Searching for new money: CBDCs vs Lebanese bank crisis

Searching for new money: CBDCs vs Lebanese bank crisis

After decades of status quo, the world needs new money.

Bitcoiners praise Bitcoin ’s independence and censorship-resistance,
China hoards gold and actively implements the digital yuan,
Dollar and euro… well, they too must do something other than finding excuses for the inflation they have caused. And this something is CBDC – a central bank digital currency.

Yesterday both the EU and the US made another steps towards it.

? The ECB appointed five companies: Amazon, CaixaBank, Nexi, Worldline and EPI, to develop front-end prototypes of the future digital euro. This mission is a part of a two-year “exploration” of the CBDC option, supposed to end by October 2023.

? President Biden’s office has already expressed its ambition to use a US CBDC to strengthen the US’ role as a global financial leader. Following the President’s directive, the US Treasury released a set of reports dedicated to digital assets, with a specific focus on the digital dollar. While confirming the need for more research and setting up a work group with the Fed and other government agencies, the Treasury did touch the most delicate question related to the CBDCs – the privacy. And it sounded alarming:
? “Anonymity in a CBDC system could present greatly expanded money laundering, proliferation financing, and terrorist financing risks compared to physical cash. […] A CBDC could also offer valuable new opportunities for improved supervision and AML/CFT compliance.” ?

The “valuable new opportunities” refer to the central bank’s future power to directly access citizens’ accounts and basically “switch on/off” their money.

? Ironically, these news coincide with an outbreak of violence in Lebanon, where in just the last 48 hours 11 banks in different parts of the country have been “robbed” by their clients who demanded to access their money. The country is going through hard times, and for over 2 years people have been able to withdraw only $50/week (“sorry, we’ve lost the money you were required to trust us with…”)

Most “robbers” managed to get some ($12-25k) of their money and surrounded to the police, just like the man who threatened the bank worker with a gun last month to pay for his father’s hospitalization. Out of his $200k ho got only $30k.
The Lebanese Bank Association ordered all bank agencies to close from September 19th to 25th .

These two stories are in fact one, and it can be called “not your keys, not your money”.