Prof. Prasad warns of CBDC risks at WEF: Expiry dates, control over 'less desirable' purchases

28 JUNE 2023. Senior Professor of Trade Policy at Cornell University, Eswar Prasad speaks about Central Bank Digital Currencies (CBDC) at the World Economic Forum Annual Meeting of the New Champions 2023 in Tianjin.Show more

In sharp contrast to cash and money on bank accounts, CBDCs are programmable.

EXPIRATION DATES: If the government wants you to spend your money or punish you in any way, it would be childishly easy for them to program that any balance will become worthless after a certain date.

PURCHASE CONTROL: Prof. Prasad says "CBDC can be programmed to buy certain things but not other things that it deems less desirable, such as ammunition, drugs, pornography," but any purchase could be deemed 'less desirable', such as meat or airplane tickets.

This paves the way to a social credit system. People critical of the state could have their internet access cut off or their ability to travel. Merely the risk of repercussions could induce people to self-censor.

The claim that CBDC's have huge potential benefits is strictly speaking not a lie. However, it is misleading because there is a huge asymmetry in the potential benefits. CBDC's have huge potential benefits the powers that be, and almost no benefits, but huge risks, to the public.

Besides programmability, there are also other drawbacks of CBDCs, such as surveillance / less privacy. The powers that be can see all your transactions.

FULL PRESS CONFERENCE

The Future of Money | World Economic Forum
https://www.youtube.com/watch?v=gyANVmHJB3c

Segment start at around 32:30.

REFERENCES

Eswar S. Prasad, Senior Professor of Trade Policy at Cornell University.
http://prasad.dyson.cornell.edu/

SOURCE: https://twitter.com/DrewHLive/status/1676953720343646213