Central bank digital currencies (CBDCs) have been hailed as a solution to various financial woes, but beneath the surface, they raise concerns that aren't always brought to the forefront.

Eliminate Anonymity

CBDC requires users to go through identification processes, similar to those imposed by commercial banks.

This means that central banks, and possibly commercial banks, will have constant access to detailed information about who holds the digital currency, how it's spent or transferred, to whom, and for what purpose.

This data will be stored on a central digital ledger operated by the central banks, raising concerns about privacy and government intrusion into personal financial matters.

Controlled Transactions

The programmability of CBDCs fundamentally changes our relationship with money.

Unlike physical cash, where we have full discretion over its use, CBDCs will always be held in our name at the central bank.

This means that the central bank acts as an intermediary between us and our funds, and if it refuses to facilitate a transaction, we won't be able to use our money.

CBDCs could also provide a convenient tool for governments to stifle dissent.

They could easily cut off funds to individuals or groups deemed problematic, effectively "defunding" dissenting voices with a keystroke.

Moreover, CBDCs could be programmed to impose curfews or restrict movement, eroding personal freedoms.

Additionally, they might depreciate over time or be subjected to special taxes and deductions, undermining financial autonomy.

Power Centralisation

The most profound concern, however, is the potential abuse of CBDCs by those in power.

CBDCs could be used to quell opposition, as governments could defund political rallies or gatherings with the push of a button.

Besides, users' data will be stored on a central digital ledger operated by the central banks, raising concerns about privacy and government intrusion into personal financial matters.

Such power could be exploited by any government, present or future.