The mass adoption of national digital currencies could lead to problems. What is wrong with such money?
Programmable money can be a huge problem for society, and not many people realise it yet. That was the statement made by Influencer Laya Hailpern the day before. According to her, central bank digital currencies (CBDC) are created specifically to control the flow of funds to customers of financial institutions, with banks clearly preparing to push the concept to the masses under the guise of “environmental friendliness”. We tell you about what is happening in more detail.
As a reminder, CBDC is an electronic currency of the monetary regulator, denominated in the national unit of account and serving as a means of payment, measurement, and storage of value. Simply put, it is a national currency, but only in digital form. Cashless payments have been made around the world for a long time, but the concept of CBDC allows the Central Bank to more accurately track almost any financial flows within the country. In addition, this tool will allow restricting payments to undesirable destinations.
What is the main problem with CBDC?
In a recent interview, Halpern said the CBDC is a sure path to financial censorship in the future. According to her, central banks develop essentially the same cryptocurrencies, only they can be “programmed against the public” at any whim of a financial institution. Here’s a relevant quote.
If for some reason you say the wrong thing, because you are aware of serious censorship, the money can be programmed to be used against you.
That is, she believes that restrictive measures against certain people would be much more popular in the case of digital money. And possible blocking would be much faster, too.
Hailpern added that while many people may find the concept “rather odd”, it’s quite realistic given the restrictions governments impose on unvaccinated people today.
With CBDC, all the government has to do is program this money so that you can’t spend it on certain things.
According to Cointelegraph sources, CBDC will also be promoted as “the best solution for the environment” and “a means to combat rising inflation”. Naturally, it’s all just a ruse – the CBDC will supposedly go to any lengths to maximise CBDC’s distribution to the public. The analyst continues.
Central banks’ digital currencies will be promoted as the best means of protecting the environment and solving the problem of inflation. This is a lie. Money is the energy that powers your life, so programmable money should scare you.
In addition, the theory that a digital version of money is supposedly the best solution to inflation is ridiculous. Still, in this case, the government will still have the leverage to increase the money supply. And it will definitely use them.
CBDC adoption rates across Europe as of 2021
Unfortunately, the first signs of censorship have been seen in the cryptocurrency industry for quite some time. One recent example of this is the US government sanctions against cryptomixer Tornado Cash. Many even fear that they could set a precedent for other significant restrictions on the freedoms of crypto-enthusiasts. In addition, major platforms with US roots have already blocked interactions with wallets that transacted with Tornado Cash.
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Concerns about censorship seem to be with many cryptocurrency holders, so they prefer to use Bitcoin for now. According to analytics platform Glassnode, the volume of BTC that hasn’t moved in cryptocurrency wallets in more than five years reached a record 24.39 per cent of the major cryptocurrency’s supply the day before. That is, of the 19.12 million bitcoins already mined, almost a quarter have not moved since 2017.
BTC volume growth without movement over the past five years
Against the backdrop of the current poor market performance, this data looks very promising for investors. The fact that a significant portion of BTC has not moved in several years shows the confidence of many market players in long-term investments in crypto.
A similar story can be seen with the dynamics of Bitcoin’s “activity” metric, a calculation of investor behaviour, which this week reached its lowest level since early 2021. This metric is calculated as a score from 0 to 1, which increases or decreases depending on how much BTC is sold by long-term investors.
Bitcoin’s “activity” metric
Overall, Bitcoin continues to “settle” on cryptocurrencies for a variety of reasons. Of the aforementioned quarter of the coin supply that hasn’t moved in over five years, a certain proportion may simply be lost Bitcoins. However, this does not negate the fact that there has been a general decline in the supply of BTC – that is, fewer and fewer bitcoins are available for purchase each year. Accordingly, as demand for the cryptocurrency increases, this factor creates ideal conditions for its price to rise.
We believe that such comments about digital national currencies are not exaggerated. Still, events earlier this year in Canada showed that authorities can easily freeze certain people's money if their activity makes officials uncomfortable. And in the case of e-money, such action would prove even simpler. Be that as it may, all of this creates an additional reason for ordinary people who value their independence and freedom to connect with full-fledged cryptocurrencies.
What do you think about this? Share your opinion in our Millionaire Crypto Chat. There we discuss other important details about blockchain and decentralisation.
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