On today’s show we are talking about central bank digital currency. This is the so-called digital dollar.
Crypto currency started as a way to get transaction costs down to zero to enable micro-transactions online without the clearing costs of a Visa or Mastercard transaction. Now governments want to get into the game. There is a lot of opposition to digital currency from a privacy standpoint and rightly so. On today’s show we are going to examine some of the issues with programmable currency.
There is no question that governments have to respond to crypto currency or risk losing control of the money system. China has already implemented their system and the UK prime minister came out and declared his goal of making the UK the leading clearing house for settlement of digital transactions on a global basis.
The US is now playing catch-up instead of leading the world. With the US dollar as the world reserve currency, the US cannot afford to lose its lead when it comes to monetary matters.
The NY Fed is currently undergoing a trial of a prototype digital currency system and the trial is involving payment processors like Visa and Mastercard along with a few hand picked financial institutions like JP Morgen Chase.
Programmable money could be very powerful. That means extraordinary convenience, but also extraordinary risk.
Digital programmable currency is definitely in our future. As citizens, we could experience this as a futuristic dream, or a dystopian nightmare. Now is the time to start lobbying politicians for a privacy bill of rights surrounding financial transactions. Without those protections in place, governments the world over will use digital currency as a way to monitor compliance with preferred behaviours and ultimately to engineer society, culture, and politics.
Host: Victor Menasce