A government that is broke will naturally behave like a dictator.

A government that is bankrupt will naturally behave like a dictator.

Digital passports and coins, are you excited? Probably not. When the EU organizes a ‘have your say’, literally every one of the thousands of submitted responses is negative, one hundred percent. It doesn’t serve the citizen either; in Nigeria, for example, CBDC has completely failed. The government and the central bank have even reduced the issuance of cash (that tension does exist), and it did not help. Only less than one percent of the people there use the national digital currency. In the EU, it will be no different; at some point in or shortly after 2027, CBDC in the form of a digital euro will see the light of day here.

Why continue then? Digital currencies help central banks during times of significant government deficits. CBDC allows for negative interest rates. This way, the central bank can stimulate the economy even when interest rates are at or just below zero. It is easy to measure: since the credit crisis, the real interest rate has been consistently negative, meaning that the policy rate is always below inflation. This is not being addressed, but the ECB accepts it. People want to flee to interest-free alternatives, but that is no longer an option. Cash must disappear, but it doesn't stop there. If central banks see CBDC as a stimulus due to negative interest, then all safe investments with no interest must disappear; literally, every escape route will need to be addressed. Opponents of cash will point to the possibilities of money laundering, but this discussion goes further. StableCoin can also be set up to be interest-free, and that will also need to be banned soon.

Governments and central banks have no other choice. Our aging economies are burdened with high public debt. France is even on the brink of a credit crisis. Interest rates must be lowered further to keep that debt manageable. Negative interest rates are coming back into play, and it will be inevitable to digitalize money, even if citizens do not want it. Governments and central banks then become slightly dictatorial; acting against the will of the citizens, because they have no other option. Thus, failing governments naturally become anti-democratic. You prefer to use a technology that is surrounded by controversy rather than not, because there is a monetary urgency. Is that a good reason to avoid certain ethical discussions then?

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I talked about it with Tom van Lamoen, the list leader of the LP - a party of which I am personally a member, for the reasonable amount of twenty euros a year. Shouldn't a journalist be politically neutral? Maybe so, but nowadays, when you see the scale at which D66 and PvdA are being promoted in friendly national media, then this one little chat with my bearded friend and fellow classical liberal should be fine too. Or not? If it is not, please leave a motivated comment and I will take it into account.

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CBDC is an important topic in my latest book. Democracy in Peril buy it here, there is an e-book (digital, very convenient) and a paper book. Would you like to make my digging possible? Go to BackMe, or you can buy my other book, The Euro Gospel: You can also express your appreciation for this article via the button below. Or just not.