I wanted to point to a post by my friends over at Return about Central Bank Digital Currencies, also known as CBDCs. In case you haven’t heard of them, they’re a hot topic among high-level government officials. A few countries have implemented them—most notably China—and the majority of countries are considering them.
A CBDC is essentially akin a cryptocurrency like Bitcoin, except controlled by a country’s central bank. The idea is that it would coexist with cash money, and may eventually replace it entirely. The key question is: why would a central bank want this?
Neal Kashkari, President of the Federal Reserve Bank of Minneapolis, has a great rant asking what the point is.
I was hoping to find an answer that wasn’t straight out of a conspiracy theory, but I came away pretty much empty-handed. There are a few marginal benefits, but the chief reason extolled by many experts is total control over the money supply.
A CBDC would likely be programmable, which means that the central bank could decide how you spend it and even whether you get to keep it.
The full article is fascinating and worth a read. It’s very well sourced:
@bowtiedscholar has done great work exploring this topic in his substack.
Probably the definitive source tbh. We’ll worth exploring