• Central Bank Digital Currencies (CBDCs) may not be the best thing for America right now.
• The Chinese CBDC was seen by some analysts as allowing too much surveillance of users.
• There are underlying problems in using a CBDC, including the current U.S. administration’s ties to China.
What is a Central Bank Digital Currency?
A central bank digital currency (CBDC) is a digital asset issued by a centralized bank, such as Wells Fargo or Bank of America, and is treated similarly to paper money. Recently, China unveiled its own version of a CBDC, which raised concerns over surveillance on users and infringement on crypto independence.
Should We Pay Attention to a CBDC?
Some believe that issuing a CBDC would bring the crypto arena to its highest level, reaching mainstream appeal that would be undeniable even to the most hardcore deniers. However, there are several issues with this concept due to it coming from entities never designed to take part in the crypto space originally and not being invited when assets like Bitcoin first arrived on the scene many years ago.
Underlying Problems with CBDC
Governors like Kristi Noem of South Dakota and Ron DeSantis of Florida have recognized the underlying issues related to introducing and using a CBDC in the U.S., noting that privacy rights could be infringed upon due to its intrusive nature and potential for government control over citizens’ finances. Additionally, there is concern that due to current relations between the U.S. administration and China, any proposed American version of a CBDC could mirror Chinese models in structure and purpose – something that goes against crypto autonomy ideals established from the start of digital currencies .
Is There an Alternative?
Many experts suggest non-state based alternatives such as decentralized autonomous organizations (DAOs) or non-fungible tokens (NFTs). These options provide more autonomy for users than what traditional banks offer while still providing access to financial services without relying on government interference or censorship resistance capabilities like those offered by cryptocurrencies such as Bitcoin .
Ultimately, introducing a central bank digital currency into America right now may not be beneficial given all the risks associated with it – such as intrusiveness into user privacy rights – along with current relations between China and U.S leaderships making American versions potentially similar in structure and control purposes than their Chinese counterparts . For these reasons, alternative solutions should continue being explored that can provide individuals with financial freedom without sacrificing security or trustworthiness .