Can we take a moment to talk about the digital bolívar in Venezuela? In early 2021, Nicolas Maduro briefly hinted that a “digital bolívar” would soon be part of an effort to digitize the Venezuelan economy. Many people took this statement to mean a CBDC was on the way. Later that year, the Banco Central de Venezuela seemed to confirm those suspicions when it announced the digital bolívar was indeed on the way along with a currency devaluation. Well… here it is. The “digital” bolívar. image No, this is not a hyperrealistic AI-generated image of what a digital bolívar might look like. It really is a physical banknote. The only thing that's new is the devaluation so that 1,000,000 sovereign bolívars = 1 digital bolívar So, it’s not a CBDC by any means, but there is a side note to this story that unexpectedly captures just how absurd the Venezuelan monetary system has become. The central bank forced shops to post prices as both sovereign bolívars (Bs) and digital bolívars (Bs.D). Yet, there is a third label on prices that can also be seen in Venezuelan shops: REF. In short, this means to reference the dollar. For the fans of statistics, I probably don't need to point it out. However, “REF” is also the error code that Excel will display if a formula is broken. And frankly, this label could not be more fitting. Something is clearly broken if a central bank has launched a non-digital, digital currency denominated at 1/1,000,000th of its previously hyperinflated currency that was already on its second devaluation. As if this story were not enough, there’s also the tale of when Maduro introduced an actual digital currency called the “petro.” However, I'll leave that for another day. If you want to learn more about this story and other CBDC developments around the world, check out the @npub17xvf...c9as CBDC Tracker.
CBDC Tracker
A CBDC is a digital national currency. In the case of the United States, a CBDC would be a digital form of the U.S. dollar whereas, in Nigeria, the...
Efforts to slow or block the creation of a CBDC have received little support among congressional Democrats—even though the risks involved strike at the heart of core progressive values. Indeed, for a movement that has consistently fought against surveillance, discrimination, and the abuse of government power, CBDCs should raise especially sharp concerns. Thank you to @The Progressive Bitcoiner for letting me write a guest post.
The Progressive Bitcoiner
Central Bank Digital Currencies Clash with Progressive Values
Progressives—who have long fought to curb state overreach, surveillance, and discriminatory enforcement—should likewise fight to stop the rise ...
50 pages defending “CBDC privacy” summed up in 2 quotes: “This Article demystifies the exaggerated concern that a [CBDC] would serve as a tool for government surveillance, demonstrating instead that a [CBDC] can offer enhanced privacy protections through the examination of current technical designs.” “Of course, if a government or central bank intends to use a CBDC system for surveillance, they certainly have the capability to design it accordingly.” 🔗: 📄.pdf
Who else should I be following on here?
Today marks the anniversary of President Nixon's 1971 decision to end the gold standard in the United States. I can't help but notice that the same appeals to "protect the dollar" here mirror what politicians now use to say we need a CBDC.
A "cashless economy is the preferred choice for the central bank." I mean... at least they are upfront about it. image https://repositorio.banrep.gov.co/server/api/core/bitstreams/e74bc0c3-e866-4b31-a00d-3eebf8f83f03/content
Trump says banks discriminated against him and then says he thinks the source of the problem was the government itself. He's expected to sign an executive order about debanking this week.
CBDCs and stablecoins are not the same thing. It is correct that neither embodies truly open and free monetary technology, but the distinction is still important because only CBDCs give the government direct access and control over your financial activity by default. I explain at length in my latest article below. View Article →
When protests erupted after the 2020 election of Alexander Lukashenko, the government detained thousands. In 2021, the government raided the offices of media outlets and froze the bank accounts of the Belarusian Association of Journalists. In that same year, Lukashenko gave the central bank “the right to prohibit the sale and purchase of currency or impose a tax on it and confiscate dollars and euros from the accounts of legal entities.” In 2023, news broke that the central bank was building a CBDC. Find my latest with the @npub17xvf...c9as below.
Human Rights Foundation
Tracking CBDCs before they track you
Everyone who uses money needs the digital euro? Wild take from Bloomberg. image To their credit, the authors acknowledge that electronic payments are widely available. image So why? Why do people need a digital euro when they are already served by a wide array of options? And there it is: Control. image The authors do well to be upfront about one risk of CBDCs. Although the only one they mention is the risk that a CBDC could undermine banks and so they propose restrictions on how much people can own. image However, there are many other risks at play with few benefits to justify the cost. https://www.cato.org/visual-feature/risks-of-cbdcs Check out the full piece in Bloomberg below.
Bloomberg.com
Who Needs a Digital Euro? Everyone Who Uses Money
The European Central Bank is rightly working to future-proof government-issued currency.