China’s Digital Yuan Is a Disaster for Freedom
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| By Jurica Dujmovic |
According to the Digital Dollar Project, the U.S. Federal Reserve is waiting for Congress to initiate legislation on central bank digital currencies before proceeding further with implementation.
When asked about the timeline, Michael Greco, policy research director at DDP, said that "there is potential in the next few years" for a digital dollar in the U.S.
CBDCs, or virtual money backed by central banks, are inching ever closer to the global market. Chances are you will probably find yourself using them at some point — whether you like it or not.
So, how bad is it?
First, let's define what CBDCs really are.
CBDCs are digital forms of money that are issued and controlled by central banks. (Think the Fed, the People's Bank of China, the Bank of Japan, etc.)
They offer potential advantages, such as faster settlement times for transactions and the ability for central banks to experiment with new types of policies.
But if you look at what's happened in China, you'll see the risk they pose to personal freedoms.
The country's digital yuan comes with an expiration date. Authorities can also simply take it away if their citizens misbehave.
The Cato Institute published an interesting quote by Cornell economist Eswar Prasad, from his book, "The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance."
"Digital central bank money is only as strong and credible as the institution that issues it."
More importantly,
"In authoritarian societies, central bank money in digital form could become an additional instrument of government control over citizens rather than just a convenient, safe and stable medium of exchange."
Indeed, China has no free market, no human rights protections and no genuine rule of law; only the omnipotence of the government itself.
Using its social credit system, digital IDs and now its digital yuan, the Chinese Communist Party has established total and automated surveillance and power over all its citizens.
- Using digital ID systems, it can track and locate individuals.
- Now the digital yuan enables it to track any and all expenses, PLUS freeze accounts based on their social credit score!
During the recent White Paper Protests, the CCP was able to utilize these tools to locate, identify and punish those who tried to challenge the party by participating in public outcries.
If this sounds like something that would never happen in the West, just remember the recent trucker protests in Canada.
If Justin Trudeau, Canada's prime minister, had a CBDC in place back then, he could have been able to limit, reduce or freeze assets of all "perpetrators" … much faster and more thoroughly than how it actually happened.
It's typical for governments to want to seize power from their citizens. So no matter what country you are in, it's smart to pay close attention to its plans to implement a digital currency.
And it's not just the central banks you want to watch ... the Bill & Melinda Gates Foundation is financing research into a CBDC and digital identity program combo.
Although the U.S. and many other countries are years away from developing, let alone implementing, their own digital currencies, it's not unreasonable to expect that users get the short end of the stick.
Even on their best day, CBDCs still give unparalleled surveillance powers to a government. And if Edward Snowden and Julian Assange taught us anything, it's that no government in the world can be unequivocally trusted.
Even if governments worldwide decide NOT to financially oppress their citizens, it's a given that they'll keep doing what they did in the past: bailing out banks and other favored institutions.
Additionally, CBDCs could also potentially limit the ability of individuals to use alternative forms of currency, such as cryptocurrencies.
If the government has complete control over the money supply and only allows the use of CBDCs on "approved goods and services," it could restrict the use of other forms of money and limit individuals' financial freedom and choice.
Thus, it's not beyond the realm of possibility that CBDCs could be used to deal a powerful blow to the crypto market.
Governments could potentially outlaw non-compliant cryptos and any other goods or assets they deem inappropriate.
Does this mean, then, that crypto's days are numbered?
Not by a long shot.
Cryptocurrencies were created as a direct response to the inadequacies of the traditional financial system. And they won't be toppled by yet another centralized system.
When CBDCs arrive in full force, as I expect they will, cryptocurrencies will show their own power of adaptation, flexibility and ability to shift from one form to the next …
All the while avoiding Big Brother's oversight.
Just like it has in the past, crypto will enable citizens wronged by the system to survive and thrive by transacting on an alternative layer.
There will always be a gray zone — a layer of online and offline interactions in which unapproved transactions take place.
Various organizations like Chainalysis will try to catch the culprits. But they will always be one step behind the ever-evolving world of crypto.
However, crypto won't just be there for those who need it to survive. It will be there for everyone and anyone who appreciates their financial freedom enough to fight for it, including investment pros and average Joes.
All the while, they'll be using a system that remained rock solid and dependable amid all the controversies and theft: decentralized finance.
Having these users invested in crypto will not only allow it to weather any possible storm, but also to thrive in spite of it.
So, no matter what happens, crypto will remain the only truly independent asset in the world.
It will continue to be a go-to choice of those who value their financial freedom.
And the Weiss Crypto Team will be here to ensure you know which ones are the best to invest in … which to avoid … and what you need to know to position for profits and protection at all times.
Best,
Jurica
