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CBDCs are coins for slavery, Cryptos are coins for freedom

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Money supply has grown so much, that inflation is off the charts

Individuals and institutions took a pile of debt all over the years when the interest rates were too low. that means raising interest rates too high would make these individuals unable to pay back their debt. Not only individuals, the government as well took a record level of debt in such a way we start to see signs of default in some countries.

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From the perspective of central banks, CBDCs offer a solution because, in CBDC, it would be possible for the central bank to easily destroy money as well as issue it and that’s just one of many options a CBDC would have.

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Retail CBDC, Wholesale CBDC

There are two kinds of CDBCs, Retail CBDC relevant to regular people and Wholesale CBDC which will be used by selected individuals and institutions.

When you read CBDC, it means Retail CBDC and not Wholesale CBDC. The wholesale CBDC is designed for people in power, the Retail will be used by anyone else.

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In addition of create and destroy money, CBDCs will make it possible for central banks to freeze CBDCs holding, set limits on CBDCs holding, set expiry dates for CBDCs holding, set location limits for where CBDCs could be spent, set time limits for when CBDCs could be spent, set a limit on how much CBDCs can be spent, Decide what can and can’t be purchased with CBDCs, Add a tax to every CBDC transaction, automatically flag or block a suspicious CBDC transaction, Customize CBDC parameters for specific people, Implement negative interest rates by gradually deleting unspent CBDCs holding over time. (No saving allowed).

These are all features that the Bank of Canada, Bank of Japan, U.S. Federal Reserve Bank, Reserve Bank of Australia, and European Central Bank discussed openly recently.

Thinking about this much control in the hands of financial institutions would make any alternative such as cryptocurrencies, a huge threat to government and financial institutions. And it’s safe to say that they would do anything on hand to maintain control of the financial system. This is why some financial institutions such as the IMF have outright recommended that countries must use CBDCs as a tool to fight the adoption of cryptocurrency to maintain said control.

Custody Of CBDCs vs Crypto

To make it simple, custody is just a fancy word for how your money or assets are held.

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With cryptocurrencies, you have the option of self-custody meaning that you can keep your coins or tokens in a digital wallet that is entirely controlled by you.

Using a hard wallet, personal information is not required to create such a wallet, which means transactions would remain pseudonymous by default, Yes you got it right, not anonymous but pseudonymous, it’s totally different.

Pseudonymous because in most of the blockchains out there, anyone could see all transactions taking place on them in real time, and with enough analysis, it’s possible to link a pseudonymous cryptocurrency wallet to real-world identities especially when the wallet holder interacts directly or indirectly with a crypto platform that requires KYC such a cryptocurrency exchange.

Actually, this is one of the ways, that blockchain analytics companies could track transactions.

With that being said, unless you are holding your assets in a personal wallet, holding in a crypto exchange platform means that someone is holding your assets under your name. You might think you have control over your crypto with such a setup but in reality, the custodian only lets you make transactions so as long as you abide by their terms and conditions.

If self-custody looks safe heaven for you and if online exchange seems uncomfortable, the concept of CBDCs and self-custody are way far to match. That is because all your CBDCs holding will be kept at central banks.

In terms of privacy, full anonymity with CBDCs is not possible. this is because the central bank needs to be able to track everything in order to impose its control. You would definitely need to complete KYC and the worst part is that the central bank would assign your digital identity a social credit score which will determine what you can or can’t do. The result would be a total absence of privacy with CBDCs, and with no privacy, there will be no financial freedom.

To explicit more the dystopian quality of CBDCs, at the network level, the transactions that don’t belong to you will not be viewable, only the central bank will be able to see what’s going on behind the scenes. Moreover, the technology that powers the CBDCs will be a heck of a closed source, unless that CBDC was issued as a token on a cryptocurrency blockchain, which will be open source since almost all cryptocurrency blockchains are open source.

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