The Bank of International Settlements or BIS strives for “absolute control” over your money via central bank digital currencies as we are reading more in our latest cryptocurrency news today.
The General Manager of the Bank of International Settlements Agustin Carstens, sent a message regarding the future of the CBDCs and it seems that the BIS strives for “Absolute Control” over your money:
“We don’t know who’s using a $100 bill today and we don’t know who’s using a 1,000 peso bill today. The key difference with the CBDC is the central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability, and also we will have the technology to enforce that.”
What service does this provide that isn't already implemented by pretty every major private banking institution already?
— Danny OKeefe (@DAOKeefe) October 11, 2020
The scenario of crypto vs CBDC Shodown was largely played down in the past but Carsten’s beliefs exonerate the ones that warned of potential totalitarianism that the CBDCs can bring. Having this in mind, can we expect even tougher regulations and further restrictions on crypto as authorities look to clamp down on competition?
As recently as 2019, Carstens said that central banks don’t see implementing CBDCs soon but when considering the lack of demand and the operational consequences or bringing them about, there is a slight urgency to the matter:
“There is no clear demand for CBDCs on the part of society. There are huge operational consequences for central banks in implementing monetary policy and implications for the stability of the financial system.”
However, a few months later, Carstens signaled a major U-turn by saying there’s demand and it could be happening sooner than we think:
“It might be that it is sooner than we think that there is a market and we need to be able to provide central bank digital currencies.”
The data shows that 67 countries are researching, developing, and piloting CBDCs, and another study by the BIS titled “Central Bank Digital Currency: the quest for minimally invasive technology” found anonymity and decentralization as major concerns to a retail CBDC:
“We find that technological developments inspired by popular cryptocurrency systems – based on anonymity and lacking a central authority – do not meet the requirements for a retail CBDC.”
Many warned about the dangers of CBDCs in the past. Shapeshift CEO Erik Vorhees said that they offer nothing innovative and implied they will only benefit those opposed to freedom and personal sovereignty. The general response to this message was that the bank is trying to gain absolute control but it didn’t go well. Gabor Gurbacs who is the Director of Digital Asset Strategy at VanEck said that central banks are not tasked with having “absolute control” in saying how to spend your own money.
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