Discussions about central bank digital currencies (CBDCs) have been trending on social media over the weekend, with many people expressing concerns about the potential for increased financial surveillance and a totalitarian monetary system. Lynette Zang, the chief market analyst at ITM Trading, recently warned that CBDCs could lead to a “full surveillance economy that can be controlled directly by the central bank.”
Opposition to CBDCs has been expressed by well-known influencers and politicians worldwide. Former Congress member and 2020 U.S. presidential candidate Tulsi Gabbard recently criticized the idea, stating that the Biden administration aims to implement a CBDC to bring about a cashless society, allowing them to track everything people purchase and control their money. Gabbard added that the government’s “Fednow” system is needed as the first step to achieve their dream of a cashless society and that it needs to be stopped at its inception, or it will be too late.
The U.S. central bank’s Fednow program has sparked much debate in recent times, and just recently, the Federal Reserve asserted that the project was not a digital currency, CBDC, or cash replacement. Other discussions have centered around the Bank for International Settlements’ (BIS) CBDC pilot, Project Icebreaker. BIS recently released a video about the project, and people have commented on the organization’s statements.
Natalie Smolenski, senior fellow at the nonpartisan, nonprofit organization the Bitcoin Policy Institute, criticized the Project Icebreaker video, stating that all of the benefits of this CBDC interoperability project can already be realized by the bitcoin Lightning Network. Smolenski believes that CBDCs are completely unnecessary and that there is no problem that they solve. According to the Atlantic Council’s CBDC Tracker, 114 countries are working on CBDCs, and 11 countries have fully launched implementations.
Lynette Zang, the chief market analyst at ITM Trading, has warned about the dangers of CBDCs in a recent video with Michelle Makori, the lead anchor at Kitco News. In her discussion, Zang talked about the collapse of Silvergate Bank, Silicon Valley Bank, and Signature Bank and claimed that the failures were “by design.” Zang believes that a CBDC will usher in a totalitarian monetary system that will become the economy’s new norm. She explained that “they need a big enough crisis so that people will agree to this next iteration, the CBDCs. It also takes the world into a full surveillance economy that can be controlled directly by the central bank if all of your wealth is held inside the system.”
Zang believes that with CBDCs, negative rates will be imposed on people’s bank accounts, and individuals’ principal will be threatened. “Central bank digital currencies are really about control, and also about the ability to take away principal,” Zang said. “Negative rates attack your principal… When they come out with a CBDC, it doesn’t mean that this crisis is over. It’s just the next phase of it.”
Not everyone opposes the concept of CBDCs, and in a recent opinion editorial, the Keynesian economist Paul Krugman criticized Florida governor Ron DeSantis’s recent opposition to a central bank digital currency. Krugman referred to the hostility as resistance against “woke money” and claimed that DeSantis may be motivated by “general paranoia.” On Twitter, Krugman also opined that the dissent toward CBDCs may be “tied in with a broader push by monetary conspiracy theory types” and claimed the theories have been a “right-wing thing for a while.”
In conclusion, discussions about CBDCs have been trending on social media recently, with many people expressing concerns about the potential for increased financial surveillance and a totalitarian monetary system. While some individuals oppose the concept of CBDCs, others believe that they could be beneficial. As the debate continues, it remains to be seen how CBDCs will impact the global financial system in the future.