The European Central Bank (ECB) has announced the transition to the preparatory phase of the digital euro project, marking a significant step in the evolution of the modern financial system. Consequently, the concept of a central bank digital currency (CBDC) is becoming increasingly demanded. It represents an electronic form of the national currency, which is legally established, setting it apart from cryptocurrencies. Although CBDCs may offer convenience and an upgrade to the payment system, they also carry certain risks and threats for average users. I was curious to know exactly what risks we ordinary people will face to with the advent of CBDC.
- Privacy: Digital currency may lead to a reduction in the anonymity of transactions. CBDCs potentially allow governments and central banks to track all user operations, raising questions about data confidentiality.
- Data Security: Centralized CBDC databases may become targets for hackers, threatening the financial security of users.
- Technological Exclusion: Not all citizens have access to digital technologies, which could lead to financial isolation for some segments of the population.
- Changes in Banking: CBDCs could change traditional banking models, reducing the role of banks as intermediaries and complicating access to credit.
- Digital Inflation: If the management of CBDC issuance is not strictly regulated, it could lead to additional inflationary pressure.
- Changes in Monetary Policy: CBDCs could provide central banks with new tools for economic influence, which could be used irrationally or lead to increased volatility.
- Risk of Skill Obsolescence: The shift to digital currency might render certain professions obsolete, resulting in job losses for specific segments of the population.
- Inequality in Access to Information: There may be an increase in the information gap, where more affluent groups have better access to information and education about CBDCs.
- Complexity of Transition: For many users, transitioning to digital currency could be technically challenging, leading to a reluctance to adopt this innovation.
- Dependence on Technology: Complete reliance on electronic systems for the financial system could be catastrophic in the event of technological failures or cyber-attacks.
- Monopolization of Power: Increased government control over financial operations could lead to a centralization of power and a threat to democratic freedoms.
- Social Inequality: The digital divide may intensify, as people without access to digital devices or the internet will be left out of the digital economy.
- Economic Instability: Rapid implementation of CBDCs without proper preparation could lead to failures in payment systems and volatility.
- Legal Risks: The absence of international regulation can create a legal vacuum or jurisdictional conflicts.
- Cybersecurity: The concentration of large amounts of finance in digital form increases the risks of cybercrimes such as hacks, fraud, and data theft.
- Threat of Centralized Control: CBDCs enhance the role of state structures in money management, which could lead to abuses and limit financial freedom.
- Invasion of Privacy: Digital currencies could allow governments to monitor personal financial transactions without appropriate judicial oversight.
- Threat to Macroeconomic Stability: Poorly designed CBDC systems could lead to an imbalance in the demand and supply of money, causing economic upheaval.
- Regulatory Complexities: The revision of the regulatory framework for CBDCs may create legal uncertainty, deter investors, and slow down economic development.
The pace of CBDC implementation varies around the world, but some countries, such as China with its digital yuan, are already actively conducting pilot projects. Experts suggest that within the next five years, many countries will launch their own digital currencies.
My conclusion is the following: as the world actively explores and tests the CBDC concept, it is crucial to pay attention to potential risks and threats. Clearly, without proper regulation, security measures, and the protection of human rights, the implementation of digital currencies could have far-reaching negative consequences. With the right approach, which includes the development of robust safeguards and transparent regulatory frameworks, CBDCs can provide significant benefits while minimizing risks to the economy and the average person. To be honest I can hardly imagine the changes within 5 years. I think we need more years for implementation.
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1yIf the consolidation of wealth, power in this country is any indication, then the consolidation of control in a digital, programmable currency, will be the end of free societies, and the starting point for this great reset, as referred to in the 2030 agenda. Of course we know this. The folks that brought us overdevelopment of our natural world, (with only thirty percent of our natural world left to supply oxygen to those that would to so breathe oxygen;) the folks that brought us into the pollution age of every major land mass, waterway, from our oceans to our streams and atmosphere; the folks that brought us into the surveillance age and the joint venture of academia, business and government in the development of our high tech industry, will become the targets of a disenfranchised society. Mayhem will not ensue, but simply rejection; rejection of governance; rejection of oversight; rejection of public works; rejection of Federal taxation, agencies and the dissolution of the Federal experiment. A grand return to the farms of old will begin, as it has already begun. Our labor participation rate will rise to 100%, from fifty. Leadership will return. MARK applied physics
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1yThere's truly nothing good about central bank digital currency. Like our now electronic voting system, it is corruptible; programmable and allows for the complete loss of buying freedom; and thus will allow for more human suffering at the hands of a so very few. A central bank digital currency will allow many in our population, to opt out of the digital economy, creating black markets. Finally, a digital currency will create a divide between government & those who would to be governed. 2030 agenda speaks to a far reaching human free zone in America, from Florida to California, across the midwest. Smart cities are in the works, as we have seen in Maui. Maui, it appears, with its' directed energy base on the island, was a test site for this country, practicing & targeting of individual businesses, cars, buildings, leaving adjacent trees untouched. Smart weapons, quantum computing, the targeting of live targets is easy, targeting those with poor social scores (for we know that social scores are not merely something that China produces, but is realized here in the U.S. as well, in a more clandestine setting, for businesses to utilize, and for our gov agencies to score in some ESG nightmare.) MARK applied physics
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1yA central bank digital currency will be the tipping point of free societies, to emerge from a quasi free state and democracy, to one of totalitarianism. Texas will be the first to secede, followed by Arizona, Utah, Ohio. Texas already has a gold backed depository, the first step toward an independent, Texas currency. Secession will be followed by the formation of militias. A union will dissolve, the great American experiment, will end. Of course, we already suspected that America was never what it seemed, a free, democratic society, with a labor participation rate of fifty percent, was never actually very efficient or productive or effective in caring for the population, its' needy, or realizing success of families or education of our young to be productive members. Each year more and more young people were disenfranchised from society, from family. This great American experiment did not start out so well, as it began in lies and deceit. Giant land grants, provided to big business, allowed for the ownership of medias through bribes and corruption, and the misidentification of a peoples that inhabited this land, originating from Jerusalem ... our lost Tribes of Israel. MARK applied physics