CBDC: End of Financial Privacy and Freedom

In this blog, I’ll talk about CBDCs (Central Bank Digital Currencies), what they are, and how they’re going to impact our lives, whether we welcome it or not.

I’ll keep things simple and won’t discuss technical stuff about CBDCs or blockchain tech.

The focus will be more on the hidden risks and dangers associated with CBDCs than their benefits. It’s important for everyone to know what’s coming, even if it’s unavoidable. 

Understanding Central Bank Digital Currencies (CBDC)

In simple terms, CBDS are digital versions of national currencies issued and regulated by central banks leveraging blockchain technologies. 

These CBDS have the technical capabilities to reduce transaction costs, carry out instant payments in real time and allow more financial inclusion for unbanked people.

Difference Between Traditional Digital Currencies and CBDCs

You might think that digital currencies are not a new thing, we all have heard about them, in fact we use them daily using our debit and credit cards or using other business services like PayPal, Amazon Pay etc. 

Actually, there is a huge difference. CBDCs are trackable currency units created using blockchain technology. 

Traditional or conventional digital currencies are just the numbers that you see on the screen, but CBDC on the other hand runs on blockchain leveraging its security and traceability. 

While cryptocurrencies like Bitcoin are digital currencies built on blockchain, which are highly secure, transparent, and traceable, these digital currencies are also decentralized, meaning no one can control them.

But in the case of CBDCs, it's a different story. These technologies, like blockchain, can also be used in an undesirable evil way, and that is as a form of total control while still enjoying all the benefits these technologies offer.

CBDC are therefore not conventional digital currencies. They represent real fiat currencies, where every unit of currency can be tracked, totally monitored and easily managed in their respective digital ledgers built on blockchain.

How CBDC Will Completely kill Your Privacy

This is how government issued CBDC will kill your privacy not only in terms of money, but in terms of every aspect of your individual lives.

Every CBDC issued comes with a unique identifier, enabling the government to track its entire journey. Like when was the CBDC deposited into your account, when and where it was spent, to whom it was sent, and even what was purchased at what time etc.

Every purchase you make, be it clothes,medicine,coffee, food, insurance,property,websites and anything that is purchasable can be tracked by the government in real time forever.

Let’s consider the statement, “If we don’t have anything to hide, we don’t have to worry.”

However, accepting this flawed notion blindly opens the door to much bigger dangers.

How CBDC Will be Used as a Tool for Total Control

Since CBDC are uniquely identifiable money that can be controlled and monitored, these digital currencies can be used to impose restrictions on how and where money is spent. 

Let's see how this is possible.

CBDC - Money Set to Expire

Did you know that CBDC can be built to expire after a certain period of time frame? Yes, it's true, your money sitting in your bank account can expire, meaning you will no longer be able to use it. It will just become unusable.

While this tactic has some economic benefits, it will completely take away your control of how you decide to spend your money. 

You won't be able to save that money to buy something more valuable for yourself or your children at the right time. Instead, you would be forced to buy a property probably when the economic conditions are not right.

This kills your financial literacy and the ability to manage your own money. 

While this won't be a reality in the very near future, I personally believe that when AI robots take a huge grip on people's jobs, then everyone will be forced into a universal basic income (UBI). 

Since this money is provided freely, this gives governments more power to control the freely provided money. 

However, restrictions seem to be slowly taking place when it comes to how people should spend their money. For example, in the EU, people should not spend more than €3000 in cash to buy goods and services. 

People are free to buy anything of any value through electronic cash. Why? Because the government can easily track that money. 

While these rules are imposed to prevent Anti Money Laundering (AML), it completely takes away our financial privacy and can be viewed as a step taken towards preparing people to adapt to CBDCs in the future. 

CBDC - Money Set for Selective Freezing

When money becomes 100% digitally controlled and monitored, authorities can easily freeze your accounts or restrict your access to your hard-earned money without your consent. This is true and a reality. 

For example, during Canada’s 2022 "Freedom Convoy" protests, the government invoked the Emergencies Act, leading to the freezing of 206 bank accounts linked to participants and supporters. 

This was done without court orders, sparking debates over government overreach and financial autonomy.

Imagine this, authorities freezing bank accounts even when cash still offers some privacy. Now picture a future with CBDCs, where every transaction is tracked, and your financial freedom could be shut down at the push of a button.

CBDC - Money Set for Selective Behavior

CBDCs can be programmed to encourage specific behaviors or influence how money is used.  Here are a few keyways they could be used:

1. CBDCs could be used to restrict spending on certain goods like alcohol, tobacco or certain types of foods. 

Imagine your doctor advises you to avoid alcohol due to a health condition. If your health data is linked to your CBDCs, AI could track your spending habits. It could then limit how much you can spend on alcohol based on your health history, ensuring you follow your doctor's advice.

2. CBDCs can be linked to Social Credit Systems - a government-run surveillance and rating system that is designed to encourage good behavior and discourage bad behavior. China has already implemented this.

This system essentially strips away your freedom to act, as what is considered "good" or "bad" is dictated by the government. Your choices, your behavior, your life are all controlled by a centralized authority that decides what’s acceptable and what’s not.

When CBDCs are linked to this kind of a system, it totally dictates the social behavior of people, with rewards or penalties tied to actions like voting, social activism, or even behavior on social media.

If you get a poor score, then your access to products and services are severely restricted. How horrible is that? 

3. CBDCs could be issued with restrictions on where they can be used, limiting their usage to specific geographical areas. For example, if you move to another state or region, you might find that your CBDCs don’t work there or that certain purchases are blocked.

On the other hand, CBDCs could be used to encourage people to spend in areas where economic conditions are poor. The government can easily provide massive discounts or incentives for purchases made in regions with high poverty or poor economic conditions, aiming to stimulate local economies or redistribute wealth.

Final Thoughts

While I understand and fully agree with the measures taken by authorities to combat money laundering and the funding of illicit activities, excessive technological control could become a major issue.

Once your country approves CBDCs, you should know that your freedom and privacy is gone forever. What is coming is inevitable, but being well aware of it can at least delay the consequences.

When CBDCs are implemented, everything can be controlled, including how you behave, what you buy, where you live and most certainly your freedom of speech. In simple words, the system will turn people into puppets controlled by the state.

I personally believe there would be more drawbacks of this system than the benefits it offers.

These things are not fictional or fear mongering, these are facts, and the necessary technological infrastructure is quietly being built while you are busy with your day to day lives. And would certainly come into fruition within 10 years' time. 

Get this into your mind very seriously. 

"The right to privacy and freedom are not a privilege granted by the state; it is a fundamental human right. No government, institution, or entity should have the power to take it away."