There's a pretty big difference between the introduction of a CBDC (essentially just a government bank account + debit card) and the deprecation of cash such that the CBDC is the ONLY way you can transact.
And it's not like these totalitarian measures couldn't be implemented already by legislating banks into complying with them, assuming we get rid of cash somehow. There's no difference between "FedWallet has declined your transaction" and "Citigroup has declined your transaction (in compliance with US law)." The article spends a lot of time pretending banks don't exist: "[T]here would be no more tax evasion, either, since we have a complete record of every transaction made by everyone" -- banks already keep track of all the transactions that take place.
A CBDC alone is neither necessary nor sufficient for implementing the kinds of restrictions the author of this article is worried about. Meanwhile, it actually does have a shot at providing financial services to people with bad credit or in precarious situations. So the article strikes me as kind of hysterical.
> There's no difference between "FedWallet has declined your transaction" and "Citigroup has declined your transaction (in compliance with US law)."
There is a big difference. If FedWallet declines your transaction, you could sue under any of a number of fundamental constitutional rights that have been violated.
If Citigroup decline your transaction, you have fewer recourses as they can hide behind being a private bussiness. If government regulations require or encourage Citigroup to decline your transactions, you still have fewer recoures, as the government can hide Citigroup.
If the government makes an implicit threat to private corporations, like "deal with X yourself, or we will pass regulations to force you to", you have even less recourse.
In effect, the government can significantly weaken judicial oversight by outsourcing policy to private corporations.
This becomes less relevent in a system where judicial oversight has eroded. But, as you say, once you are at that point, nothing is stopping the government anyway.
Banks only keep track of transactions they are involved in. Cash transactions are peer to peer, private, and anonymous.
The US government has been effectively phasing out cash through inflation since 1969, as they haven't issued any notes larger than $100 since then. You need roughly 780 2022 dollars to equal 100 1969 dollars. Even a $500 note does not get us back to parity on buying power.
1. What benefit can a government bank card can possibly provide, as opposed to private banking in a country with a modern banking system?
2. No, you cannot implement the draconian measures via legislative push on domestic banks, unless you are willing to cut off ALL foreign banks and ALL foreign business vistors and ALL tourists, and cut off ALL foreign payment systems.
Government CBDC is superfluous in a country with modern banking. It's only intention is to control you, it provides no other benefit. Simply because they aren't phasing out cash at the same time as introducing the CBDC, to make the connection obvious to you personally does not mean they cannot phase out cash as the next step. In fact, cash has been essentially phased out for all practical purposes, it's already been stigmatized to such a point that even legally earned cash is confiscated routinely in legally-sanctioned robberies, aka "civil forfeiture". Some stores even have signs "we don't take cash". It's history.
What more do you want? Government officials telling you under oath on prime time TV daily at 8pm every day of the week, in case you forget, "yes, we are doing this to control you more, and specifically, personally you, yes you - bccdee"
A government bank could presumably provide financial services such as low-fee bank accounts and loans to people with bad credit scores. I dunno, I'm not really well-informed about the advantages. But the criticisms given in the article are pretty bad.
> unless you are willing to cut off ALL foreign banks
Foreign banks are still subject to financial legislation. I can't just transmit my money into and out of a Spanish bank account in order to launder it. If foreign banks didn't comply with US law, they'd get in legal trouble and have assets seized, same as always.
> does not mean they cannot phase out cash as the next step
Weird argument. If your problem is the phasing out of cash, criticize that. Except you can't, because nobody has proposed it and nobody wants to do it.
Besides, unless you agree that banks can be regulated as easily as a CBDC can, then you have nothing to worry about unless all private banks are also closed, which will never happen in our society.
You have no substantiative rights without freedom to transact, and that is why cash is so important.
CBDC is just another authoritarian intrusion on freedoms, and anyone who supports that is complicit in destruction of fundamental, inalienable rights. If you just want to control others - then you could just say so, it's ok to be an authoritarian.
>A government bank could presumably provide financial services such as low-fee bank accounts and loans to people with bad credit scores.
Several countries already do that with a mandate for banks to bank everyone. The US banking system, including its regulation, is actually a decrepit legacy mothball of ancient cruft, significantly behind the rest of the world. It's just buoyed by the USD reserve status, and riding it into the ground.
>I can't just transmit my money into and out of a Spanish bank account in order to launder it.
Happens all the time. How do you think this happens, people move suitcases of cash? Banks launder money and get caught all the time, fined, and then immediately go back to laundering again.
>If foreign banks didn't comply with US law, they'd get in legal trouble and have assets seized, same as always.
like laundering money for the cartels, and getting away with a slap on the wrist, and then keep on doing it again, fined again for 10% of profits, launder again? This sort of legal trouble? or like single purpose banks in China, created with literally the singular purpose of routing around the US sanctions on Iran, that needed years of diplomatic pressure to close (and then re-open under a different name)?
The US isn't want it used to be. In the recent UA-RU situations, even some NATO countries refused to implement the US sanctions. Some Asian "allies" also refused outright, and some even went as far as to openly become a conduit for circumventing sanctions on Russia? the US a fading empire on decline that no longer has the weight it used to.
>Weird argument. If your problem is the phasing out of cash, criticize that. Except you can't, because nobody has proposed it and nobody wants to do it.
Why is the argument weird?
Limiting cash usage has been a de-facto official policy around the entire world for a couple of decades now, and intensified quite a bit recently:
1. Discussions in EU and UK on a total ban of cash so that negative rates can be implemented."Nobody proposed it"
2. SG, UK, EU, CA, JP phased out large denomination banknotes over last 2-3 decades. "Nobody wants to do it"
3. Many EU countries BAN payments in cash for transactions above trifling amounts, like 1000 EUR. "Nobody wants to do it"
4. US discourages cash usage via punitive regulations that have no other real objective than minimizing it's usage, I guess terrorists buy sandwiches with $20 bills, so we now have to watch out very carefully for such abhorrent acts of terror. Or switch to a card-only system, your choice. Such freedom, amazing, I already feel free just typing this. Oops, card declined, whats with your silly rights and all.
In case you need more than actual bans to believe cash crackdown isn't "nobody wants to do it, nobody has proposed it", what would you need, a personal call from Biden? Would the lowly Harvard Kennedy School of Government suffice? https://www.hks.harvard.edu/sites/default/files/centers/mrcb...
CBDC is just North Korea, but for the naive in the West.
>> I can't just transmit my money into and out of a Spanish bank account in order to launder it.
> Happens all the time. How do you think this happens
No it doesn't? I'm sorry, are you really saying that you believe that people commonly launder money by simply transferring it abroad and back? No, it gets laundered through businesses where transactions can be falsified, or through dealings in loosely-regulated assets like art. You have no idea what you're talking about!
> Why is the argument weird?
Because it's a non-sequitur. "Simply because cash isn't being phased out as part of a CBDC doesn't mean it couldn't be phased out later." These are unrelated policies. There's no connection here. Just because cash isn't being phased out as part of municipal road maintenance doesn't mean it couldn't be phased out later either. This is not a valid argument.
As far as your enumerated arguments:
(1) Discussions by whom? I haven't heard any serious proposals with any substantial support. Just idle speculation from bloggers.
(2) Phasing out large banknotes is not the same as banning cash. You can just use multiple smaller notes.
(3) Large cash transactions already have to be reported for tax purchases. I don't think it makes sense to ban them, but it's not as if the flow of large amounts of money hasn't always been regulated. That said, which countries exactly ban 1000 Euro cash purchases? Just because some tiny Slavic country is doing it, doesn't mean it's realistically going to happen in the rest of the world.
(4) Exactly who is going to stop you from buying a sandwich with a $20 bill? This is hysteria.
(5) Some random UK think tank proposing that large cash purchases be restricted isn't the same as a proposal that cash be banned, and think tanks propose stupid ideas all the time.
Then again, I did say "nobody wants to ban cash" — maybe I should rephrase my argument less hyperbolically: There is no substantial support for the abolition of cash in the United States. Cash is not going anywhere.
> CBDC is just North Korea, but for the naive in the West.
Again, what does a CBDC have to do with cash abolition? Nothing. They're independent proposals. Besides, a CBDC can't do anything a bank can't already do. CBDCs are just a boogeyman for you to fearmonger about.
> There's a pretty big difference between the introduction of a CBDC (essentially just a government bank account + debit card) and the deprecation of cash such that the CBDC is the ONLY way you can transact.
It seems perfectly obvious to me that the main intent of a CBDC is to deprecate cash. This allows infinite stimulus through arbitrarily negative interest rates, which could prevent the stock and real estate markets from ever crashing.
Cash is finite. Just stop printing it. And tell the populace they have until XXX to convert their cash to fedcoin. After that date, financial institutions will no longer accept it. India and lots of countries do this when they want to introduce anew currency (devaluing)
> banks already keep track of all the transactions that take place.
Not cash transactions. And they don’t do things like calculate your reputation score based on who you are transacting with (casinos? Liquor stores? Pot stores? Stripper clubs?)
And it's not like these totalitarian measures couldn't be implemented already by legislating banks into complying with them, assuming we get rid of cash somehow. There's no difference between "FedWallet has declined your transaction" and "Citigroup has declined your transaction (in compliance with US law)." The article spends a lot of time pretending banks don't exist: "[T]here would be no more tax evasion, either, since we have a complete record of every transaction made by everyone" -- banks already keep track of all the transactions that take place.
A CBDC alone is neither necessary nor sufficient for implementing the kinds of restrictions the author of this article is worried about. Meanwhile, it actually does have a shot at providing financial services to people with bad credit or in precarious situations. So the article strikes me as kind of hysterical.