Central Bank Digital Currency: A Primer

Conclusion

It is hopefully clear from this brief primer what the digital currencies proposed by central banks are. In a word, they are the final evolution of fiat money: money totally under the control of the issuing government. While the language and some of the technology may be inspired by or borrowed from cryptocurrencies, don’t be deceived. Bitcoin is an attempt to preserve wealth by placing it outside the reach of government; CBDCs are intended to frustrate that end. If following Rothbard,4 we interpret history as a struggle between liberty and power, between free society and state dominance, we might say that central bank digital currency is simply the latest weapon in the arsenal of the state in its quest to dominate society completely.

Of course, since the economic doctrines guiding central bankers and governments are nothing but a tissue of fallacies, the consequences of imposed digital currency are likely to be very different from what they expect. But if 2020 has taught us anything, it is that there are no limits to what states will do in pursuit of fallacies that will increase their own power.

1.Ludwig von Mises, Human Action: A Treatise on Economics, scholar’s ed. (Auburn, AL: Ludwig von Mises Institute, 1998), pp. 429–31.

2.Ludwig von Mises, The Theory of Money and Credit, trans. by H. E. Batson (New Haven, CT: Yale University Press, 1953), p. 61.

3.European Central Bank, Report on a Digital Euro (Frankfurt am Main, Germany: European Central Bank, 2020), p. 27, https://www.ecb.europa.eu/euro/html/digitaleuro-report.en.html.

4.Murray N. Rothbard, Conceived in Liberty (Auburn, AL.: Ludwig von Mises Institute, 2011), pp. xv–xvi, https://mises.org/library/conceived-liberty-2.

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