Edward Snowden: CBDCs are “crypto-fascist currencies” that could “accidentally wipe out” savings

Soon

  • Former whistleblower Edward Snowden responded to an article by Cornell political economist Dr. Eswar Prasad.
  • Dr. Prasad hypothesized a scenario in which the United States government could impose a negative interest rate and withdraw money directly from people’s savings.
  • Snowden followed up his tweet with a blog post detailing his concerns that people could lose their monetary autonomy.

In a scathing tweet yesterday, NSA consultant-turned-whistleblower Edward Snowden said central bank digital currencies (CBDCs) could “coincidentally [annihilate] the savings of every salaried worker” in the country.

Snowden began his attack on the fledgling promise of CBDCs, digital currencies backed by a central bank’s monetary reserves, in response to a New York Times article by guest columnist Dr. Eswar Prasad, professor of trade policy at Cornell University. .

Dr. Prasad highlighted the growing movement toward a cashless economy, a move pointed out by CBDC research and evidence in countries such as porcelain, Sweden, Japan, Britain, as well as the European Central Bank, which this summer warned countries that tech sector could soon overtake governments if they don’t start preparing their own digital currencies.

Snowden highlighted a part of Dr. Prasad’s article in which the scholar theorized that if the US economy was in dire straits and the Federal Reserve had already lowered the interest rate it controlled to zero, “the Fed could [then ] impose a negative interest rate by gradually reducing the electronic balances in everyone’s digital currency accounts.

It’s worth noting that when inflation is too low, negative interest rates can encourage borrowing and spending to encourage rising interest rates. Since having physical cash is inherently expensive (you have to consider a secure storage space), a bank is more likely to lend money to other banks or pay the negative interest rate.

While that could work for commercial banks, Snowden finds Prasad’s article disturbing to regular savers under a new CBDC regime, arguing that the coins would be “a useful political tool” to accidentally wipe out all workers’ savings. wage earners of the country. don’t spend it fast enough.

What is a central bank digital currency? Oh, you know: just a “useful political tool” to accidentally erase the savings of all the salaried workers in the country if they don’t spend them fast enough. https://t.co/TAKQCEDcOX

– Edward Snowden (@Snowden) October 9, 2021

Snowden elaborated on his fears about CBDC in a blog post published a few hours later. He called CBDC “a perversion […] of the founding principles and protocols of the cryptocurrency, a fascist cryptocurrency, an evil twin entered the ledgers the opposite day, expressly designed to deny its users fundamental ownership of their money and install the state in the mediation center of all transaction. »

Snowden began with a condensed history of money, from its humble beginnings as rare pieces of precious metal mined from the bowels of the earth, to its current incarnation, often as digital figures in a banking application.

He then explained the promise of decentralized cryptocurrencies such as Bitcoin and Ethereum, which offer a method of storing and exchanging money without intermediaries, such as banks and financial services, before suggesting that CBDCs threaten the very principles of crypto radically re-centering the monetary system. so that every digital penny is again controlled by a central bank.

Some algorithmic stablecoin will do exactly what Snowden fears: remove the coins from people’s wallets to alter the total supply and value of the coins. difference is that these mechanisms, called overruns, occur autonomously according to parameters established by the community, not by the central banks that Snowden distrusts.

Snowden is not alone in his cynicism toward CBDC. In August, a poll of 2,500 British adults conducted by POLITICO concluded that only 24% of British adults surveyed believe that CBDC would be a net positive for society, and 30% believe it would do more harm than good. About three-quarters of those surveyed were concerned that cyberattacks would undermine a CBDC issued by the Bank of England.

growing enthusiasm around CBDCs shows no signs of abating, but people are clearly concerned that their money will be attacked by cybercriminals or, in the case of Edward Snowden and Dr. Prasad, by their own government’s central bank. .

Read also Cream Finance creates a compensation plan after finding a hacker

Source link

more

Related Posts

© 2024 Cryptocoin Budisma.net