Blockchain leaders should unequivocally reject central bank digital currencies (CBDCs) due to the extensive control they grant governments over currency. Unfortunately, many in the blockchain space, including major players like Consensys, Ripple, and Stellar, are not taking a firm stance against CBDCs, despite their contradictory promotion of decentralised technologies.
CBDCs are state-created digital currencies controlled through private networks, allowing central banks to monitor, edit, and even restrict transactions. By 2030, CBDCs are projected to reach $5 trillion in circulation globally, posing significant risks to privacy, democracy, and potentially empowering authoritarianism.
Consensys, known for MetaMask and Infura, is partnering with Visa to facilitate CBDC infrastructure, and Ripple and Stellar have allowed their blockchains to be used for CBDC development. Ripple introduced a CBDC platform on a private ledger, while Stellar advocates for CBDCs on its public blockchain with enhanced centralised governance features.
Blockchain leaders should leverage their influence to resist CBDCs, highlighting their threats to financial autonomy. Despite gaining recognition in high-level forums like the IMF, the embrace of CBDCs undermines the foundational principles of blockchain, such as decentralisation and immutability.
Governments historically misuse financial power, exemplified by Canada’s freezing of bank accounts in 2022 and FDR’s gold confiscation in 1933. Even with consumer protections, governments will retain substantial control over CBDCs, risking further authoritarian measures.
Cryptocurrencies already provide fast, low-fee transactions without the need for CBDCs. With existing KYC measures, governments can address money laundering and tax income in the crypto sphere.
Blockchain leaders must reject CBDCs to avoid descending into an authoritarian financial norm. They should actively support decentralised alternatives and vocally oppose CBDCs to empower others to do the same, especially as the industry draws in millions of new investors. Let’s use this momentum to advocate that CBDCs are not the only path forward.