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Lacalle – Central Bank Digital Currencies (CBDCs) pose unnecessary risks

Summarised by Centrist

Central bank digital currencies (CBDCs) are being debated by major central banks, but economist Daniel Lacalle says claims of transmissibility and efficiency just don’t make sense. CBDCs pose major dangers, he argues, because they grant central banks unprecedented surveillance and control over citizens’ financial activities, risking privacy and economic freedom. 

Central banks have never successfully prevented bubbles, high levels of risk-taking, excessive debt, or identified inflationary pressures, he says. For those reasons, he argues that no one should support a proposal that would grant them complete authority and control over the financial and monetary system. 

“The entire privacy system and monetary limit mechanism would be removed,” he says. 

Moreover, they could exacerbate inflationary pressures and government fiscal irresponsibility. 

He contends that CBDCs are unnecessary given existing digital payment options and the potential to undermine trust in fiat currencies. Instead of competing with cryptocurrencies like Bitcoin or China’s digital yuan, central banks should focus on safeguarding currency value and fostering competition. 

Read more over at dlacalle.com

Image: ₡ґǘșϯγ Ɗᶏ Ⱪᶅṏⱳդ

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