What is CBDC ? (filler)

I’ve just read about this “Central Bank Digital Currency” and some people consider it a bad thing.
Is it a new crowd control system or just an experiment for now?

As with all technology, a CBDC is in itself more or less neutral.

The positives:

  • A CBDC can provide a means to hold and transact base money in digital form. In the current system, only cash is base money. Bank accounts and cashless payment methods are all book money based on IOUs.

  • A CBDC could theoretically be held in self-custody in a wallet without needing a bank or third-party service provider.

  • A CBDC could technically be used for both digital and physical transactions, as can be done with cryptocurrencies using Tangem, Opendime, etc.

  • A CBDC could enable fast global transactions of actual base money. This would eliminate the need for clearing houses, SWIFT, Visa, Mastercard, the Petrodollar, and the numerous banks and service providers which each skim their cut off each transaction made.

The negatives:

  • Centralization of money. Originally, money as we know it today was issued by private banks. Today central banks have control over the production of legal tender, but private banks still share control because they control book money. A CBDC can potentially centralize control over all money with the central bank and subsequently the government.
  • Unlike bitcoin, which is decentralized, a CDBC is owned and operated by a central bank. The central bank owns the code, and can dictate and adjust the properties of the CBDC. Eventually, a central bank could theoretically allow or deny any transactions as it sees fit. For example, a government could cut all funding to its political opossition by simply deactivating their CDBC wallet, etc. Things like central bank financial policies, rations (e.g. on meat, alcohol, sugar, or anything else), sanctions on individuals, and taxes can be quickly and effectively implemented by the central bank because ultimately, it has full control over all transactions. In short, a CDBC enables the kind of centrally planned economy that guys like Stalin and Mao could only dream of.

My verdict:

For transactions between banks, I see CBDCs as preferrable to today’s SWIFT and clearing house monopolies. However, decentralized, open-source, non-controllable cryptocurrencies would serve mankind much better in this regard, in my opinion.

For transactions between individuals, the negative potential of CBDCs far outweighs their positive potential. Sure, a very liberal country of freedom-loving individuals could keep cash alongside CBDCs, require the code to be open-source, and forbid the central bank from making changes without voters’ approval, but I hardly see that as a reality. Even in the most free countries, nobody gets to vote on central bank policies. Basically CBDCs would be a huge move backwards from the freedom we’ve had in recent decades to the authoritarianism of the past. The adoption of decentralized cryptocurrencies, on the other hand, would further the cause of freedom, in my opinion.


I’ve read somewhere that american big banks in the US are for it, while small ones are against. I suppose they already somehow controls the central bank.

For now, central banks (in western countries, at least) are presenting CBDCs as an analog to current base money. In other words, it could be used for cash reserves, etc. but banks and other financial services providers will continue to use book money. In other words, not much would change. I could see that being the case initially, but long-term I don’t see it lasting long. If, for example, a country like China decides to take full advantage of all of the possibilities that a CDBC provides, other countries will be more or less forced to follow suit or risk being disadvantaged.

Self-custody by the individual? Then it would have to be implemented as a cryptocurrency. But CBDC does not have to use crypto, right? I’m skeptical about self-custody as it is way too easy to lose your waller or forget the password. And what’s the advantage of it anyway?

In order for self-custody to make sense, you would need to be able to exchange CBDC without needing the approval of the central organ. And I don’t think they will allow that. The central banks will probably want to yield as much power as they can. So they will want to know exactly who has how much, and who they’re transacting with, and potentially block certain transactions. At this point, it makes no sense to privately store your currency. It’s like cash, that you can’t spend anywhere without the bank’s approval.

The second point is also interesting. If you have a current account directly at the central bank, and perhaps it also gives you some interest, then many people would not need to open a bank account. They could receive their salary there and use some kind of national debit card in the shops.

The commercial banks would then only come in handy if you needed a loan. So I presume the commercial banks could potentially be afraid of CBDC?

Finally, I heard that with CBDC you can make money with an expiration date. That is, you can say “ok we had this bad crisis, so now everyone receives a stimulus check but they have to spend it within a month, or it’s gone”. Or they could limit what you can spend the money on.

And yeah, when you remember the truckers’ protest in Canada, with CBDC it would be a piece of cake for the government to freeze the accounts of people who don’t do what the government wants.

These are reasons why we should never let CBDC become a thing. Total control of how and when we can spend our money.


Unfortunately it’s already a thing. It is not going away because there are huge incentives and upsides (particularly for developing countries looking to escape the colonial financial system). Namely, the ability to trade directly between countries without having to first buy US dollars, British pounds, French francs (now euro), etc. and use the established (colonial) exchanges.

Of course, this could also all be done with bitcoin, for example, but the problem with bitcoin is that until there are no more whales at all, it will remain far too unstable for meaningful trade. Same with Monero. The free nature of crypto makes that imposssible, as it would require both: limiting the maximum amount of bitcoin which can be held by one person; and linking a person’s ID to each wallet. With a CBDC, on the other hand, those things are easy to do. So if we end up living in a dystopian cashless world dominated by CBDCs which can only be used to rent a micro-dorm and buy Soylent Green, the bitcoin/crypto whales would be partly to blame for that.

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If it’s really to excape the estabilished system. I wonder if someone will try to “free” them. I mean, they might hide some WMD somewhere…

Well, so far we have 3 interesting experiments: China’s CBDC, and bitcoin’s legal tender status in El Salvador and the Central African Republic. It will be interesting to see how these two different models develop.

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