Central bank digital currencies (CBDCs) are digital money, but they are not cryptocurrencies. The differences between CBDCs and crypto are important. Let’s have a look at it:
Cryptocurrencies are recorded on a blockchain, a ledger that shows every transaction ever made in each currency. Cryptos also claim to offer anonymity and decentralization. Government narratives suggests it is great cover for crime and fraud. But this is wrong because it might be very difficult to discover, but it can be done.
CBDCs have a digital ledger accounting system but does not use blockchain. They are centralized under the control of the issuer, the central banks. There is no anonymity, and the issuer knows every account holder and every transaction. Of course, this is the whole idea. CBDCs are promoted on the idea that transactions are faster, cheaper, and more secure when all money is digital and controlled by a government.
Along with this benefit comes the loss of freedom. If governments know exactly what you are buying, you donate to, and what you are reading based on which books or newspapers you buy, then we have come very close to thought control, censorship, selective law enforcement against political enemies, that looks like the state ruled by “Big Brother” in George Orwell’s book “1984”.
The one objection you always hear is “that will never happen here”. Oh boy, how wrong is that. Sorry, but it is already happening now. We are already out of the research and development phase. The US Federal Reserve, in cooperation with giant global banks, has launched a 12-week pilot project to test the message systems and payment processes on the new CBDC digital dollar. A pilot project means, it is already there. They just want to test the system before it gets rolled out on the entire population.
CBDC is probably introduced much quicker than most expected. Once the CBDC is rolled out, the government will order citizens to hand in their physical paper cash. At that point, citizens have to get prepared for potential negative interest rates, account freezes, tax withholding and outright confiscation for those with the wrong views, determined by a social scoring.
Get ready for Big Brother. Maybe you should start acquiring gold and silver coins, diamonds or other high value but fairly liquid assets.