Government backed digital currency may lead in dystopian society

[Cryptions]

As the US government is preparing the "crypto dollar" (regarding the Whitehouse) among other governments (for example regarding rumors about The UK revealing plans for more regulation), this raises serious (although old) questions about privacy and control.

The gov backed digital currency is most likely programmable, meaning it can be altered when the government decides. It will be most likely easy to track, not only transactions but also people using it, and for what they use it. It may become easily politicized (as the current USD), but even more, as it can be easily given, restricted, and taken. In plain words, Central Bank Backed Digital Currency puts enormous power in the hands of bureaucrats.

It can be argued that for example, the crypto dollar backed by the central federal reserve doesn't have anything in common with cryptos such as Bitcoin. However, as governments around the world launch their state-backed cryptos, it's clear that cryptos in general face tightening regulation as states want to take control back. For example, with reference to the blockchain.news article stating that:

The Japanese government is pushing for new legislation that will request cryptocurrency trading platforms operating in the country become governed by the same rules that apply to banks.

I think it's quite possible at least soe states decide not to allow in the long run competing decentralized currencies at all because those may undermine "official cryptos". That may lead to the situation in which cryptos such as Bitcoin and alts will be compared to fake money and creating & using them will be punished heavily.

It seems some of our dream from the beginning start to materialize in the form of wide adoption. However, it seems that the dream may turn into an Orwellian nightmare - which is a reality to some extent for example in certain provinces in China. Add gov controlled crypto to the surveillance machine, and that's it!

The situation is not so far away from China in the US or Russia or even in old European democracies. tech is out there, cameras have been installed, policing budgets get boosted, AI is more and more utilized, data is collected - if not publicly - in secrecy, and so on. The only missing piece is a trackable payment vehicle - which gov issued cryptos make a reality.

[avikz]

Yes that can very well be the case, at least financial matters. Governments are understanding the huge potential of digital currencies because it's cost effective for them and it is easier for them to catch the financial criminals. And to stop any kind of illegal financial activity.

Cash still has certain degrees of anonymity but with digital fiat, everything can be seen and tracked by the government. Tax evasion will become next to impossible.

[Sterbens]

There is no difference with paper money if you mean the Crypto Dollar system. The government just doesn't want funds flowing in and out without scrutiny. Because if this continues, the money laundering rate will increase and cause the printing of banknotes to swell. As a result, like it or not, the government that is being predicted with the Dollar crypto currency program or better known as the CBDC is only an alibi to adapt conventional auditing to blockchain technology. Even though the essence is the same, namely finance wants funds to flow in and out without any monitoring.

[milewilda]

There is no difference with paper money if you mean the Crypto Dollar system. The government just doesn't want funds flowing in and out without scrutiny. Because if this continues, the money laundering rate will increase and cause the printing of banknotes to swell. As a result, like it or not, the government that is being predicted with the Dollar crypto currency program or better known as the CBDC is only an alibi to adapt conventional auditing to blockchain technology. Even though the essence is the same, namely finance wants funds to flow in and out without any monitoring.

Government does really oppose decentralization which means if they would need to jump in with the trend via creating these government issued coins or simply cbdc's then people who do have
experience or have that  solid idea on what crypto is all about would be looking into these cbdc's as an another form of digital fiat or simply just like it.They do really just attached or make out
some other name but the overall essence and functionality would be the same.Everything would be monitored as always which is totally opposite on truly decentralized
coins that we do have today.

[Hydrogen]

Early drafts for CBDCs (central bank issued digital currencies) came with digital funds carrying an expiration date, making it impossible to have long term savings. Competition from 3rd party payment apps, digital currencies and crypto currencies are forcing them to alter their original trajectory, offering more competitive terms to incentivize CBDC mass adoption.

I think central banks may eventually offer CBDC funds which payout annual APY % similar to a bank account. That's one area they're established and can offer FDIC and other forms of insurance to cater to consumer brand name trust. It is also an area where crypto currencies have difficulty competing due to lack of FDIC and similar industry guarantees.

It all depends on who they source to architect their vision for CBDC. They certainly have a large pool of candidates to select from.

[Darker45]

Actually, the state doesn't have to shift to the use of CBDCs in order for them to control its populace. Cash is now being gradually eradicated. Fiat is turning digital with the use of online payment systems and all kinds of cards. Even at this current state, monitoring is already made easy. Cash is the hardest to control among all kinds of fiat payments and it's now slowly erased from the picture.

With Bitcoin, we are somehow assured that whatever policy they will impose against it, Bitcoin won't die. Just years ago, Bitcoin wasn't accepted in all places. It was even described as some sort of an evil money used by evil people. However, one cannot hide the fact that Bitcoin is the better money. So whatever happens, it will always prevail.

[Moneyprism]

digitizing fiat currency as the government does is quite funny in my opinion ... the government digitizes their currency just so that their currency is not less popular than crypto and can "make it easy" for users he said

... they purposely embellish their digital currency with "blockchain technology" to give the impression that this is a secure currency and similar to crypto,,, but this is completely different,, they can track and manage their currency just like fiat currency , so what's the point of having this digital currency??

[bittraffic]

Early drafts for CBDCs (central bank issued digital currencies) came with digital funds carrying an expiration date, making it impossible to have long term savings. Competition from 3rd party payment apps, digital currencies and crypto currencies are forcing them to alter their original trajectory, offering more competitive terms to incentivize CBDC mass adoption.

I think central banks may eventually offer CBDC funds which payout annual APY % similar to a bank account. That's one area they're established and can offer FDIC and other forms of insurance to cater to consumer brand name trust. It is also an area where crypto currencies have difficulty competing due to lack of FDIC and similar industry guarantees.

It all depends on who they source to architect their vision for CBDC. They certainly have a large pool of candidates to select from.

With expiration date, it already feels like you are going to race time to spend it otherwise it will disappear in time. Its programmable so whats going to stop them from completely wiping out your money when you're suddenly involve in a crime or mistaken identity situation?

Why don't they just take over the coinbase USDC or the company that created USDT, its already in the blockchain and widely used already. Its the same thing. They just need to create a layer 1 platform and make it official for the government and add USDT there for less transaction fee.

[someone703]

Yes, just possibly?

While that is an issue that is still being worked on, how to harmonize the media economy with the new economic sectors is another.

I think it is not negative and will have a positive impact on this market. I think that because of this, they are also realizing the potential and its application to life, but the problem will be more obvious in the future when they actually apply it.

[Beerwizzard]

I don't think that FED would somehow decide to make a free currency. They 100% need to remain control over it in order to impose different monetary regulations since it have significant impact on export and there is almost no way to do it with crypto.

I think central banks may eventually offer CBDC funds which payout annual APY % similar to a bank account. That's one area they're established and can offer FDIC and other forms of insurance to cater to consumer brand name trust. It is also an area where crypto currencies have difficulty competing due to lack of FDIC and similar industry guarantees.

This feature doesn't seems like something groundbreaking that should make people switch to CBDC. If it is the best they can do then CBDCs are screwed.

[tygeade]

There is no difference with paper money if you mean the Crypto Dollar system. The government just doesn't want funds flowing in and out without scrutiny. Because if this continues, the money laundering rate will increase and cause the printing of banknotes to swell. As a result, like it or not, the government that is being predicted with the Dollar crypto currency program or better known as the CBDC is only an alibi to adapt conventional auditing to blockchain technology. Even though the essence is the same, namely finance wants funds to flow in and out without any monitoring.

Everything that has an advantage also has a disadvantage. While there are people who simply want to make use of Bitcoin and other truly decentralized cryptocurrencies because they need privacy with their life, there are people who are taking that opportunity to misuse cryptocurrency. There are people who are using it for the wrong purposes, such as scamming and money laundering.

Decentralization may seem like it is bad in some ways, but centralization also has its own cons. And that is why a lot of people are trying to avoid it as much as possible. But, what can we do? Since the good opportunity that has been given to us are being misused by some people?

[wozzek23]

As long as it is coming from the government that is full proof that the government would like to be in total control of the digital currencies. The reason why the government do not like Bitcoin and other truly decentralized cryptocurrencies is because there is no way that they can be able to regulate it or have control over it and also be able to monitor the transactions, where they are coming from and where they are going to.

So, they would like to create their own cryptocurrency or digital currency, which will be issued by the central banks and controlled by the state. That way they will be able to keep record of every transaction that the users are making with the digital currencies, and they will also be able to regulate it easily.

[Smartprofit]

As long as it is coming from the government that is full proof that the government would like to be in total control of the digital currencies. The reason why the government do not like Bitcoin and other truly decentralized cryptocurrencies is because there is no way that they can be able to regulate it or have control over it and also be able to monitor the transactions, where they are coming from and where they are going to.

So, they would like to create their own cryptocurrency or digital currency, which will be issued by the central banks and controlled by the state. That way they will be able to keep record of every transaction that the users are making with the digital currencies, and they will also be able to regulate it easily.

Theoretically, the creation of central bank digital currencies (CBDC), together with a social rating system and Big Data technology, could become the basis of a global digital concentration camp.  In fact, this is a terrible dystopia. 

Can such a dystopia be brought to life? 

China is successfully implementing such a system in their country.  However, the Chinese have a special mentality.  They are very prone to centralization and collectivism. 

Is such a system possible in the USA, Europe, Russia? 

In my opinion, along with trends, there are always anti-trends.  It is anti-trends that prevent the triumph of anti-utopias.  For example, in Russia, technological progress is now stalling due to the disruption of global supply chains.  Therefore, Russia will not create a CBDC and a social rating system. 

It is quite possible that such a system will not be created either in Europe or in the USA (for various reasons). 

A dystopia will not be realized all over the world.  And this is a big opportunity for decentralized Bitcoin.

[stomachgrowls]

As long as it is coming from the government that is full proof that the government would like to be in total control of the digital currencies. The reason why the government do not like Bitcoin and other truly decentralized cryptocurrencies is because there is no way that they can be able to regulate it or have control over it and also be able to monitor the transactions, where they are coming from and where they are going to.

So, they would like to create their own cryptocurrency or digital currency, which will be issued by the central banks and controlled by the state. That way they will be able to keep record of every transaction that the users are making with the digital currencies, and they will also be able to regulate it easily.

It cant really be totally be called as a crypto as this one is centralized as we all know.Government doesnt really like on things that arent able to be controlled which is something not surprising.

They can create all they like or all they want but crypto people wont really be supporting these cbdc's because of totally opposes crypto's decentralization.
It wont lead to dystopian society but somewhat it could lead up on having some options as a citizen on which one you would be using but of course it would neither
be adopted or not into  your place.

[AmoreJaz]

As long as it is coming from the government that is full proof that the government would like to be in total control of the digital currencies. The reason why the government do not like Bitcoin and other truly decentralized cryptocurrencies is because there is no way that they can be able to regulate it or have control over it and also be able to monitor the transactions, where they are coming from and where they are going to.

So, they would like to create their own cryptocurrency or digital currency, which will be issued by the central banks and controlled by the state. That way they will be able to keep record of every transaction that the users are making with the digital currencies, and they will also be able to regulate it easily.

It cant really be totally be called as a crypto as this one is centralized as we all know.Government doesnt really like on things that arent able to be controlled which is something not surprising.

They can create all they like or all they want but crypto people wont really be supporting these cbdc's because of totally opposes crypto's decentralization.
It wont lead to dystopian society but somewhat it could lead up on having some options as a citizen on which one you would be using but of course it would neither
be adopted or not into  your place.

as we have read before, the creation of cbdc's may pave the way for the people to appreciate the actual crypto market. yes, at the start, they would trust the government's cbdc but later on, when they discover bitcoin and other crypto, they will understand the difference of cbdc and these cryptocurrencies. they may also use both depending on the situation. but cbdc may not lead to a dystopian society. it may possibly provide a path for people to appreciate crypto market.

[Strongkored]

The government understands very well that it is difficult to stem crypto as well as its adoption in many areas of life so that the only way is to make crypto fiat  so that it is easier to make decentralized crypto more regulated and goal to make citizen use crypto fiat successful, community financial activities are more detectable but most people will prefer something official so as not to violate the law rather than maintaining their privacy.

[kryptqnick]

You're right that some countries are already living in a dystopian society, including China, which has been experimenting and partially using a CBDC for a while now. But in the US, it's more subtle because it's a democracy and people value their freedom. Libra couldn't get approval from the Congress over privacy concerns, remember? So a CBDC would probably lead to strong debates as well. Not to mention that people love the dollar there, and I'm not sure if they'll support a digital crypto analogue of it. The US is exploring a CBDC, but such explorations could take years before being implemented, and we don't know what they'll settle on, and what sort of privacy concerns will be relevant. In any case, unless it becomes the only legal tender, and I don't think that's possible, one can always choose not to use a CBDC, even if it exists and becomes widely accepted as a form of payment.