), i.e. a government-issued cryptocurrency using blockchain technology. President Biden has asked the federal government to look into the idea, and new reports suggest the Biden administration may soon step up efforts to create a so-called “digital dollar.”
The U.S. Treasury Department will advise the federal government to continue working on issuing a digital dollar, although it is only expected to take the final step if it is approved that government-created tokens are under development, CoinDesk reports. “The issue of national interest will depend on the subsequent approval of the Biden administration and, possibly, on the actions of Congress. »
At first glance, the government’s intervention in the crypto frenzy may seem funny, novel, or harmless. But in fact, this is a serious cause for concern. A central bank digital currency will not have any of the advantages of cryptocurrencies like bitcoin and will come with some serious disadvantages.
Why Central Bank Cryptocurrency Won’t Look Like Bitcoin
Any digital currency that uses blockchain technology can technically be called a cryptocurrency. But as blogger and content creator Laya Heilpern aptly explained, bitcoin has unique properties that make it valuable. Namely, it does not require permissions – everyone can use it as they wish – and is decentralized, that is, there is no central authority that could control it.
This last part is especially important. Since no one can increase the supply of bitcoin beyond the set mining schedule, no one can arbitrarily undermine its value, as the US government did with the dollar by printing money.
However, a central bank digital currency will be neither unauthorized nor decentralized. Thus, most of the benefits that a cryptocurrency like bitcoin offers (and the value that comes with it) will not count.
The cons border on dystopia
Of course, if the “digital dollar” were just useless, it wouldn’t be the end of the world. But everything is much worse. While the central bank digital currency won’t offer any of the benefits of bitcoin, it will provide governments with new and unprecedented ways to control citizens. To say that this idea can be abused is to say nothing.
After all, a central bank digital currency will allow the government to track your every purchase. This can also be easily used to limit them.
For example, imagine a future government deciding that gasoline should be rationed to fight climate change. Your “digital dollars” can be made to stop working at a gas station once you buy a certain amount of gas per week. Thus, a central bank digital currency will open up new opportunities for the government to assert its control over our daily lives. Our wealth and income would no longer be ours.
If any of this sounds extreme or fantastical or far-fetched… well, just look at China.
So when the Biden administration releases its report and advocates for the creation of a digital dollar, the public should not treat the idea with mere intrigue or indifference. We need to make ourselves known and speak out against this idea, otherwise we may well regret it.
Translation of counterpoint