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from
RealClearMarkets
Website
of CBDCs...!
In attempting to do so,
they are ignoring serious concerns about consumer privacy and
heavy-handed government control in the U.S. and abroad.
Yet also around the globe - from the U.S. to Europe to Africa - more and more of the general populace are rejecting CBDCs as they learn what they would entail and experience them in practice.
Unlike paper or a private decentralized digital currency, a CBDC leaves an electronic trail of purchases and sales within a government digital ledger.
Ledgers of
such information are in the hands of governments that in many cases
have a dark history of abuses of civil liberties... Measures of public reaction in the U.S. and elsewhere show that the general public - as well as a growing number their representatives in their governments - are firmly on the side of critics of CBDCs.
Americans are generally skeptical of grand new government initiatives.
Beyond general mistrust of government, Americans seem to specifically distrust the government wielding its powers with a CBDC.
Most people don't see a need for it, with just 16 percent supporting a Federal Reserve-controlled digital currency, according to a recent CATO Institute poll.
Europe is facing skepticism, as well.
Markus Ferber, the economic spokesperson for the center-right European People's Party, put it this way:
Spanning the globe to Africa, an especially instructive lesson in the public's reaction to the issuance of CBDC comes from that continent's most populous country:
Nigeria rolled out its own CBDC, eNaira and, in the fall of 2021 and invalidated all paper banknotes, making the economy one of the first entirely cashless systems in the world.
Nigerians were less than thrilled, as mass protests, boycotts, and utter rejection of the CBDC have ensued.
Even though the Nigerian Central Bank released huge incentives for citizens to adopt eNaira, according to Kunwar Khuldune Shahid of the Daily Dot, only 1.5 percent of the downloaded wallets were used once a week in 2022.
According to Nicholas Anthony from the CATO Institute, the Nigerian government,
No offer has swayed the population to this day.
Nigeria's political climate may be somewhat different from that of the U.S. and Europe, but the reasons for rejection of a CBDC carry some important similarities.
A CBDC in which the government holds the ledger of the purchases and sales made with the electronic currency - whether issued by the Nigerian Central Bank or the U.S. Federal Reserve - would grant the government total surveillance power over individual transactions.
If Nigerians buy and sell anything using eNaira, the digital ledger will show the government their purchases. A CBDC in the U.S. would likely work the same way
Given its poverty in comparison to the U.S. and Europe, the rejection of Nigeria's citizens of a CBDC is a further blow to the dubious argument that issuance of CBDCs would somehow benefit the poor.
Whatever benefits could be derived from the technology of the CBDC, Nigerians are concerned about their financial privacy and skeptical of government overseeing their purchases and sales.
People worldwide agree that,
In the U.S., lawmakers are introducing anti-CBDC legislation that should be a model for the world In the U.S. House of Representatives, Rep.
Alex Mooney (R-WV) introduced the Digital Dollar Prevention Act in June,
While House Majority Whip Tom Emmer (R-MN) earlier introduced a Bill restricting Fed issuance of CBDCs, Mooney's bill takes it further, expressly banning "pilot programs" that could create CBDCs indirectly through public regulatory states and the private sector (which is Nigeria's current currency distribution and maintenance method).
More must be done overall to protect civil liberties and the stability of the American free market from the destructiveness of a CBDC.
We need bipartisan efforts to protect financial privacy and oppose policies that go beyond the wishes of the governed.
As we have seen from the experience of Nigeria and prescient observations of ordinary Americans and Europeans, a central bank issuing a digital currency by the U.S. is unwise and would further erode existing financial freedoms.
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