I am not a fan of Central Bank Digital Currencies because I believe they give too much centralized power to the governments that will be running them.
I believe individuals should take ownership of their fiscal responsibilities and have protected rights.
CBDC’s are centralized blockchain tokens – the government has full control, can withdrawal funds, implement taxes, shutoff your wallet, stop transactions, far quicker and easier than with our current system.
If cash disappears, it’ll be mighty hard to put away some “emergency money” for another major collaspe or economic depression..
Losing cash = losing many financial freedoms.
This is why I am fearful of a crisis such as COVID-19 greatly expediting our path to the digital dollar, the removal of cash over time, and the limitations of a future transacting only in Central Bank Digital Currencies.
As this paper is being published, the United States, along with the rest of the world, has been struck with and partially immobilized by the COVID-19 pandemic. As Washington, DC has formulated its emergency relief policy response in the face of the current crisis, it has set upon issuance of direct payments to individuals to offset lost wage income. This initiative has revealed persistent deficiencies and shortcomings in the effective distribution of monies, as an estimated 70 million Americans will need to wait a month or more to receive their direct payments via paper check as the legacy infrastructure systems do not provide a more direct means of payment. We see yet another example with the sudden need for retired COBOL programmers to support legacy computer systems underpinning state unemployment benefit programs. The pandemic-induced crisis should be a call to action to renovate these long neglected yet critical payment and financial infrastructure that are becoming increasingly outdated. A CBDC could dovetail nicely with other projects seeking to replace legacy technology infrastructures, such as cloud computing, digital identity, and automation. Some proposals have been made for “digital dollar” electronic cash payment infrastructures to distribute electronic payments directly to consumers. These proposals to date appear to consider “digital dollars” in terms of benefits distribution functionality through accounts-based systems and not as a form of tokenized CBDC.
How does this tie into social inequality and stimulus?
One area of promise with respect to a US digital dollar is in expanding financial access and inclusion for unbanked populations. A 2017 FDIC survey found that roughly 14 million American adults lack a bank account—a figure that became all the more important during the COVID-19 pandemic when the US government struggled to distribute emergency relief funds to many of these individuals. The Project believes that lower system costs and digital wallets tied to the custody of tokenized digital dollars may hold advantages over traditional bank accounts in terms of expanding access to underserved populations.
The easiest way to get adoption is to employ digital dollars directly into the government social systems.
- PPP loans
- Welfare and other social assistance programs
And it’s not like we are fighting against those programs or the benefits of blockchain.
We are worried about the regulatory possibilities that a centralized blockchain presents.
The coming stimulus that will be needed to save the failing U.S. economy could be a major push toward enabling and employing the first United States Central Bank Digital currency. We continue to see the battle between democrats and republicans in how much and what is included.
But we are sure that the Federal Reserve and Jerome Powell are pushing for more stimulus as relief for the 2020 Coronavirus pandemic.