Anti-CBDC Bill Exposed: The Hidden Dangers of Central Bank Digital Currencies

Governments want total control over your money—CBDCs are their Trojan horse. Here’s why decentralized alternatives like Bitcoin are fighting back.

The death of financial privacy? CBDCs let central banks track every transaction—buying coffee, paying rent, even donating to controversial causes. No more cash, no more anonymity.

Programmable money = programmable control. Imagine your paycheck expiring if unspent, or funds frozen for 'social scoring.' China’s already testing it. Western politicians swear they won’t… until they do.

DeFi laughs at their 'innovation.' While bureaucrats debate CBDC designs, Ethereum and Solana process billions in truly borderless transactions daily—no permission needed.

Funny how governments suddenly love 'digital currency' when they can’t inflate Bitcoin’s supply. Stay decentralized, folks.

CBDC models and current usage

• Retail CBDC: For everyone – individuals and businesses. Variants include direct (central bank accounts), indirect (via banks), or hybrid models. Some countries, such as Nigeria with its e‑Naira (since 2021), have made strong progress – recently reporting a 12-fold increase in active wallets in 2023.
• Wholesale CBDC: Exclusively for financial institutions. Aimed at optimizing interbank payments and securities settlement – often integrated with existing payment networks like TARGET2 in the EU.

Globally, over 80 countries are in the research or pilot phase of CBDC development; more than 15 advanced studies are ongoing. The most advanced include:

• China: Over 260 million e-CNY wallets are active in about 23 cities, using an indirect model via banks.
• Nigeria’s e-Naira follows an inclusion-focused model with a 95% coverage goal according to the CBN, although current penetration stands at around 6%.
• India, Brazil, Russia plan major rollouts within the next 18 months.

Strengths

• Fast, low-cost, with potential for programmability (automated payments).
• “Digital cash” can enhance financial inclusion.
• Government tools for targeted monetary policy and transfer payments.

Drawbacks and risks

• Privacy: Individual transactions could be traceable by central authorities.
• Shift in roles: Banks could lose deposit share, potentially increasing systemic risks.
• Technology & security: Risk of cyberattacks and system outages.

CBDC in Switzerland and the EU

Switzerland has discussed multiple hybrid models and is currently evaluating an offline-capable retail CBDC to complement the digital franc. In the EU, the European Central Bank (ECB), in cooperation with national central banks, is preparing the digital euro – with a focus on data protection, payment security, and interoperability with existing systems like TARGET2 and private banking networks.

Beyond the technological and monetary aspects, CBDCs are gaining importance in geopolitical debates. Countries like China and Russia are increasingly using central bank digital currencies as a strategic tool to reduce their reliance on the US dollar in international payments. At the same time, BRICS nations are exploring joint digital settlement networks. The digital yuan (e-CNY) has already been tested in international trade agreements with Arab partners and in cross-border projects with Hong Kong and Thailand. These developments show that CBDCs are not merely financial technology experiments, but may also shape the future global monetary order.

Concerns are justified

The greatest concerns regarding central bank digital currencies (CBDCs) lie in the fact that they could be fully monitored and tracked by the central bank. Unlike cash, which allows for anonymous transactions, CBDC transactions WOULD leave a permanent digital trace, giving central banks unprecedented access to an individual's spending habits. This could lead to privacy violations, such as targeted advertising, government surveillance, or data breaches if proper safeguards are not in place. Thomas Moser, alternate member of the SNB’s governing board, warned in an interview with CVJ.CH about retail CBDCs.

Additionally, programmable money is a powerful feature of CBDCs that comes with both potential benefits and drawbacks. Essentially, central banks could program their digital currency to automatically perform certain actions. For instance, the creation of smart contracts becomes possible, money flows between parties can be regulated, or restrictions on the use of digital currency could be enforced programmatically. This could be very useful in many ways – automation of financial transactions, cost reduction, efficiency gains, and enhanced transparency are just a few examples.

A potentially controversial use of programmable money involves incentivizing people toward certain behaviors or actions. Governments or central banks could encourage specific spending patterns by offering rewards or benefits through CBDCs. This raises concerns about state control over individual financial decisions. Any use of programmable money for nudging purposes would need to be carefully considered and implemented to avoid unintended consequences or negative impacts on individuals.