Financial education should be taught in schools so that from a young age, people can learn about the concept of money, how it is created, its intrinsic value, and who controls it. Unfortunately, in our current education system, we are taught subjects like frogs and mathematical calculations that may not be practical for our adult lives.
Many people, including adults, are unaware that the money they have in the bank does not belong to them. It actually belongs to the banks, and individuals may or may not have full access to it. While we may have access to the cash in our bank accounts in most cases, the reality is that the money is not truly ours and might only exist due to fractional reserve banking.
However, the concept of money as we know it may soon become obsolete. Although I would like to dismiss the conspiracy theories surrounding Central Bank Digital Currencies (CBDCs) as mere speculation, there is a real possibility that they could become a reality. China is at the forefront of developing CBDCs, and it's important to note that China is not a typical democratic example to follow.
So, what exactly are CBDCs and why are they referred to as programmable money? CBDCs are digital currencies issued and regulated by central banks, but what sets them apart is their programmable features. These features allow central banks to implement specific rules and conditions for the usage of CBDCs. Essentially, CBDCs can have predefined functionalities and policies enforced through the digital currency itself.
The programmability of CBDCs opens up various possibilities. For instance, CBDCs may have an expiration date, giving them a limited lifespan, possibly justified as a measure to combat inflation. This means that individuals would need to spend the digital cash within a specific timeframe and wouldn't be able to save it for the long term.
Furthermore, spending with CBDCs could be conditioned and restricted. Central banks might impose rules that limit the usage of CBDCs to certain goods, services, or jurisdictions, potentially based on an individual's social credit score. It's worth considering these possibilities.
Does this mean that your spending habits with CBDCs won't be monitored? Don't be naive. This is precisely why there is a push to eliminate physical cash that has been in use for centuries. However, we already have cryptocurrencies, such as Bitcoin, which operate differently from CBDCs and offer a decentralized alternative.
About a year and a half ago, El Salvador made Bitcoin legal tender, although it seemed they were pressured to do so. El Salvador has a significant unbanked population, meaning many people lack access to traditional financial services. By adopting Bitcoin as an alternative currency, they provided an opportunity for individuals to become part of the banking system through Bitcoin.
The implications of El Salvador's adoption of Bitcoin go beyond remittances and banking the unbanked, but that's a topic for another discussion. It serves as an example of how a country can leverage Bitcoin and other cryptocurrencies as alternatives to traditional cash.
Now, when the average person finds themselves working hard for money with an expiration date, restricted usage, and complete traceability, it's natural to question whether they will turn their attention towards cryptocurrencies. This shift could potentially capture the interest of billions of people, including the average Joes.
What do you think?
Thanks for your attention,
Adrian
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We are lucky we have decentralized cryptocurrencies to as a alternative of CBDC or other centralized control systems
Yep. Otherwise we would be fucked.
I never heard about expiration dates. That's a twist
You heard it first.