The Cato Institute, a Washington-based libertarian “think tank,” has produced a comprehensive analysis of the threats posed by central bank digital currencies (CBDCs), which many countries throughout the world, including the United States, are now exploring to avoid falling behind in the current technology revolution.
The April 4 of 2023 report, highlights the risks and costs associated with this technology, which is both unnecessary and invasive. As such, the institute urges Congress to ensure that the federal government does not issue a CBDC.
New: @EconWithNick explodes myths of central bank digital currencies (CBDCs) and exposes the key risks. https://t.co/7lqW18UhG4 @CatoCMFA
— Cato Daily Podcast (@CatoPodcast) April 4, 2023
While CBDCs don’t specifically benefit Americans or people in other nations, they certainly pose a severe threat to financial privacy and economic freedom. It appears that all of these nations are advocating the release of digital versions of their national currencies in an attempt to strengthen government control over payment networks while endangering personal freedom and privacy.
The supposed benefits of CBDCs are nonexistent, and the risks are too high to ignore.
CBDCs render an unacceptable and unconstitutional level of surveillance
According to the Cato Institute, a CBDC would provide a direct connection between the federal government and each citizen’s financial activities, giving it full visibility into every financial transaction.
Moreover, governments and financial organizations will be able to follow every transaction, thanks to the abundance of data at their disposal.
Policymakers, for example, may try to reduce drinking by limiting nightly alcohol purchases or forbidding purchases for persons who have committed alcohol-related offenses. Also, parents could program their kids’ lunch money with the restriction that it cannot be used to purchase sweets.
“A U.S. CBDC poses substantial risks to financial privacy, financial freedom, free markets, and cybersecurity,” the Cato Institute concluded. “Yet the purported benefits fail to stand up to scrutiny.”
The recent report from the Cato Institute should serve as a warning to those blindly pushing for the implementation of CBDCs.
Apart from other grave risks posed by the so-called central bank digital currencies (CBDCs), they would also impede the effectiveness of private “decentralized” cryptocurrencies, including Bitcoin (BTC) and stablecoins.
The launch of Central Bank Digital Currencies (CBDCs) is nothing short of a disaster waiting to happen, and the fact that many countries are exploring this technological nightmare is not only concerning but extremely frightening.
CBDCs are a terrible idea that should be strongly opposed by anyone who values privacy and freedom. Governments should rather focus on improving existing payment systems, including truly decentralized cryptocurrencies, instead of pushing to implement this invasive and unnecessary “CBDC” innovation. The risks are simply too high, and the benefits are nonexistent.
It is, therefore, important for individuals to educate themselves on the potential dangers of CBDCs and advocate for alternative solutions like digital currencies that prioritize decentralization, privacy, and freedom.
