A Step Towards Cashless Society or Surveillance State?

On June 25, the European Central Bank published an update on the two-year preparation phase for the central bank digital currency (CBD) euro, which ends in October 2025.

The central bank said privacy and data protection were its top priorities, but there were a number of disturbing features of the currency that could lead to the exact opposite.

On June 26, cryptocurrency entrepreneur and investor Daniel Patten highlighted some of them.

JUST IN: The European Central Bank announces its first progress report on a digital euro

Features:
– Easier to monitor you
– It’s easier to let go.
– Easier to freeze your account
– Limits on the amount you are allowed to keep in your account.https://t.co/ZBG6Zoi9oG pic.twitter.com/D2EbxhuNzu

— Daniel Batten (@DSBatten) June 26, 2024

Supervision of central banks

Central bank digital currency (CBDC) is essentially programmable money on a blockchain governed by smart contracts. This gives the bank the ability to control how much currency people can hold.

“In order to maintain a flexible financial environment, the European Central Bank will limit the amount of digital euros that people can hold in their accounts.”

The end game is to eliminate cash and have all financial transactions take place online, which can be monitored and tracked. European Central Bank advertiser These limits are not intended to completely prevent the digital euro from being a store of value, “but rather to mitigate its use in this capacity.”

He added that this preserves the role of banks in ensuring the efficient provision of credit to the economy. Banks will also be able to monitor people more easily, “deplatform” them if they choose, and freeze their accounts, Patten noted. Earlier this year, he said the European Central Bank was among a number of banks working together to undermine financial freedom and cryptocurrencies.

The central bank digital currency also features an “offline functionality” that would provide users with a level of privacy similar to cash, allowing for offline payments using pre-funded accounts, according to the bank.

Observers pointed out It would still need to use the central bank’s database to function, thus eliminating any privacy the bank claims to provide. However, a decision on whether to issue an ECB digital currency will only be made once the EU legislative process is complete and the preparation phase is complete.

When the preparation phase began in October 2023, the fintech entrepreneur was Kim Dotcom to caution On the use of the digital euro, he said: “It is a financial monitoring and control tool. First the digital euro and then the digital identity and social scores. If you do or say anything they don’t like, your money will be blocked.”

Increase the number of pilots in the CBDC

Europe, along with many other countries, is actively aiming to phase out cash and move to a central bank-controlled digital currency.

According to the Atlantic CouncilOnly three countries have deployed central bank digital currencies – Nigeria, Bahamas, and Jamaica.

There are 36 CBDC pilot projects underway, including Europe, China, Russia, Brazil, India, Japan, South Africa and Australia.