Why a ‘Digital Dollar’ Is a Really Bad Idea
The downsides are borderline dystopian.
By: Brad Polumbo
The widespread embrace of Bitcoin and other cryptocurrencies has left many government bureaucrats feeling left out. In a bid to get in on the action, many governments have floated the idea of a “central bank digital currency,” (CBDC) aka a government-issued cryptocurrency using blockchain technology. President Biden directed the federal government to explore this idea, and new reporting suggests the Biden Administration may soon press forward with efforts to create a so-called “digital dollar.”
“The U.S. Treasury Department will advise the federal government to press forward on work to issue a digital dollar, though it should only take the final step if there’s sign-off that the government-created tokens are in the ‘national interest,’” CoinDesk reports. “The question of national interest will depend on further approval of the Biden administration and – potentially – action by Congress.”
At first glance, government getting in on the crypto craze might sound fun, novel, or harmless. But it’s actually cause for serious alarm. A central bank digital currency would have none of the benefits of cryptocurrencies like Bitcoin—and serious drawbacks.
Why a Central Bank Crypto Wouldn’t Be Like Bitcoin
Any digital currency that uses blockchain technology can technically be called a “cryptocurrency.” But, as Bitcoin influencer and content creator Layah Heilpern has aptly explained, Bitcoin has unique properties that make it valuable. Namely, it is both permissionless—anyone can use it and can use it how they want—and decentralized, meaning there’s no central authority that can control the currency.
This latter part is especially important. Because no one can increase the supply of Bitcoin beyond its predetermined mining schedule, no one can arbitrarily erode its value like the US government has done with the dollar through money-printing.
However, a central bank digital currency would be neither permissionless nor decentralized. So, most of the benefits that a cryptocurrency like Bitcoin offers (and the value that comes with them) wouldn’t be on the table.
The Downsides Are Borderline Dystopian
Of course, if a “digital dollar” was just kinda useless, that wouldn’t be the end of the world. But it’s much worse than that. While a central bank digital currency would offer none of the benefits of Bitcoin, it would offer governments new, unprecedented ways to control citizens. To call the idea rife for abuse is an extreme understatement.
After all, a central bank digital currency would allow the government to track your every purchase. It could also be easily used to restrict purchases.
For example, imagine a future government deciding that gasoline must be rationed in order to address climate change. Your “digital dollars” could be made to stop working at the gas pump once you’ve purchased a certain amount of gasoline in a week. In this way, a central bank digital currency would open up new avenues for the government to assert control over our everyday lives. It would make our wealth and incomes less truly our own.
If any of this sounds extreme, fantastical, or otherwise far-fetched… well, just look at China.
The Takeaway
So, when the Biden administration publishes its report and advocates for the creation of a digital dollar, the public shouldn’t treat the idea merely with intrigue or disinterest. We need to speak out and oppose this idea—or we may well live to regret it.
••••
The above article (Why a ‘Digital Dollar’ Is a Really Bad Idea) is republished here with permission and attribution to the author Brad Polumbo and Foundation for Economic Education.
TLB recommends that you visit the Foundation for Economic Education (FEE) for more great articles and info.
About the above articles Author: Brad Polumbo (@Brad_Polumbo) is a libertarian-conservative journalist and Policy Correspondent at the Foundation for Economic Education.
Image Credit: Photo in Featured Image (top) – by Gerd Altmann from Pixabay
••••
Read more articles by Brad Polumbo
••••
Checkout TLBTalk.com:
Click Here to Visit the TLBTalk.com Site
••••
••••
Stay tuned to …
••••
The Liberty Beacon Project is now expanding at a near exponential rate, and for this we are grateful and excited! But we must also be practical. For 7 years we have not asked for any donations, and have built this project with our own funds as we grew. We are now experiencing ever increasing growing pains due to the large number of websites and projects we represent. So we have just installed donation buttons on our websites and ask that you consider this when you visit them. Nothing is too small. We thank you for all your support and your considerations … (TLB)
••••
Comment Policy: As a privately owned web site, we reserve the right to remove comments that contain spam, advertising, vulgarity, threats of violence, racism, or personal/abusive attacks on other users. This also applies to trolling, the use of more than one alias, or just intentional mischief. Enforcement of this policy is at the discretion of this websites administrators. Repeat offenders may be blocked or permanently banned without prior warning.
••••
Disclaimer: TLB websites contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of “fair use” in an effort to advance a better understanding of political, health, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than “fair use” you must request permission from the copyright owner.
••••
Disclaimer: The information and opinions shared are for informational purposes only including, but not limited to, text, graphics, images and other material are not intended as medical advice or instruction. Nothing mentioned is intended to be a substitute for professional medical advice, diagnosis or treatment.
Leave a Reply