It is estimated that there could be 15 CBDCs in circulation by 2030 but currently, there are just 4: eNaria in Nigeria, Sand Dollar in the Bahamas, DCash in the Caribbean, and e-CNY in China.
Central Bank Digital Currencies (CBDCs) are rapidly gaining ground in the global financial arena, becoming the subject of fervent political discussions and debates. The recent statement by US Republican legislator Tom Emmer, who compared CBDCs to a "CCP-style surveillance tool" (Chinese Communist Party), is just one of the many controversial aspects of this financial transformation.
The CBDC move is now a reality, with around 130 countries around the world developing their own digital versions of national currencies. But while some experts argue that the adoption of CBDCs is inevitable, both Republicans and left-wing privacy advocates in the United States express deep concerns.
One of the main concerns discusses the surveillance and control of citizens. CBDCs will allow governments to monitor the financial activities of citizens in more detail than is possible with traditional currencies. This could have significant implications for individual financial privacy. Furthermore, governments could use CBDC to impose restrictions on the types of transactions that citizens can make, creating an environment in which citizens may find their financial choices limited.
Another cause for concern is the possibility that CBDCs could be used for political or social purposes. For example, a government could program money through smart contracts to impose limits on what citizens can purchase, such as tobacco, alcohol, or junk food. While these policies may be presented as well-intentioned, they could also represent a step towards excessive state control, with potentially negative consequences for individual freedoms.
A particular point of concern is China, which is experimenting with a digital yuan. Given that China’s social credit system is notorious for extreme surveillance and control, the prospect of a digital yuan has raised international concerns about privacy and financial freedom.
Despite these legitimate concerns, CBDC advocates argue that these digital currencies represent a natural evolution of payments and can be used to include unbanked people in financial systems and streamline services such as welfare payments. Many believe that privacy can be preserved through thoughtful design and implementation of policies and technologies that protect citizens’ financial data.
In the UK, for example, the Bank of England is planning CBDCs involving private third parties to provide wallets or accounts to consumers, preventing the government from accessing transaction data. This approach is seen as a way to ensure that CBDCs can be used safely and without abuse.
Despite intense discussions and legitimate worries, the adoption of CBDCs is progressing slowly. While many central banks are working on CBDC projects, many of them are still in the consultation stage, and the US Fed has stated that it will not proceed without support from Congress.
According to the latest data from the Bank for International Settlements, 93% of its member central banks are working on a central bank digital currency: it is estimated that there could be 15 CBDCs in circulation by 2030 but there are currently just 4 (eNaria in Nigeria, Sand Dollar in the Bahamas, DCash in the Caribbean, e-CNY in China).
Original article published on Money.it Italy 2023-09-30 07:00:00. Original title: CBDC, le valute digitali delle banche centrali non decollano
