🇬🇧9🔻CBDC and Digital Rights: Better Think About It Sooner Than Later

The consequences that the Introduction of Central Bank Digital Currency, Digital State Currencies, May Have For Individual Freedoms and a Possible Preventive Scenario

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The Exposure Dollar, to remember the creative no-payed labour.

Assumptions

  • a CBDC by its digital nature:
  • no project currently in place, whatever the current phase of development, provides for the disappearance of cash, then its replacement in its entirety with CBDC;

Problem

On the one hand CBDCs are, in general, an excellent innovation. The advantages of adoption are different, in this blog it has been discussed several times: financial inclusion without the yoke of intermediation costs and profitability evaluations of intermediaries, direct transmission of monetary policy, multidimensional programmability, i.e. temporary validity and finalization of use and, last but not least among the benefits, the possibility of automating the system payment/consideration through smart-contract, with all that this implies in terms of transaction costs and system integration.

  • the centralization or the decentralization (not DLT or DLT with different degrees of opening) of the system of management and distribution: it is an aspect that interests marginally, as we will see, the privacy problematic and connected.
  • to be part of the system, a desirable vision from the point of view of monetary policy, of the creation/destruction process: it is a system that, compared to the previous one, would have a greater impact of fine-tuning transmissive character. The mixed hypothesis, for which the final user can choose between a direct wallet with the issuing institution and/or one with an intermediary, does not change the scenario.
  • the second, a short while ago it was said that, within limits, the choice between the use of cash and its current digital representation is free; it is equally true that the current trend, on a global level, sees the level of this limit progressively lowering towards the ‘almost obligation’ use of digital money for payments between private, corporate and public components. Regardless of the reasons that lead governments towards this direction, the pervasiveness component of state digital control towards individuals is increasing: there is reason to believe that the advent of CBDCs not only confirms the trend, lowering further the limit of obligations, but makes it even more pregnant, putting a digital eye in the pockets of companies and citizens;
  • the third, as we have been forced to learn as the digital transformation in the last 50 years has run its course, on the one hand there are the norms and on the other the factual reality. It has been characterized, with regard to the confidentiality of personal data and individual digital rights, by abuses, including state abuses, which have their origin in finalized regulations of different kinds (for example, national security or tax evasion) and have had their own path for completely different and illicit purposes. Cash, within the world of money and by its nature, is one of the few things that cannot be affected by this type of abuse. Being, in this perspective, the end user the weak part of a CBDC system, what guarantees does he have, beyond the norm, of who/when/why he can (he is not authorized to do, but he can do) see what?
  • finally the programmability. It is an exceptional tool because combined with smart-contracts it can give rise to specific multidimensional and fine-tuning interventions otherwise not possible: consequently it is a totally new aspect. If it is true that even with cash, and with its digital representation, these interventions are the usual, their realization can be foreseen effectively upstream of the online deployment but, the actual efficiency, must necessarily include a more or less stringent control phase downstream of the disbursements. With CBDC efficiency is maximized because the need for control disappears: either you respect the terms that gave rise to the ‘issuance’ or you can not (get and / or) spend the money paid out. We have written ‘issuance’ in general, instead of ‘issuance connected to the intervention’ not by chance: in a world where norm and factual reality are on two separate levels nothing forbids to block accounts at discretion, and the end user is always the weaker party.

Solution

The treatment of individual rights, digital or not, is in the different CBDC designs, for now a series of declarations of intent. Focus, as right, on the cybersec aspects but only good intentions of trust placed in institutions regarding digital rights.

‘Users’ trust in the privacy model of the underlying digital euro system could be reinforced through auditing by independent third parties.’

The solution must be based on ‘transparency’, which becomes not the key-word but the magic-word:

  • transparency in the ledger: it must be given the ability to everyone, in the possibilities not only allowed but also in those not prevented by legislation, to verify who/how/when he has put his eyes on his pockets;
  • non-systemic third parties must be able to perform due-diligence on systemic operation for two reasons:

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alessandro rossi🧟‍♂️💭

Written by

Innovation Intelligence Analyst | Meditator Zombie | Middle Age Hikikomori | Digital Borderline | Has A Black Hole Under The Pillow | A Bad Product Of🦁Venice💜

FIN WEB3.0

News e approfondimenti (per tutti) su come CBDC, STABLECOIN e WEB 3.0 APP stanno cambiando il mondo-News and insights (for dummies) on how CBDCs, STABLECOINs and WEB 3.0 APPs are changing the world

alessandro rossi🧟‍♂️💭

Written by

Innovation Intelligence Analyst | Meditator Zombie | Middle Age Hikikomori | Digital Borderline | Has A Black Hole Under The Pillow | A Bad Product Of🦁Venice💜

FIN WEB3.0

News e approfondimenti (per tutti) su come CBDC, STABLECOIN e WEB 3.0 APP stanno cambiando il mondo-News and insights (for dummies) on how CBDCs, STABLECOINs and WEB 3.0 APPs are changing the world

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