Leading the charge are the world’s two most populous nations, China and India, which between them account for roughly three out of every eight people on the planet.
More than $2 trillion has been wiped from the “value” of the crypto market in the past year as the final stages of one of the world’s biggest ever pump-and-dump schemes play out. The fallout from the epic collapse of FTX (covered in depth by Yves here, here and here), has now spread to Binance and Coinbase, two of the world’s largest cryptocurrency exchanges.
Coinbase’s stock is down an eye-watering 86% so far this year and its bonds are trading close to 50% on the dollar. As for Binance, its books were just described as a “black box” in a damning Reuters special report. The value of its digital token is down 8% over the past month and 50% so far this year. Depositors have reportedly yanked billions of dollars worth of funds from the exchange in the past week, though CEO Changpeng “CZ” Zhao claims much of that money has returned.
One reason why investors are spooked is a recent report from that the US Justice Department is mulling going after Binance, “CZ” and other senior executives for an assortment of financial crimes including “unlicensed money transmission, money laundering conspiracy and criminal sanctions violations.” That came on top of the arrest last week of FTX founder Sam Bankman-Fried, who has been charged with money laundering and fraud, among other violations.
Now that the horse has bolted and trillions of dollars of investor funds have been lost, noises are finally coming from Congress about the need to regulate cryptos. This comes on the heels of Executive Order 14069, “Ensuring Responsible Development of Digital Assets,” which calls for “safeguards” to be put in place to “promote the responsible development of digital assets to protect customers”. Signed by Joe Biden on March 9, it also recommends creating a so-called “digital dollar” (more on that later).
It’s not just the US that is calling for sweeping regulation on cryptos. Yesterday (Dec. 19), the European Central Bank’s Vice President Luis de Guindos said that crypto assets need to be regulated at a global level to avoid loopholes in the global financial architecture. Last Wednesday (Dec.14), Germany’s financial market regulator BaFin made the exact same case, calling for global regulation of the crypto market to protect consumers, prevent money laundering and preserve financial stability.
While all this is playing out, to breathless coverage in the media, big moves are being made around the world on central bank digital currencies (CBDCs). And they are receiving virtually no coverage.
China and India Leading the Way
Leading the charge are the world’s two most populous nations, China and India, which between them account for close to three out of every eight people on the planet. No G20 economy is as far along the path toward implementing a nationwide central bank digital currency as China. Wired magazine noted last month that the Asian giant “is far ahead of the US and other countries, where the concept of an official form of digital cash is only at the discussion phase.”
The People’s Bank of China launched its first pilots of the digital yuan in 2019, and the CBDC is now being tested out in 23 of the country’s largest cities, including Shanghai, Beijing, and Shenzhen. In January this year, the digital yuan was given a promotional boost when visiting athletes and attendees of the Beijing Winter Olympics were invited to try out the digital currency. In September, the People’s Bank of China released the new digital yuan app for iOS and Android on domestic app stores, which is now freely available to anyone living in the 23 pilot cities.
Another major milestone was reached last week when China’s biggest mobile payment platform Alipay agreed to offer the app as an express payment option on its e-commerce platforms. Ant Group, the fintech powerhouse that runs the Alipay platform, is restructuring its business in order to comply with regulations imposed by China’s central bank, which recently set up an agency called the Digital Currency Institute to oversee e-CNY development, reports South China Morning Post, which itself is owned by Ant Financial’s parent group Alibaba.
While perhaps predictable, this move is hugely significant. Alipay, now in its 18th year of existence, is not just China’s but the world’s largest mobile (digital) payment platform, with over 1.3 billion users, 800 million more than Apple Pay. Together with rival Chinese tech platform Tencent’s payment app WeChat, which has 900 million users, Alipay has revolutionized the way Chinese people pay for the goods and services they consume.
Thanks to the ubiquity, convenience and popularity of mobile payment apps like Alipay and WeChat, coins and notes have largely disappeared from Chinese society. As an op-ed in China Daily proclaimed a few months ago, the cashless payment system is “now a reality” in China, thanks largely to “the e-payment apps and more than 1 billion smartphone owners.”
China’s government and central bank now want a piece of the action. The government already banned cryptocurrencies last year, ostensibly to curtail financial crime and prevent economic instability. Now the PBOC appears to be eyeing Alipay and WeChat Pay’s vast payment empires. As the China Briefing reported in September, WeChat has also announced it will begin allowing users to select e-CNY as a payment option to pay for services.
Beijing insists it is not treading on any toes. According to Shanghai Securities News, a subsidiary of Xinhua News Agency, the PRC’s official state news agency, while “some regard the digital yuan as a competitor to WeChat Pay and Alipay,” China’s central bank has “publicly refuted such claims.”
As the digital yuan inches closer and closer to its nationwide launch, the fear in other global capitals is palpable. Last week, an op-ed in Japan Times cautioned that “the digital yuan will have a significant global impact, as it will create the most extensive database of centrally regulated financial transactions.”
The head of UK intel agency GCHQ, Jeremy Fleming, warned in a recent speech that Beijing could use its digital currency not only to evade international sanctions but also to monitor its citizens. What he didn’t mention is that the Bank of England is also looking to develop its own CBDC, with which it will be able to monitor (as well as control) UK citizens. As is just about every other central bank on planet Earth, including the Reserve Bank of India (RBI).
“A Template for the World”
India already boasts the world’s largest biometrics-based digital ID system, the so-called Aadhar. By 2021 the Unique Identification Authority of India (UIADA) had issued 1.3 billion unique identity numbers (UIDs), covering roughly 92% of the population. According to UIDAI CEO Dr. Saurabh Garg, 100% of all adults and 80% of all children are now enrolled in the program. In 2017, the system was touted by “Nobel”-prize winning economist Paul Romer as a template for the world.
One of the masterminds of the UIDAI was Nandan Nilekani, the cofounder and nonexecutive chairman of Infosys, India’s second largest IT company. Lauded by Bill Gates as one of his so-called “heroes in the field” for having made the world’s “invisible people, visible,” Nilekani has in recent years been working with the World Bank to help other governments set up similar digital ID systems.
A national digital ID system like Aadhar is a vital prerequisite for any country looking to roll out a CBDC, as the IMF all but admitted in June. And India, like every other G20 economy, is determined to roll out a CBDC.
To that end, the RBI on December 1 launched a pilot program to test a retail CBDC — i.e. one aimed directly at consumers. The program will initially involve four banks (State Bank of India, ICICI Bank, YES Bank and IDFC First Bank) and four cities (Mumbai, New Delhi, Bengaluru and Bhubaneswar). But in its later phase it will be extended to another four banks (Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank) and nine more cities (Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla). The scope of the pilot program may be expanded further to include yet more banks, users and locations.
V. Vaidyanathan, the managing director & CEO of IDFC First Bank, one of the participating lenders, extolled the potential benefits of a digital rupee, including, I kid you not, saving India’s trees:
Today, India spends close to 5,000 crore rupees a year in printing physical cash. God knows how many trees we cut and how much print we consume in printing these notes. Moving to digital currency will be a huge gain for environment, and for our trees.
“Further, it’s easier to carry than cash, you can carry only that much currency in your pocket, it would be bulky beyond say 2,000-2,500. CBDC is currency in the same denominations, it is easier. And more secure too. If you lose your wallet you lose your cash unlike in digital currency. Over time this is a big gain. RBI has done a wonderful job putting this together, the concept, technology, blockchain, reconciliation etc. For the common person, this is more anonymous than the current and the traditional digital transactions, as these are wallet to wallet and not touching the bank account for every transaction.”
Western Countries Playing Catch Up
As the world’s two most populous countries expand their experimentation with CBDC, countries in the West are frantically trying to catch up. In the past month or so:
- The New York Federal Reserve has completed phase I of Project Cedar, a multiphase research effort conducted with banking institutions such as Citi, HSBC, Mastercard, PNC Bank, TD Bank, Trust, U.S. Bank and BNY Mellon. The goal of the project is to “develop a technical framework for a theoretical wholesale central bank digital currency (wCBDC) in the Federal Reserve context through exploration of fundamental design choices and modular technical features.”
- The UK government has announced it will “bring forward” a CBDC consultation to “explore the case for a central bank digital currency [CBDC] — a sovereign digital pound — and consult on a potential design”. The BoE has been conducting research on the viability of a digital pound for years now, although it still hasn’t publicly committed to developing one. In the June 2021 the UK’s then Chancellor of the Exchequer (now PM) Rishi Sunak announced that “under the UK’s presidency, the… G7 is launching a set of public policy principles for retail central bank digital currencies.”
- The Bank of Japan has unveiled plans to start testing the feasibility of a digital yen with major Japanese commercial banks next spring. The news came just a few months after Sayuri Shirai, a former policy member at the BoJ, noted in an article that the central bank was putting its plans to launch a CBDC on ice due to the continued popularity of cash as a means of payment.
- The European Central Bank (ECB) has announced plans to conduct “market research” for a “digital euro” in January 2023. Normally, market research focuses on customers, who in this case would be EU citizens, but here the target is to gather information from CBDC suppliers. As Euromoney notes, “most ordinary Europeans haven’t even heard of plans to issue a digital euro. Even in the mainstream financial sector, people are at best lukewarm about the idea.” But the ECB is nonetheless determined to plough ahead with its digital euro project and is planning to propose legislation for its adoption in early 2023.
Another nation that is moving hard and fast toward launching a CBDC is Brazil, whose central bank recently unveiled plans to conduct a pilot program next year involving some of the country’s largest financial institutions. The goal is to have the CBDC ready to roll by 2024. The central bank’s announcement follows the launch earlier this year of a QR-enabled national ID system by the Bolsonaro government.
From Reuters:
Speaking at an event hosted by the news website Poder 360, Campos Neto said the design of the central bank’s digital currency would encourage banks to tokenize their assets, with considerable efficiency gains.
“If the digital currency is actually a tokenized deposit, it inherits all the regulation that already applies to deposits,” he said, adding that it should not disturb monetary policy or hurt banks’ balance sheets.
Campos Neto said representatives of the International Monetary Fund (IMF) have approached the central bank and given feedback that this model seems the easiest to implement and other central banks should look into it.
IMF Lending a Helping Hand
As I reported in my previous piece, “Will the World Soon Be Ready for Central Bank Digital Currencies? The IMF Seems to Think So“, the IMF is deeply involved in the development and launch of CBDCs, including by providing technical assistance to many of its members, particularly emerging economies. At the same time, its Bretton Woods partner institution, the World Bank, has been deeply involved in the roll out of digital identity programs across the Global South. According to the IMF’s President Kristalina Georgievan, “an important role for the Fund is to promote exchange of experience and support the interoperability of CBDCs.”
One country where it is doing just that is Nigeria, which was the first largish economy to fully launch a central bank digital currency. But public uptake of the CDBC has been embarrassingly low, with only around 0.1% of the population actively using it. So, the Central Bank of Nigeria has decided to apply a little extra pressure by slashing the daily cash withdrawal limit from ATMs by over 80%. In a desperate bid to boost take up for its CBDC, Nigeria’s central bank is willing to impose widespread economic pain in an economy that is already teetering on the edge.
It is a timely reminder that while digital identity and CBDCs are likely to be rolled out initially on a voluntary basis, it is only a matter of time before more oppressive measures are used to ensure sufficient public “buy-in”. In April 2019, the Mckinsey Global Institute published an in-depth report about digital ID called Digital Identification: A Key to Inclusive Growth. In it, everyone’s favorite consultancy firm noted that fewer than 10% of people had adopted digital ID voluntarily in many of the countries where it has been launched.
This is hardly surprising given the dystopian potential of digital ID systems. Most people in most countries will not voluntarily adopt digital identity or CBDCs, which is why, as with India’s Aadhar system or Nigeria’s eNaira, they will probably be given little in the way of choice. The irony is that central banks’ adoption of CBDCs is, if anything, accelerating even as one of the main justifications for doing so — the growth of private cryptocurrencies, including stable coins – has lost virtually all relevance due to the ongoing crypto winter.
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If I recall, Steve Keen’s alternative for the bank bailouts post 2008 was a ‘citizens bailout’. Individuals would have an account at the central bank which could have been credited rather than paying failed financial institutions directly. The caveat being that the funds must be used to pay down debts before anything else…. So money would still flow into the bad banks and regular folks would decrease debt and/or get a cash infusion.
Anyway, after reading articles like this I am curious if CBDC’s is the sort of scheme that he was envisioning? Or is there some other mechanism for creating individual accounts at the central bank that does not involve CBDC?
Also I thought that the existing central banking systems were already ‘digital currency’… is the innovation being discussed just granting regular citizens direct access to central bank generated money? I’m missing something.
CBDC is more about tracking money movement between individuals, as the ledger for all exchanges will be at the central bank.
Keep in mind, the pseudonymity of bitcoin etc do not come from the system itself, but rather than you do not need to register anywhere to create a “wallet”. The distributed ledger that the system depends on is open for all to read. It is how it keeps anyone from double spending, supposedly.
A big “issue” with physical money, be it metal or paper, is that there is no reporting of exchanges. If i were to hand you a dollar today, only the two of us would know. And as long as you do not go to a bank with it, nobody else will know you have it. That is why various nations are considering no longer issuing large denomination notes, in order to frustrate the movement of large sums without involving a bank.
CBDCs: It’s being done for our “safety”. Always for our “safety”. /s
In an interview lately, Michael Hudson was asked about digital currency, and effectively said that the issues were outside his expertise, but since modern banking is all computerized, our normal currency seems to be digital already. I had thought too that CBDC only needed minimally to be government-run Post Office banks that issued debit cards.
Maybe the recent moves are for a secure distributed phone app to implement payments, coordinated ultimately through the Central Bank. The article mentions this a couple of times.
I would anticipate a strong push for a public/private partnership to provide the phone app to get the maximum number of thumbs into the pie. Like Operation Warp Speed for vaccines (admitting that, done right, OWS could have been a good thing.) A lot of people will have their ideas of what the phone app should be doing. At worst, XKCD has weighed in.
The privacy issue boils down to the hard question of where to find a government we can trust. This is at least as hard a question as where to find financial institutions we can trust.
I respect his acknowledgement the area is outside his expertise.
Experts are in agreement that CBD-Cash is good for anything that ails you and contains no THC. (time honored cash)
It’s actually above my head what the difference is between a digital currency and a check deposit. If I always get paid in direct deposit and always use my card to pay, what is the relevance of cash? I don’t understand
I would like to hear more on this as well, but my take is that with CBDCs there is (1) a state-controlled ledger of all your transactions, i.e., subject to surveillance by tax authorities, law enforcement, et alia; and (2) a framework within which all the organizations you now pay with your credit card can be pressured to use the CBDC instead of cash (cf. the example of the Central Bank of Nigeria as noted in the article). Where I live, I see more and more shops that strongly discourage cash, with automated checkout machines instead of human cashiers, as well as new “cashless” shops that only accept some sort of payment card.
At present, your bank, payment card, and credit card companies each have a record of transactions that you make, but it belongs to them and the state would need to issue a special request to get that data. The state would probably only issue this special request if you were under suspicion of some criminal activity, and it would have to issue multiple requests to various institutions.
With CDBCs, though, all of that data would already be in a state-controlled database, and could easily be subjected to various analytics, i.e., to profile and categorize you as a specific type of individual, based upon your purchases in order to give you a
pre-crimesocial credit score.Imagine all the details from your supermarket or drug store receipts going into this database, or your Netflix or Amazon bills, e.g., why are you buying more than the local average amount of product X or Y? Or why are you consuming Z amounts of Q, etc.? Or why are you watching this movie (political or social-subversive, or ‘dubious’ moral/sexual content?), or why are you buying that book by George Orwell, or listening to this particular song by Black Flag more than once? Or why are you buying product X at the same shop frequented known sex offenders P, Q, R, S, and T, or why are you buying substance D more than Y miles from your home? Etc. etc.. These sorts of analytics become trivial once all of this information about how/where/when you spend your money is in a state-controlled database, as does comparing your behavior with that of known criminals, via neural networks that decide humble cobbler Archibald Buttle is in fact renegade heating engineer and suspected terrorist Archibald Tuttle.
Moreover, let’s say you decide to join a political protest, union organizing activity, or engage in some variety of anti-state or anti-corporate dissent. What’s to stop the state from declaring you a terrorist and freezing your CDBC account? You start hearing stories about your neighbor who tried to join a union and suddenly his account is frozen and he couldn’t pay his heating bill, for example.
I am not claiming all of these things will happen, but with CBDCs they would certainly become a lot easier to implement on a mass scale. Finally, CBDCs require using some form of digital identity, and any new digital ID system opens the door to new forms of identity theft (which could be the subject of another long post)
I agree. Cash is discouraged in so many places. But I don’t why crypto is even necessary ?, I mean wtf needs it? (See Matthew Sarnoff below.) But am I understanding correctly that personal information is easier to access through crypto than the usual data grabs from credit and “preferred buyer cards”? If so things begin to make sense, since that’s sense in this business.
an aside: the cc companies have jacked up the vendor transaction fees to almost 3% of total purchase price in my area lately. Local owners of small stores and restaurants and even big box stores are now very happy to take cash payment since the cc company can’t take 3% of small shops’ already slim profit margin. The owners who once looked askance at cash now smile. I pay cash (or with checks in stores that know me) in local shops because I want the local owner to keep the 3%, not the cc company.
My rule is to pay cash to small businesses, but use CC for Target type places, now matter how small the amount.
Thank you. It’s a great way to support local small businesses.
I think the answer to your question is: it depends on the crypto.
One of the rationales for cryptos has been that they are distributed, not issued by a CB, not controlled by a state, and are in principle very much opposed to all the types of surveillance and control that I sketched out above for CBDCs.
Now, whether cryptos can actually deliver on all of this is rather debatable. Some coins are rather more serious about security than others, and would make it quite difficult to access your personal information. Bitcoin offers some security through anonymity, but it hasn’t really evolved in this regard since its inception and there are other cryptos that do a much better job.
One recent and amusing example to illustrate: in the wake of Musk’s poll on whether he should step down from Twitter (a majority voted ‘Yes’), none other than Edward Snowden tweeted that he would accept Bitcoin as payment (i.e., for becoming the new CEO). Snowden has been critical of the security of Bitcoin, but in this instance BTC would make it possible for him to receive payment in Russia from a US-based Twitter.
Of course, if this happened, we could expect the collective West to very quickly train the regulatory crosshairs on Bitcoin and open fire (the laser target is already there), but even if the entire blockchain cloud were attacked and taken down (and with 14,500+ nodes all over the world, good luck), Snowden could then say “okay, so pay me in Stellar (XLM) instead” and it would be a whole new game of whack-a-mole.
As Nick’s article points out, states are moving forward in a way that will close the doors on cryptos, but I personally take cold comfort in CBDCs as some kind of ‘alternative’. The potential for surveillance and abuse is just too great.
You might not claim all these things will happen, but I will. Bet on it. But make the bet in cash if you don’t want to be surveilled.
Cash well may be irrelevant to your life at the moment. What happens if the infrastructure upon which these electronic conveniences depend fails? And, are you genuinely not troubled by the fact that all your financial activity is open to anyone within the so-called ‘Intelligence Community’ who might care to look? Also keep in mind that what is delivered digitally can be withdrawn digitally. Digital assets make civil asset forfeiture actions a matter of trivial effort for police in any jurisdiction that allows this questionably legal practice.
I do not have a complete answer to your question, but you should consider two crucial points:
1) We are talking about a central bank digital currency. In principle, this should mean that the central bank is issuing the currency and managing the accounts. Contrarily to the money in an account at a commercial bank, which is always at risk of disappearing when the bank goes bankrupt (except for the 100000€ guaranteed by State insurance schemes), the amount in a central bank can never be lost.
If the central bank regulates the digital currency, but does not manage the accounts, then we only have a national digital currency — but not a central bank one.
2) Cash has a fundamental property that is not found in (digital) accounts: transactions can be effected between people without going through an intermediary, i.e. through a bank payment and settlement system. Or if you prefer, it is peer-to-peer; no need to involve a bank — actually, this is why cash is so important for people who simply cannot get a bank account.
A genuine digital cash would enable that, i.e. exchanging or transferring amounts between wallets without going through bank accounts or payment/settlement systems. There were attempts to develop such systems in the late 1990s-early 2000s (Mondex, I think), but they failed.
Will the proposed CBDC fulfil both aforementioned properties? I doubt it, and I believe they will be configured in priority to enable supervision and control, not facilitating banking, or reducing costs and risks for customers.
The scheme that comes closest to a digital currency with linkage to cash are the various M-Pesa systems in Africa. One can transfer money electronically to anybody via a mobile phone (and it does not need to be a smartphone), including in such small amounts that banks refuse to handle, and at a cost that no commercial bank can compete with. One can go to a mobile phone shop, deposit some cash, and have the amount credited to the M-Pesa account. One can also show one’s M-Pesa account and get a sum debited from it and paid out in cash. M-Pesa is one of the multiple ways to pay one’s taxes. Mobile telecommunications operators manage M-Pesa, and yes, they have an appropriate bank license to do it. ApplePay, GooglePay and all such schemes do not even come close to the flexibility and cost effectiveness of M-Pesa. Interestingly, it is not available in Nigeria…
Once the server with the database of citizens’ accounts gets hacked, you’ll lose all your digital currency. Making a phone call to complain will only result in a recording: Liisten carefully as our options have changed but your options are the same. To better serve you, your call will be recorded. Your call will be answered in the order it was received. Press 1 for more options. Press 1 for more options. Press 1 for more options………”
Same problem happens if brokers and card processor’s servers go down or get hacked. I can’t see why I need something different that suits my financial need already.
“A genuine digital cash would enable that, i.e. exchanging or transferring amounts between wallets without going through bank accounts or payment/settlement systems.”
Are you talking about a blockchain based distributed system? How will it support the required number of transactions?
Blockchain requires intermediaries — the miners. A true digital cash with peer-to-peer transactions mean something like this: I and the counterpart have each digital cash in form of e.g. a wallet in a phone or a card, or whatever specialized device. We meet, bring our wallets close to each other and exchange the money (via NFC or Bluetooth). No need to send anything through a bank, or broadcast whatever transaction parameters to thousands of miners for a validation.
To make it concrete: this is how electronic business cards have been exchanged between mobile phones for two decades via Bluetooth, without having to involve the telecom operator. Replace business cards with money, telecom operator with bank, and there is the equivalence.
There were attempts to devise some schemes like that 20-25 years ago, but they floundered. I seem to remember that banks did not appreciate the fact that they could not deduct transaction fees, and that authorities did not like the idea of unlimited amounts of “cash” being exchanged without control — among other issues.
Even by the standards of the big casino on Wall Street, Crypto is a transparent scam.
Just ban it.
Don’t forget that with digital currency there will be no lower bound on interest rates. With cash, at below zero interest rates, you put your $ “under the mattress,” but with digital you’re stuck with deflating savings.
It can be programmable, it can be issued with digital restrictions on its use, it can be issued with a time limit with which it is spent. As Augustin Carsten, head of BIS, said:
Bank for International Settlements head Agustin Carstens about CBDC and control
https://www.youtube.com/watch?v=rpNnTuK5JJU
adding: the ‘cross border payments’ argument is a red herring. No one is concerned about $100 dollar bills in cross border payments. Cross border payment systems already work well with electronic transfers. Cross border payments have nothing to do with the CBDC scheme.
There is a formatting mismatch under the header “A Template for the World”, and it’s missing the percentage the Indian UID scheme covers.
In the article about the Nigerian moves to force people away from cash there was speculation that it might backfire and actually encourage people to remove their cash from the system. Are there any studies or predictions on the likelihood of that happening in a larger economy? I know that I’d feel better without these cyberpunk trappings put on top of everything.
Formatting sorted. Missing percentage of Indians covered by UID (92%) has also been inserted. Thanks for the heads-up JM, you’re a star.
As for your question regarding Nigeria, I do not know of any other country currently thinking of limiting cash withdraws in such a drastic way. But as I noted in that article, CBs will be watching closely and learning.
How will the credit cards crooks make money in the event of a switch to CBDC? No worries. Congress will create a provision for them to get a cut.
Good question.
I would guess credit card payments would still be allowed. But those are not anonymous and I’m sure the governments have access to that data.
I view these developments in India (eliminating cash, digital IDs etc) as “dry run” for western powers. I would think that a significant number of ornery Americans will not welcome digital currencies. I suppose that gold would have to be outlawed if CBDCs become a reality and if cash or large bills are eliminated (although the idea of a $100 note being a “large bill” becomes more eroded everyday).
You might be surprised. Most people don’t seem to understand the implications, don’t think for themselves, prize “convenience” above all else, and welcome their new authoritarian overlords with open arms.
Recently I noticed a couple local businesses that weren’t allowing any cash payments. I spoke to our city manager about it, thinking US currency must have to be accepted by US businesses and that this would be a mere enforcement issue, and found out this was not the case. The Federal government already does not require businesses to accept cash as payment, and states and municipalities must pass their own laws requiring cash to be accepted if they don’t agree with the Feds. When I tried to get an ordinance passed in our town, they barely let me speak, called in the head of the “Economic development Committee” who spoke at length against my proposal, and it was shot down in a hot minute. I don’t think most of the city council even understood what I was talking about since some of them seemed to think I was saying businesses could only accept cash. Our very liberal immigrant mayor who comes from the poorest district in the city just spoke about how much she loved Venmo, which in no way did I ever say shouldn’t be allowed. I would have thought that she of all the councilors would have been in favor of my proposal, but no.
Our city is pretty much unaffordable for pretty much anybody in the working class at this point. The councilors wring their hands about what to do to help lower income people, but when presented with a fairly simple idea that could actually benefit the less fortunate, they won’t even consider it. Once again, cue the Phil Ochs.
Regarding the climate “benefits” to digital currency, I’m going to go out on a limb here and suggest that any benefits to trees from eschewing paper currency will be far outweighed by the power needed for all the servers brought online to store all the CBDC digital records for ever and ever amen, power which is already frying the planet.
Especially if blockchain is used in any form to implement that CBDC, though the hype about it for banking applications is deflating fast following dismal experiences (e.g. in Australia).
Money that you can only use on certain things.
Money with an expiring date.
Money that tracks your every single transaction.
Money that can dissapear if you disagree.
All that and much more, coming to you in the near future via CDBCs!