The Coming CBDC

The first BitCoin transaction occurred on January 12, 2009 when Satoshi Nakamoto sent 10 bitcoins to a programmer named Hal Finney. We know about this transaction because Bitcoin operates on a public ledger system known as the blockchain. Every transaction made using Bitcoin is recorded on this blockchain, which is transparent and accessible to anyone. This transparency allows anyone to view past transactions, including the very first one.

Anyone can verify this transaction by looking at the historical records stored in the Bitcoin blockchain. The public address associated with Satoshi Nakamoto and Hal Finney's address are known, making it easy to trace this transaction. You can still view the details of the transaction, including the amount and time, by checking Bitcoin blockchain explorers like blockchain.com. This particular transaction is recorded in Block 170 of the blockchain. You can check it yourself.

This transparency is a fundamental feature of Bitcoin, allowing all transactions to be verified publicly. However, while all transactions are verifiable by anyone, the end users can maintain pseudonymity (users' personal identities are not directly tied to their Bitcoin addresses). Now imagine, if you will, that the same blockchain exists recording every transaction like this one, but in addition to the transaction is the user’s name, address, social security number, tax history, mortgage, rent, student loans, and driving history. This is what CBDC is about.

CBDC stands for Central Bank Digital Currency. It's blockchain like Bitcoin, but it's created and controlled by a central bank (like the U.S. Federal Reserve - FED). Most every central bank on the planet is investigating a move to this monetary system including the Federal Reserve of the United States and the European Central Bank. Many are well on their way and will be implementing CBDC in the next couple of years. Some already have like: Jamaica, the Bahamas, Nigeria, and China.

So, what’s different? I mean, we have had digital money transactions for decades. However, in the past only your bank had your personal information famously (or infamously) required in the KYC rules included in the Patriot Act passed into law immediately following the attacks on 9/11 in 2001. These transactions and personal information were only accessible with a warrant. These warrants were supposed to be issued only with a finding of probable cause. Even if this is laughable, it is a procedure that takes time and effort. This will not be the case with CBDC.

With a central clearing house (the FED) for all transactions, every person’s purchases and income can be accessed by authorities instantaneously – without a warrant. Sure, this will make criminal behavior more easily identifiable, but it will also lead to many seizures and headaches of completely innocent people whose transactions appear to be tied to criminal activity even though they are not. Let’s take a look at what CBDC will do to our lived experience.

First, and perhaps scariest, CBDC is money that is completely programmable. This means that funds in your account may be available for purchasing certain things, but not others. Since every dollar (no matter which bank or institution it is in) can be traced directly to you, you will not be able to spend a dime without it being attributed to you. So, if the government decides we are not able to spend more than $200/month on gasoline for our cars, once, you hit that limit, your money will not work at a gas station. This could happen to anything the government decides it does not like: cigarettes, alcohol, gas stoves, etc. Can you smell the totalitarianism here? Can you imagine a scenario when your carbon footprint can be controlled via CBDC? I can.

Of course, those examples are directly related to the use of money for prohibited items; however, CBDC can also be used to control behavior where money isn’t spent at all. If you recall the Canadian truckers’ strike during Covid lockdowns. Many of them had their bank accounts closed. In a similar fashion one person’s money can be “turned off” if they are seen to violate any number of non-financial related activities. Perhaps they posted objectionable “memes” on the internet, engaged in “hate-speech,” or called a person the wrong pro-noun. When Justin Trudeau used the power of the government to close bank accounts, we were able to see how far “democratic” governments can go to control the “acceptable” free speech.

I know many will say, “That can’t happen here. We have the first amendment.” I would counter with just this week, Democratic VP candidate Tim Walz said, “there’s no guarantee to free speech on misinformation or hate speech, and especially around our democracy.” This is obviously incorrect. The first amendment was created precisely to protect speech that would be “hateful” or controversial – not pornography, but rather political speech some might find objectionable. However, how willing would you be to speak up against something that is wrong if you knew your money could go into lockdown? What if the government closed the accounts of people who posted on X or Facebook questioning the vote count at certain precincts? Would you post odd things you saw? Even if you KNEW you were right? How many people would need to be made an example of for others to remain silent? Less than you might imagine. Don’t even think about rising up. Of course, anyone who expressed such hateful rhetoric will also have their accounts restricted for the purchase of bullets.

The central problem with CBDC is its centrality. America has thrived due to competition and a decentralization of power and control. A system of checks and balances that keeps various branches of federal, state, and local governments from becoming too powerful as well as balancing power between the federal, state, and local governments. Not only does the U.S. Supreme Court keep Congress and the Presidency in check, but the state government of Tennessee also keeps the federal government in check, and the county governments keep the state governments in check. There is a beautiful balance between all the institutions at all levels from local to federal. CBDC ruins that.

Money is the root of power. Even local governments need money. Mayer Amschel Rothschild once famously said, "Give me control of a nation's money supply, and I care not who makes its laws." The most powerful people in the world control the world’s money supply. Once that power is centralized, like the FED, the power grows. CBDC puts that power on steroids because the bank or central power controls not only the creation of the supply, but also how it can be used. This means that even governments are limited in their use of funds as well as the collection (taxes) of the funds.

For instance, let’s say a local government is unhappy with the number of migrants the federal government has decided to place in their community. They decide to remove people who are in the area illegally – shipping them to “sanctuary cities.” Not only could the CBDC creator (FED) decide to freeze that community’s accounts, but they could also limit the local community’s ability to collect taxes from their own citizens. The power of the purse becomes dangerously centralized under a programmable and controllable currency like a CBDC.

No longer will local governments be allowed to attract new businesses with tax incentives – the CBDC will say it’s unfair to surrounding areas who will lose businesses. No longer will local banks and credit unions be able to offer incentives like increased savings rates and low-cost loans. This will all become centralized and controlled by the FED (or likely an A.I. operated by the FED).

In conclusion, while a Central Bank Digital Currency (CBDC) might offer benefits like enhanced efficiency and transparency in the financial system, its risks to personal freedom are significant. A CBDC places unprecedented control in the hands of central authorities, with the potential for widespread financial surveillance, restricted access to funds, and manipulation of individual spending behavior. Such a system could erode privacy, limit economic autonomy, and even challenge civil liberties by enabling governments to monitor and influence every transaction. As the world grapples with the rise of digital currencies, it is crucial to ensure that these innovations do not come at the cost of personal freedom and financial independence. Vote for those who oppose the CBDC. Ask where candidates stand.