CBDC: Do you expect a quick start?

Today, almost all central banks consider the prospect of issuing their own "digital money" - CBDC (Central Bank Digital Currency). For financial authorities it is certainly interesting to have such a tool as "programmable money", which can be tracked online anywhere and at any time. Just imagine: the Central Bank knows who has every banknote now, what path it has taken and for what purpose it has been used. From a control point of view, this is the dream of every finance minister and central bank governor. What could be better than a fully managed financial system?

However, CBDC has several other dimensions that make the prospects for its widespread use far from obvious. 

Above all, CBDC’s issuing and managing entities gain enormous power over business. Theoretically, this power should be used solely for good. But our experience suggests that this power will be used to gain competitive advantages for select elite groups. This is a clear violation of business freedom and an attempt at state regulation. This prospect is fiercely repudiated by supporters of "pure" traditional capitalism, such as Donald Trump. The line of ideological confrontation passes here, and compromise will be very difficult. Other natural opponents of CBDC are banks, for the simple reason that for digital currencies, banks are simply not needed as intermediaries between the CBDC and consumers. CBDC is not tied to a bank account. 

CBDC is particularly active in developing countries such as China and Russia. That is, those who are clearly dissatisfied with the established financial system. At the same time, financial leaders (the U.S. United Kingdom) are much more cautious and prefer to talk about tokenization, but not about their own digital currency. The crypto community is also skeptical of the idea of CBDC and.

So, we should hardly expect a global CBDC to emerge any time soon.

#CBDC #DigitalCurrency #FinancialControl #CentralBanking #EconomicPolicy