In recent years, several countries are increasingly interested in central bank digital currencies (CBDCs). And there is reason when you know that the authorities want to keep the state monopoly on minting the currency. However, this option is not allowed with cryptocurrencies. Thus, CBDCs have become almost indispensable for the authorities. But what are the risks of these currencies and which countries plan to put them into circulation?
Countries wishing to adopt CBDCs
In the last few years, there has been a race between states to launch CBDCs. If the race is mainly concentrated between countries in Europe and America, Africa will not remain on the sidelines. For example, since October 2021, Nigeria launched its own central bank digital currency. Other countries on the continent are preparing to follow suit.
Meanwhile, a few developed countries are also in the midst of a CBDC launch strategy. Here is a map showing these countries.
While it is true that several states are showing a real desire to make CBDCs indispensable in their financial system, it should be noted that some projects still struggling to leave. In China, for example, despite an almost universal adoption of digital currency by the population, the digital yuan is struggling to find its feet. To remedy this, according to some analysts, China could decide to do so reduce the amount of physical yuan to encourage people to use the digital yuan.
The possible effects of CBDCs
It is true that CBDCs are supposed to provide some freedom to their users. That said, everything is not without risk. In the case of central bank digital currencies, experts believe states could have more control over economic life citizens.
Let’s take China as an illustration. Artificial intelligence systems are constantly being used to learn more about the behavior of the population. Social credit in China is a very instructive case in this area. With the arrival of the CBDCs, there is a good chance that the control exercised by the state will be further strengthened.
On the other hand, it must be said that the states’ strengthening of control over the economic life of the population will probably rhyme with a certain subjugation of the latter. Analysts predict that with CBDCs, the populations will be even more under control than they currently are. The authorities will be free to decide which categories of people will be able to receive subsidies or not.
Finally, there is still some ambiguity surrounding some CBDC projects. Although countries such as Canada, Australia, Brazil and India have indicated that they plan to use CBDCs, no one yet knows what modalities will be implemented to make their use possible.
CBDCs are believed to bring happiness to millions of people around the world. At a time when more countries are interested in it and developing new related projects, questions arise about how these digital currencies work. Don’t they just want to increase the power of states? Will they not limit the freedom of individuals in the end? Only time will tell the answers to these questions…
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