Is the next era of currency about to begin? Are we slowly sliding towards a control society? Maybe, maybe not. In this landscape, a new tool could well enable governments to assert a little more power over the object that has always dictated our world: money. Through Central Bank Digital Currencies (CBDCs) which we’re hearing more and more about, countries could manage to reduce our freedoms even further. State of play behind-the-scenes work and simultaneously across the globe.
MNBCs, currencies spreading around the world
Currency set to change by 2030?
According to a recent reportno fewer than 15 MNBCs could be created by 2030. These currencies, steered by the central banks of each country or region of the world, could find their way into our bank accounts within a few years. But what are they, and what are the dangers?
Although the usefulness of these currencies is not yet fully understood, we have noticed one thing in recent years: a simultaneous effort by countries to develop them. Over 90% of the 86 central banks surveyed in this report are hard at work on them. But why? Let’s find out in this article.
MNBCs, a global momentum
First Brazil, in December 2022, announced it had scheduled a pilot project to introduce its MNBC, the digital real. More recently, we have learned that a full-scale test phase will begin in the country with the participation of a consortium of companies. In particular, the country has secured the support of Mastercard and is aiming for MNBC launch by 2024.
The government of Kazakhstan, for its part, announced a launch of its MNBC between 2023 and 2025. Surprisingly, the country will be relying on Binance’s BNB Chain.
In January 2023, the President of Turkey, Erdogan, announced the success of the first transactions. with the Turkish digital lira.
In February, the Bank of Japan announced that it was initiating a pilot program for its digital currency. This » state cryptocurrency « as they call it, entered the testing phase last spring.
In Singapore, Project Orchid aims to initiate the launch ofa digital, programmable Singapore dollar.
England, an MNBC to limit your savings
In England, the current Prime Minister, Rishi Sunakhad called for in 2021 the creation of a « Britcoin. In other words, the emergence of a digital pound sterling. However, the English would not have » the right We will only be able to sell « 20,000 digital books or e-GBPs. The rest would be kept. in normal book format « . Two conclusions:
- The transition would be a smooth one: the digital book would first rub shoulders with the current book.
- If, at a later stage, the situation were to shift towards the holding of digital-only sterling, governments could quite easily decide how much is allowed in your bank account
« Money exceeding the limit will be »swept away to the customer’s bank account. »
The USA, in the middle of the MNBC debate
Last February, the San Francisco Federal Reserve decided to take a closer look at the hot topic of digital currencies. It posted an advertisement for a « MNBC Engineer. In the USA, however, and particularly among the political class, this MNBC proposed by the authorities was far from being emulated.
Tom EmmerRepublican Congressman from Minnesota, gave a speech last March to express his opposition to the. For him, MNBCs will be just another control tool for the government. For him, these digital currencies will « easily weaponized as a surveillance tool [de masse] « .
Ron DeSantis, Governor of Florida, has also followed this outpouring of disapproval. He describes the e-dollar as « Big Brother’s digital dollar.
» [Une MNBC] gives the government direct access to consumers’ activities. (…) Central bank digital currency is just a way to monitor Americans and control their behavior. »
Ron DeSantis
For him, this Pandora’s box must never be opened.
China, ahead of its time?
In China, on the other hand, the time for hypotheses and planning is over. It’s time for full-scale tests. The digital yuan, or e-yuan, is already up and running, gradually making its way into people’s daily lives. China’s MNBC has already infiltrated the famous payment service WeChat. The e-yuan’s aim is to gradually conquer merchant payments.
At the same time, we learned last April that Chinese civil servants would be gradually receive their salaries in digital yuan (e-CNY).
What’s more, last May, we learned that China’s central bank was shortly planning to connect its e-CNY to foreign banks. And the one at the head of the queue is French. It is BNP Paribas.
More recently, China has also started tests of « super SIM cards to enable contactless payment with their MNBC. A good way to democratize its use, which is still being tested in 17 major cities across the country.
Nigeria, adoption by force
Nigeria’s strategy is to force its population to adopt the e-naira. The government has generated a cash shortage to encourage the population to use e-naira. The population had been snubbing this digital currency since its inception. Nevertheless, Nigeria has imposed the replacement of its old banknotes with new ones. Visit calamitous management of this transition has prompted the population to turn to alternative means of trading: dollars, Bitcoin and… e-naira.
Last June, the governor of the central bank even was arrested for his monetary mismanagement.
In Europe, the e-euro will be called « Cash+ ».
« Cash+ », the digital currency as seen by François Villeroy de Galhau, Governor of the Banque de France
In his speech of June 22, 2023, the head of the Banque de France dwelt on the issues behind the development of the famous European MNBC. He announced that a preparation phase would begin at the end of the year, with a view to commissioning by 2027 or 2028. François Villeroy de Galhau highlights the two main criticisms levelled at MNBCs:
- They would be » a solution in search of a problem «
- They could compete with commercial bank currencies
« To sum up, the e-euro will be a digital banknote or »Cash+ ». It will have the same characteristics as today’s species. »
The director of the Banque de France insists on the guarantee of privacy and the promise of confidentiality of this « Cash+ « . While unveiling this MNBC’s introduction plan:
« It will be the safest asset; thanks to the fact that legal tender will probably be granted to it, it will be accepted everywhere in the euro zone (…) But the Cash+ » will bring significant advantages over banknotes: it will enable everyone to use central bank money in e-commerce, for remote peer-to-peer payments, as well as for conditional payments. »
François Villeroy de Galhau describes the e-euro as an « additional option » for citizens. He maintains: « A digital euro will not replace physical cash or other forms of currency. »
No, we won’t have central bank accounts
Moreover, the management of this European digital currency should remain the responsibility of commercial banks. « We central banks have absolutely no intention of opening private accounts… [pour les citoyens] « . A holding limit will be applied to digital euro accounts, so that they can only be used as a means of payment and not as a store of value.
The head of the Banque de France also sees MNBCs as a tool to combat the emergence of stablecoins, currencies issued by « non-European private players ». He also states working on « a wholesale MNBC ». to promote tokenized finance.
MNBCs threaten our freedoms
The argument often put forward in many countries is that MNBCs will facilitate financial inclusion. However, the example of Nigeria shows that this is far from being the case. The President of the Banque de France emphasizes the digitization of cash. But he doesn’t talk about the traceability that will inevitably be associated with itwhatever he may say.
On the other hand, if fiat money » normal « But who’s to say that this cohabitation will last? Once the population gets used to MNBCs, they could very well gradually replace our current currencies and make cash disappear. Banknotes are the last vector of exchange that banks cannot trace or control. Their disappearance will spell the end of our monetary freedom. And in this sense, the « Cash+ » denomination of this digital euro poorly conceals its intentions: to make « cash » disappear in favor of « cash+ ». Admittedly, « cash- » wouldn’t have been much of a selling point.
Furthermore, as François de Galhau says, the central bank will be able to set a limit so that their MNBC does not serve as a store of value. This programmable currency could be completely controlled remotely. So, if all other forms of money disappear, it will mean the end of our ability to save and the end of our anonymity. And ever more control for governments.