As central banks worldwide continue their race to create Central Bank Digital Currencies (CBDCs), discussions about the potential risks of "digital money" are emerging, especially regarding personal freedoms and social rights in a world where cash usage is diminishing.
In London, the birthplace of the western banking and financial system, the central bank is working on creating the "digital sterling."The Bank of England (BoE) officially announced in February 2023 that they are developing a digital currency, which will be supported by the BoE and accessible through a "digital wallet" provided by a private company.
However, concerns have been raised about the transparency and protection of personal rights when relying on a private company for financial services, despite the BoE's endorsement.One of the main concerns is the freedom to spend the digital currency without limitations. Experts are worried that algorithms used in the future could restrict spending based on credit scores and disapprove of certain expenditures deemed risky.
The influence of algorithms in people's lives has grown significantly, and experts believe they will play a critical role in controlling digital currencies.
The planned "digital sterling" is primarily seen as a payment system rather than a form of savings, as it will not generate interest.Richard Werner, a prominent economics professor and creator of the term "Quantitative Easing," expressed skepticism about the necessity of central bank digital currencies. He argued that people already have numerous payment options, making CBDCs unnecessary.Werner highlighted the programmability of digital currencies, which could allow controllers to dictate how and when the currency is used. He warned that this programmability could lead to a loss of financial freedom and create a form of control.Werner cautioned that without public pressure, central bank-developed digital currencies could evolve into a totalitarian control mechanism.
In the UK, there has been a recent push to encourage the use of cash, with slogans like "Cash is freedom, use it or you will lose it" appearing on business storefronts.
Furthermore, it's worth noting that the planned digital sterling in the UK might not be accessible through savings accounts and could potentially be frozen, mirroring similar situations in Australia and Canada.
