Former intelligence expert Edward Snowden recently launched a scathing attack on CBDC and expressed apprehension about its proposed use cases in a blog post titled, ‘Your Money AND Your Life- Central Banks Digital Currencies Will Ransom Our Future,’. According to him, Central Bank Digital Currency, or CBDC as it is more commonly known, is a policy instrument designed to systematically eliminate every wage earner’s savings resources and induce deliberate spending in the economy. He stated,
What is a Central Bank Digital Currency, you ask? Oh, you know: just a “useful policy tool” for casually annihilating the savings of every wage-worker in the country if they don’t spend them fast enough.
CBDCs are in general, digital replicas of fiat currencies backed by region-specific governments and modern banking systems. It is noteworthy to mention that the introduction of Facebook-owned stablecoin Diem [previously Libra] back in 2019 acted as a catalyst that triggered a global race to build a virtual currency pegged to their respective fiat currencies. That suddenly changed when the COVID pandemic paralyzed major economies around the world and brought a disruption to the traditional economy and that is how it propel the renewed interest in CBDC.
Even though governments and central banks around the world are banking on CBDCs and touting them as a contender to cryptocurrencies, privacy advocates like Edward Snowden expressed fear that these digital currencies might act as exploiting tools. He went on to further deem CBDC to be a ‘perversion of cryptocurrency,’ terming its core principles and protocols as a cryptofascist currency, meticulously designed to deny the basic ownership rights of an individual’s assets by positioning the state as the caretaker for every transaction.
Many countries have started working on their respective central bank digital currencies. However, China is leading much ahead among major economies and has launched its first whitepaper on the digital Yuan this year, and is currently exploring the possibility of integrating into a blockchain as its core CBDC is centralized.
Countries such as Nigeria have already rolled out their own CBDC called e-Naira on a pilot basis this month. The project is significant amid negative crypto sentiments among state officials. Surprisingly Nigeria is among the top tech enthusiasts African country with more than 30% of its citizens owning cryptocurrencies.
While the United States is still lagging in this global race, countries such as Bahamas and Sweden with their very own ‘Sand Dollar’, and ‘e-krona’ respectively pioneering the frontier.