One man’s trash is another man’s treasure, as they say – and so what are some of the least desirable features of a central bank-issued digital currency (CBDC) to critics, are promoted as positive by those behind the push for CBDC adoption.
Thus, Bank for International Settlements (BIS) General Manager Agustin Carstens – likes the fact CBDC are programmable, and he also doesn’t mind “limits on privacy.”
Pretty grim stuff, opponents will no doubt say. First, the reference to “programmability” of this type of centralized digital money controlled by banks and governments concerns their ability to make the use of money restricted in a variety of ways.
It means the “user” – i.e., a person who owns that money – can be constrained in the way they are allowed to spend it. For example, they may be “allowed” to only spend that money on certain goods, or within a certain deadline, and even a physical location.
However, in an address on Wednesday to the BIS Innovation Hub-Financial Stability Institute, Carstens praised these possibilities, and even took it upon himself to speak on behalf of “people” when he said that, “people want their money to be digital and programmable.”
Carstens is betting on the willingness of said “people” to give up their rights, big and small, in exchange for some convenience, and so he explained that this supposed across the board passion for programmable CBDCs stems from the promise that cross-border transfers will be faster, cheaper, and, “safer.”
On the opposite end of CBDCs, which many see as yet another instrument of mass surveillance, are decentralized cryptocurrencies, but the BIS head dismisses those out of hand as “not money.” Reason being, they are not “backed” (i.e., controlled) by your “friendly” central bank.
And with government control, we come to the issue of privacy, and how CBDCs might affect that (though it’s pretty much a rhetorical question).
But points to Carstens for at least not shying away from making statements of like this (… he’s got nothing to hide /s):
“These (personal data protection) laws establish strong privacy protections but also limits to that privacy. We see the operation of some of those limits when we consider the safeguards that currently exist around the use of cash in the formal economy.”
The BIS general manager justifies this with the need to sacrifice “some” privacy at the altar of the financial system.
And so Carstens supports eroding the privacy of those who, for example, want to make large purchases.
