In recent years, several countries have been increasingly interested in central bank digital currencies (CBDCs). And there is a reason when you know that the authorities want to maintain the state monopoly in minting the currency. However, this possibility is not allowed with cryptocurrencies. Therefore, CBDCs have become almost indispensable for the authorities. But what are the risks of these currencies and which countries are planning to put them into circulation?
Countries that want to adopt CBDCs
In recent years, a race between states has been initiated for the launch of CBDC. If the race is concentrated mainly between countries of Europe and America, Africa does not remain on the sidelines. For example, from October 2021, Nigeria launched its own central bank digital currency. Other countries on the continent are preparing to follow suit.
Meanwhile, some 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 take off. In China, for example, despite an almost widespread adoption of the digital currency by the population, the digital yuan is struggling to find its feet. To remedy, according to some analysts, China may decide to do so reduce the amount of physical yuan encourage people to use the digital yuan.
The possible effects of CBDCs
It is true that CBDCs should provide some freedom to their users. That said, not everything is risk-free. In the case of central bank digital currencies, experts believe states could have more control over economic life citizens.
Let’s take the case of China as an example. Artificial intelligence systems are constantly being used to learn more behavior of the population. Social credit in China is a very instructive case in this area. With the arrival of CBDCs, there is a good chance that state control will be further strengthened.
On the other hand, it must be said that the strengthening of the control of the economic life of the populations by the states risks rhyming with a certain subjugation of the latter. Analysts predict that with CBDCs, populations will be even more under control than they currently are. The authorities will be free to decide which categories of people will be eligible for subsidies or not.
Finally, there is still some obscurity covering some CBDC projects. Although countries such as Canada, Australia, Brazil and India have indicated that they intend to use CBDCs, no one knows yet 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 several countries are taking an interest in them and developing new related projects, questions arise about how these digital currencies work. Won’t they simply increase the power of states? Won’t they limit the freedom of individuals in the end? Only time will answer these questions …
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