Why the Sovereign States Want Central Bank Digital Currencies (CBDCs)?
Because they don’t want to give their power.
As Mayer Amschel Rothschild said: “Let me issue and control a nation’s money and I care not who writes the laws.” The same could apply to governments. Before we directly mention the reason, we should look at why governments like to control the money supply.
Now Let’s Begin How Money Emerged
Before we had money, barter occurred between goods and services. But, these goods might not satisfy both parties and these were not really standard prices. Consequently, states had created a standard where barter could be easy. So, it was relatively easy to trade goods and services. But it’d change when merchants started to give their coins as a status symbol. When sovereign states realized it was something important, they were quick to monopolize money printing. And it has gone towards our day. Now, we’ll look at how money evolved through time.
From Commodity Money to Fiat Money
When Lydians have found money, they pegged its value to gold. After the founding of money, it was quick to spread all over the world as states realized how practical it was. However, gold coins were bulky and highly susceptible to be stolen. This would lead to banknotes and goldsmiths giving certificates for gold deposits. When the payment is due, gold deposits would give back the gold and they would be paid for storage. Still, goldsmiths realized that these were long-term contracts, so they’d start banking. And that’s how central banking emerged over time. However, the 1970s marked a change that lasts forever: it was the declaration of fiat money. When this was implemented, governments could carelessly print money without worrying about the consequences. As a result, prices soared, and the value of money plunged. And it also became easier to produce and control the money. Now, money became a weapon of mass destruction.
Now Why Governments Are Pushing For CBDCs?
The era of digital currencies allowed governments to track most people. But this was not enough as they strived for more control. Now with CBCSs, they could track anyone’s transactions with every detail recorded on the blockchain. Even more, they could play with the supply as they like and could track people where they are even with their tokens. So, people would have little to no freedom whatsoever and this would make people lose their credit scores instantly if they did something wrong. Finally, governments could punish an individual with CBDCs.
According to you, why sovereign states want central bank digital currencies? Share your thoughts in the comments section below.