Why Financial Freedom & Privacy is At Risk with Central Bank Digital Currency (CBDC)

Why Financial Freedom & Privacy is At Risk with Central Bank Digital Currency (CBDC)

Get ready to say goodbye to financial freedom and privacy because the Federal Reserve is launching a digital payments system called FedNow this July. But that’s not all – governments around the world are pushing for Central Bank Digital Currency (CBDC) as the new payment solution. While they claim it will increase customer deposit protection, it also means more surveillance. Why are we moving towards a cashless economy? Well, it’s partly due to marketing efforts, QR code payments, and high-interest rates that reduce cash circulation. And it’s not just the US – global initiatives by the BIS, central banks of Israel, Norway, and Sweden are exploring retail CBDCs in international payments. The U.S Dollar in the Age of Digital Transformation paper examines the potential benefits and risks of CBDCs. Are you ready to embrace the future of payments or will you hold on to your privacy?

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Federal Reserve Payment ESG Economy – TheBlaze

  • The Federal Reserve has been developing a digital payments system, called FedNow, for several years.
  • It is set to launch in July and is being marketed as a convenience, although it comes with the loss of monetary freedom.
  • An application process beginning next month will get people on board before the full launch this summer.
  • Glenn has warned against adoption of the system, noting that its central bank digital currency feature would strip individuals of privacy and physical ownership of money.

The Creepy Advent of Digital Currency – American Thinker

  • Recent bank failures have caused public concern and many have moved to withdraw savings, shift to alternate investments, or purchased commodities like gold.
  • In response to record inflation caused by increased money supply without a corresponding increase in goods, the Federal Reserve adjusted interest rates, creating an inverted yield curve that decreased bank profitability.
  • In the case of Silicon Valley Bank, large deposit holders initiated a run on the bank and executives sold off stocks prior to its demise, resulting in FDIC control of deposits and commitment to backstop uninsured losses.
  • State governments are seeking to criminalize monetary competition while governments and Big Tech move towards implementing a Central Bank Digital Currency (CBDC) for control and surveillance purposes.
  • The Fed has put out a white paper outlining their plan for transforming monetary policy with digital currency, and they are rolling out an instant federal transfer system (FedNow), which will require verification through a Digital ID.
  • Governments no longer trusting citizens with their own labor is a threat to freedom, and this emerging surveillance banking could lead to extreme government control over citizens’ behavior.

Prepare for governments to push CBDCs in the wake of the Silicon Valley Bank collapse (reclaimthenet.org)

  • Governments are leveraging fear of bank runs and financial instability in the wake of the Silicon Valley Bank collapse to introduce central bank digital currencies as a solution.
  • These CBDCs will be presented as resistant to social media-fueled bank runs and able to provide financial stability.
  • Governments may also push them for customer deposit protection during times of economic turbulence and recommend people downloading CBDC wallet apps.
  • However, those that accept CBDCs will face the loss of financial freedom, privacy, and anonymity.
  • Citizens must remain vigilant against these talking points from governments and oppose CBDCs.

Interest rates could fuel the shift to a cashless world. Here’s how | World Economic Forum (weforum.org)

  • 90% of central banks are developing a central bank digital currency (CBDC) and 76% of nations working on a retail CBDC are exploring interoperability with existing payment systems.
  • In Sweden, the government launched marketing efforts and introduced the Cash Register Act in 2010 to reduce cash usage and cash in circulation decreased from 2.6% of GDP in 2012 to 1.1% of GDP in 2022.
  • In China, currency in circulation decreased from 11% of GDP in 2012 to 8.2% of GDP in 2022 due to QR codes simplifying payments via Alipay and WeChat Pay.
  • High-interest rates lead to decreased cash in circulation as shown by central bank interest rates having strong negative association with cash.
  • Despite digitalization progress, cash usage is still high; Eurozone, US and Japan have seen an increase, with over half of those living in developed countries believing that it will always be around.

Signe Krogstrup: Speech – National Bank of Denmark’s conference “New types of digital money” (bis.org)

  • Denmark’s National bank welcomes attendees to their conference about new types of digital money.
  • The bank is monitoring and studying the implications of a shift away from cash payments and the rise of blockchain and crypto.
  • Money needs to be efficient, an accepted unit of account, and hold stable value, which comes from trust in the issuer’s commitment to keep its purchasing power over time.
  • Fiat currency is issued by banks/institutions, has been successful in maintaining trust, and is supported by independent central banks with price stability mandates and accountability.
  • There are now two trends: decline in cash use and rise of blockchain and crypto-based assets.
  • Unbacked crypto assets (like Bitcoin) suffer from lack of supply responsiveness and have limited use as money.
  • Stablecoins offer potential if sound regulation is in place; MiCA is a step in the right direction.
  • CBDCs are worth considering but require changes to financial structures; cash may still be necessary for trust.

Project Icebreaker: Breaking new paths in cross-border retail CBDC payments (bis.org)

  • The Bank for International Settlements, along with the central banks of Israel, Norway and Sweden have completed Project Icebreaker which studied the potential of using retail central bank digital currencies in international payments.
  • The report outlines the model used, payment process, technical architecture, experiments conducted, key findings and lessons learned, policy considerations and conclusion.
  • G20 has made it a priority to enhance cross-border payments and the BIS Innovation Hub is coordinating experiments to make this happen.
  • Project Icebreaker explored a hub-and-spoke solution interlinking domestic systems through a technical platform that facilitates communication between rCBDC systems.
  • This allows many systems to participate without increasing complexity and provides autonomy when designing domestic rCBDC systems.
  • It demonstrated how cross-currency transactions could be achieved with minimal requirements on national CBDC systems.

The Fed – Money and Payments: The U.S. Dollar in the Age of Digital Transformation (federalreserve.gov)

  • The U.S. Dollar in the Age of Digital Transformation (PDF) paper examines the potential benefits and risks of a central bank digital currency (CBDC).
  • It discusses different types of digital payment methods and assets that have emerged, while concluding with policy considerations.
  • A CBDC would be a liability of a central bank such as the Federal Reserve, potentially providing a safe, digital payment option for households and businesses.
  • Money and Payments is requesting public comment on more than 20 questions to fully evaluate a potential CBDC.

Central Bank Digital Currency and Financial Inclusion (imf.org)

  • This paper examined the potential implications of introducing a retail central bank digital currency (CBDC) in developing countries, which could increase financial inclusion and boost overall lending.
  • Two key channels identified were an increase in bank deposits from previously unbanked populations and the ability to build credit using CBDC data.
  • Overall lending can be increased when bank deposit liquidity risk is low, and when the size and relative wealth of previously unbanked population is large.
  • Even if overall lending decreases, households may still benefit from access to CBDC for payments or for credit-building purposes.
  • A two-tier CBDC model, where commercial banks issue CBDC to consumers, could be optimal if non-bank payment system providers distribute it, and if CBDC data is shareable with banks.


This is for informational purposes only and does not constitute professional, financial, medical, or legal advice. Please conduct your own research and consult with a qualified professional before relying on any information provided.

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