Central bank digital currencies pose a threat to privacy

Central bank digital currencies (CBDCs) are gaining popularity and there is no stopping them.The governments of Sweden, China, Thailand, Canada andmany other countries are experimenting with CBDC. Most currencies are in the planning and initial development stage, but China is almost ready to launch and is hoofing impatiently.

The digital dollar and yuan will be a boon forgovernments seeking to tighten control over cash flows and gain real-time insight into where funds are being used. But these tools can negatively impact ordinary citizens, further exposing their privacy and increasing inequality.

CBDC is the exact opposite of cash. They are easily tracked, censored, and distributed to those deemed “worthy” to participate in the new digital economy.

Social credit, the idea of ​​which isthat citizens must prove their right to be included in society, obeying the will of the state, already exists, and it is not limited to only authoritarian regimes. Currently, pressure on society is carried out through financial discrimination - insufficiently loyal citizens are denied banking services for personal and corporate accounts. In a world that will use CBDCs, governments won't even need to negotiate with payment service providers. It will be possible to freeze any account of any organization with just one click of the mouse.

Whether you stand for freedomwords or do 3D printing, your fate will be in the hands of the mighty. And this is just the tip of the iceberg - tax evasion and sending money to relatives in Iran or Cuba will not be ignored.

The coronavirus pandemic has accelerated the transition todigital payment methods. Central bank digital currencies will complete this transition. Technology companies will become the new banks that provide payment services to billions of users, they will offer new financial services, right up to lending. The problem lies on the surface - tech giants are simply disgusting at protecting their customers' personal data. Hackers break into databases with ease, and in the future, by stealing your Facebook account, they will also have access to all financial documents and funds.

CBDCs have the same properties that makeBitcoin's unique and secure blockchain will be used for surveillance, control and restriction. Blockchain analysis companies will not bother de-anonymizing addresses, since all participants in the network will be known due to strict compliance with KYC (know your customer) and AML (anti-money laundering) requirements. The introduction of CBDC will usher users into an era of unprecedented financial oversight and control.

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