Against the UK's "Digital Pound" CBDC - we're going to lose our financial freedom
13th September 2023
The Bank of England is working on releasing the "Digital Pound", a CBDC - or Central Bank Digital Currency. The way this would work contrasts the current system; instead of a nation's currency being in the hands of somewhat decentralised banks and institutions, its currency will be in the sole hands of the central bank. Or, the Bank of England for the UK.
From reading the Bank of England's FAQ, I could deduct four main reasons for the Bank of England releasing a CBDC:
- "digital payments are becoming more and more common"
- "new forms of money are emerging and some of these could pose a risk to financial stability"
- "the digital pound could help us maintain trust in money and protect our financial system"
- "[to][improve] payments by increasing efficiency and enabling innovation"
Whilst the first and final objectives make sense and are reasonable, I see two major issues with the other two aims. I cannot argue with the fact that digital payments are more prevalent, or that it would be nice to have more efficient payments.
The third point, about trust and stability, is useful for an economy, but forcing one form of a centralised & censored currency without interoperability defeats the aim of promoting efficiency & innovation. With the second point, I feel that they are referring to decentralised crypto assets. These would not interfere with financial stability, as they are designed to be stable from the ground up, as opposed to the traditional financial system being designed to protect the few at the expense of the many.
The Bank of England is making a weak argument for why they should introduce its CBDC. They admit that there are other ways to improve the financial system: why don't they at least discuss them, or even better - work on them themselves. Why do we have to totally abandon cryptocurrency and other technologies in favour of a new CBDC, without the CBDC organisers even researching alternative technologies?
It seems to me that the Bank of England is trying to compete with, and eventually abolish decentralised financial systems in order to gain even more control over everyone's finances. No wonder they support the ESG - with the G standing for governance.
I also have many other problems with the wording of the proposed CBDC. One of the questions in their FAQ is "Why do we need a limit for how many digital pounds I can hold?". The Bank of England then explains that having a limit "[gives them] time to understand the impact that [the CBDC] would have on the financial system.". This is yet another inadequate response. What are the plans for removing this limit? How would limiting someone's wealth help with the development of the CBDC? I predict that once a large proportion of the UK's population adopts the CBDC, the Bank of England will scrap any plans or aims to remove this limit, and the average person will be totally oblivious to how they are slowly losing their freedoms, right in front of their eyes.
This is why I want to promote and encourage the use of decentralised services, and for people to protect their privacy. If we do not protect ourselves from the government, it will be a slippery slope to our entire loss of privacy, rights & freedoms.