Can CBDC users lose control of their money?

[m2017]

In Brazil, a pilot project of the central bank digital real is being tested.

Source code - https://github.com/bacen/pilotord-kit-onboarding.

The presented architecture of the project, which, presumably, will be amended and changed - https://github.com/bacen/pilotord-kit-onboarding/blob/main/arquitetura.md.

This news would not have been anything particularly remarkable (the news about the testing of CBDC comes from various countries) if Pedro Magalhães had not reverse-engineered the source code of the digital real placed by the central bank of Brazil (Banco Central do Brazil’s digital real).

Here's what was found there:

Tweet about it. Curious options, right?

"Many in the cryptocurrency community have raised concerns that a CBDC has the potential to infringe on their financial freedom and encroach on their privacy." - This wording sounds in the article (from cointelegraph.com). To which, I can say that it is necessary to express not concern, but “sound the alarm”, because after such surprises in the CBDC source code, it will definitely be impossible to talk about any financial freedom and confidentiality.

As usual, all this is served under a plausible pretext: "Fabio Araujo, an economist at the Brazilian central bank, explained that the digital real has the potential to halt bank runs and looks to provide entrepreneurs with a more safe and reliable environment to innovate." (taken from the same source)

What do you think, is CBDC being developed for the benefit of people or will it be directed against them? After this article, the scales, in my opinion, swung even more towards the total regulation of the financial life of people.


Information taken from: "Brazil’s CBDC pilot contains code that can freeze or reduce funds, dev claims".

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[Charles-Tim]

What do you think, is CBDC being developed for the benefit of people or will it be directed against them? After this article, the scales, in my opinion, swung even more towards the total regulation of the financial life of people.

CBDCs have nothing to offer that fiat have not offered. You can send fiat digitally and it is under the control of central banks and the government just like the CBDCs. In function, is there anything added to CBDCs that fiat can not offer? I see nothing new about CBDCs than claiming that it is built using blockchain. In function, digital fiat and CBDCs are the same thing and they totally invade people's privacy.

[EarnOnVictor]

It all still narrows down to the centralization of CBDC, the controller could be evil/good and do whatever they like with your supposed assets. I called it supposed assets because you might think you have them, but once it's not your key, it's not your asset, so you are technically not the owner and can lose rights to it just like a dream. The CBDC arrangement is just like the old ways that Bitcoin came to tackle, that's why no one should mistake a truly decentralized crypto like Bitcoin for something like CBDC which is just like fiat and may not offer anything beyond that.

Many would say CBDC would give room for more transparency and regulation, but have you ever thought if this so-called regulation is fair? This expose is another good one to prove that your CBDC assets are not safe for anyone.

[pawel7777]

CBDCs have nothing to offer that fiat have not offered. You can send fiat digitally and it is under the control of central banks and the government just like the CBDCs. In function, is there anything added to CBDCs that fiat can not offer? I see nothing new about CBDCs than claiming that it is built using blockchain. In function, digital fiat and CBDCs are the same thing and they totally invade people's privacy.

I agree, from the individual person's perspective, CBDC brings nothing new to the table other than potential threats of introducing more restrictions on how/when you can spend your money (i.e. there have been discussions of ideas of introducing "expiry" dates on money, to force people to spend it within a certain time frame).

The only advantage it provides is giving governments more control over the financial systems and the money flows and making all transactions transparent and traceable (further reducing privacy).

[Ucy]

As long as CBDC is Centralized (as the name suggests) or as long as Centralized Financial system is concerned, expect its ideals/principles to be in complete opposite of the ideals of Decentralized currencies like Bitcoin. Besides, Fiat or National Currency like the CBDC would have to be in accordance with existing national laws that guide the modern financial system. Such laws cannot guarantee users privacy or prevent accounts freezing, as long as centralization is concerned. So, users should not expect their fundamental rights not to be violated by Central Bank, governments or others.

[coupable]

What do you think, is CBDC being developed for the benefit of people or will it be directed against them? After this article, the scales, in my opinion, swung even more towards the total regulation of the financial life of people.

CBDCs have nothing to offer that fiat have not offered. You can send fiat digitally and it is under the control of central banks and the government just like the CBDCs. In function, is there anything added to CBDCs that fiat can not offer? I see nothing new about CBDCs than claiming that it is built using blockchain. In function, digital fiat and CBDCs are the same thing and they totally invade people's privacy.

I agree with you that cbdc coins are just a digital version of fiat money like coins were previously replaced with fiat money.
More privacy penetration in parallel with accurate monitoring of all citizens' financial activities. I think this is nothing new for them and people are used to it.
The only point I think is positive is how private banks will deal with these currencies. Governments will have the ability to control and track all activities on the CBDC currency network, and this is certainly not in the interest of banks that have long benefited from creating accounts for their customers with script numbers in exchange for taking their money under the pretext of saving or investing it.

[Rruchi man]

There is no doubt that CBDC is an improvement in the currency we already, it also means that that as it is an improvement and we already know that the government had control over the fiat that already exist, they have have an improved control over CBDC and will have the power to manipulate, seize/freeze, and control the CBDC as they please. Agreeing to use CBDC is giving the government more financial control over you.

It will not CBDC users to loose control of their money easily whenever the governments feels there is a reason to do enforce and show control.

[Casdinyard]

I'm guessing since they are essentially just fiat in digitized/tokenized form the government still would have enough access and responsibility to manage your money in certain occasions. For one, such as what has happened in the past with criminals holding massive amounts of wealth, their money and assets were pooled into the national treasury instead to amp the taxpayer's money and basically promise to fund projects that will better the common person's life. Of course we know where the money goes but it's one of the possibilities wherein the government can seize control of your money, be it fiat or CBDC. I can't really think of any other reason or way a government could take control of your funds and money other than as a result of criminal liability. But for the record, CBDCs aren't absolved of this and just like their paper money counterpart, they can be controlled too.

[ZAINmalik75]

Just to clarify that, the implementation of CBDC in Brazil where is not going to be implemented publically means it's just a test in a specific environment where other people might not use it. But still, answer to your query is yes. CBDC mean centralization and you better know what happens in centralization.

They only wanted to implement finance with blockchain technology so that they could look cool maybe because everyone as you already said started to promote CBDC which is not in favor of crypto. They could stop transactions any time because our transaction will go through them like will be processed by some central entities so that they could figure out any illegal activity and could stop the whole transaction and capture the guy.

[Poker Player]

That CBDCs allow a higher level of control and manipulation to Central Banks is nothing new. Another thing is whether or when these features will be used, and the level of laziness of the people to accept them.

I am quite pessimistic in that sense. I think that CBDCs are going to be accepted and used by a large majority of the population from the start and that abusive uses will be accepted as just punishments against bad citizens without further ado.

The powers that be are not stupid and are not going to implement the abusive measures from the start, they will simply wait until they have a considerable level of adoption and start punishing as they find appropriate.

[passwordnow]

IMHO, these CBDCs are nothing just like the cash that we've got. While the government has control over the supply of it, with CBDCs it's easier for them to really have those accounts have more balance and there's no need for the third-party confirmation which is what we have in the real world through the banks. There are strict protocols that the banks have and that's what is making it for CBDC easier. It just sounds interesting to hear out that there's CBDCs but, I am not optimistic about it unless it touches the Bitcoin market and adds some fuel to its market cap.

[Freddie Boyer]

Central Bank Digital Currency (CBDC) has been a hot topic lately. In my opinion, CBDC can be of great benefit to society. They offer a convenient, safe and efficient digital version of our national currency for transactions. But, there are also disadvantages you know. CBDCs are easy to track, compromising privacy and anonymity. Plus, they are also vulnerable to cyber attacks, and this is primarily the result of increased surveillance and potential loss of privacy. To solve this problem, we need clear regulation, public engagement, and a focus on individual rights and financial stability both in Brazil, and wherever it may apply.

[Latviand]

Anything developed by a corrupt or despot government will always serve those in power no matter how much it appeals to the people so when it comes to CBDC, I think it's safe to say that it's just a glorified fiat that makes it easier for the people ruling over to control your money. Another thing about CBDC is that it's not going to be the cure all solution since there's still fiat function alongside it most likely so while the citizens are unknowingly use those CBDC, the top brass are busy swindling the fiat to fill their pockets.

[Helena Yu]

There are some people think CBDC is good, some people think it's bad, some people think it's a new currency, some people think it's similar to stable coin etc.

Actually in short, you just need to understand if CBDC is same like digital fiat, that's all. It means there's no difference, it's similar like you use your cell phone to pay anything by just scan the QR code or type it manually through mobile banking.

Is people lose control over their money by using CBDC? yes, similar like mobile banking.

[vv181]

Nothing is surprising and unexpected when the CBDC is capable to control user funds. Without a doubt, a digitalization of money, where authorities have the sole governance toward the tool would make the possibility to undermine freedom and privacy/confidentiality, as indirect consequences or when done badly.

This is truly not a distinct case – centralized entities able to control user funds – that is just how it works. The difference would be, right now, the authority has direct control, instead of going around over many banks and such, CBDC cut the middlemen for government and local country usage.

[DrBeer]

CBDC is a hellish mix of government fantasy and blockchain technology. And the result is a creepy chimera.
For example, the Chinese version of CBDC includes mechanisms for marking and blocking individual "coins". This is a new mechanism, or rather a new level, of control of funds by the state. Now there is no need to send a police squad to seize your money or go to banks to block your cards. The blockchain gets the command "coins belonging to THIS MAN" - block! And any transaction using any coin from the marked coins becomes impossible ! I don't think other countries will miss this opportunity !

So the cryptoworld has spawned a terrible monster....

[Fiatless]

Central Bank Digital Currency is nothing but a tool of control and centralization. It was created to compete with cryptocurrencies and discourage people from embracing crypto. This pilot phase in Brazil gives the government the draconian opportunity to freeze, unfreeze, move funds, and increase and reduce people's funds without restriction.

The government of my country introduced its CBDC three years ago and it proved to be a total failure. Bitcoin adoption has even increased in the country because people know the defects of using the CBDC. In some countries, bitcoin helps citizens to overcome inflation and offers unrestricted financial transactions. These CBDCs can only attract citizens that don't care about privacy and the freedom decentralization offers.

[CryptoBuds]

That's why I still prefer fiat and don't support the launch of CBDCs, but it's inevitable that we can't avoid it. CBDC would be a serious invasion of privacy, and it is safe to say that we will lose all control of our assets if CBDC is used to replace fiat money completely.

With fiat we can still stay anonymous and use it however we want, but with CBDC that will completely disappear. The government will know our every action, even the smallest expenditure for daily needs through CBDC. CBDC is the end of our privacy, but fortunately, bitcoin has come at the right time.

[Inwestour]

That's why I still prefer fiat and don't support the launch of CBDCs, but it's inevitable that we can't avoid it. CBDC would be a serious invasion of privacy, and it is safe to say that we will lose all control of our assets if CBDC is used to replace fiat money completely.

With fiat we can still stay anonymous and use it however we want, but with CBDC that will completely disappear. The government will know our every action, even the smallest expenditure for daily needs through CBDC. CBDC is the end of our privacy, but fortunately, bitcoin has come at the right time.

CBDC are not much different from fiat, which is on our bank card, except that we cannot withdraw this money. And this means that almost always this money will be under the control of the bank.

Those who want to use money with their card without dealing with cash can already do it without any problems. But CBDC will be the forced use of digital currencies, as governments plan to completely withdraw cash from circulation.

I do not believe that it is possible to do this in the near future, most likely CBDC will exist for some time in parallel with cash, because all segments of the population will not be able to adapt to the new reality equally quickly.

[pooya87]

This subject never made any sense to me specially with statements like this:

"Many in the cryptocurrency community have raised concerns that a CBDC has the potential to infringe on their financial freedom and encroach on their privacy."- This wording sounds in the article (from cointelegraph.com).

People in the "cryptocurrency community" should know better than other people that CBDC is not offering anything fundamentally different from the fiat that they are already using every day. CBDC is another currency issued by the banks and both controlled and used through the banks which is practically similar to fiat which is also issued and controlled by the banks and almost always used through the banks (except when you use cash but who is these days?).

You already don't have any privacy when you use banks and using CBDC isn't going to change that.