End of coins and banknotes. Instead of cash, a digital currency. It’s already the case ! | digital currency, ISW analysis

It can be said that money has become a completely worthless asset and its value is only conventional. This fact is conducive to the phenomenon of money printing, which consequently results in an increase in inflation. This phenomenon has been noticed by the central banks of the largest countries. The huge debts of governments, businesses and millions of citizens have reached a level where repayment is impossible. However, they are part of a larger puzzle of the banking system, as they are, for example, pension fund assets or government enterprise bonds.

These factors have pushed central banks to take control of the financial system under the guise of regaining control and rescuing it from becoming unstable and inefficient. Additionally, the wide popularity and adoption of cryptocurrencies has shown that payments can be anonymous and operate outside of the traditional financial system. It is big money that is in no way controlled and at the same time a trend that could compete in clarifying an alternative to the dollar as a global currency, for example in the form of Bitcoin.

The idea for this is CBDS, or Central Bank Digital Currency. It is a monetary policy tool intended to completely replace cash as a means of payment. It is intended to serve as a medium of exchange and to a lesser extent as a store of value. Its form is completely digital and it also allows its programming, that is, the use of automatic execution of transactions after fulfilling certain conditions, the so-called conclusion of “smart contracts”. Worldwide, digital currency has already been introduced in several small countries, such as the Bahamas, Cambodia, and Nigeria. However, when it comes to countries of great importance to the global economy, the People’s Bank of China is the most advanced in introducing CBDS. The digital yuan has entered China for general testing on over 140 million people and 10 million businesses. The value of the deal exceeded US$9.7 billion. An interesting fact is that the yuan is supposed to have an “expiration date”. The Issuer may redeem them after the “use” date. In practice, this would mean faster spending by consumers and the inability to save or take a certain portion of the funds by the bank as a penalty for not spending them, for example 20%. Such a solution could be used to stimulate the economy, but it seems highly unethical.

Europe is also working with the digital euro. This is a fairly advanced process, since the director of the European Central Bank, Mrs Christine Lagarde, has announced an introduction
e-euro by 2026 The issuer of the ECB must be the ECB and, in its assumptions, it would enable businesses and citizens to provide a settlement tool in the world of electronic payments as a reliable means of payment. In Poland, the NBP sees no clear benefits of introducing digital currency over the risk of perceived threats. Teacher. Glapiński says: “Polish conditions currently do not reflect the logic of other central banks when launching pilot tests for issuing CBDCs or implementing digital currency.” However, he argues that for many years they have been observing the work of other central banks in the area of ​​CBDC issuances and analyzing market needs in this regard. One can get the impression that in our country cryptocurrencies are not treated very friendly. The KNF often expressed negative opinions about them. Most blockchain companies are struggling to operate and are moving to other tax destinations. Officially, cryptocurrencies in Poland are not considered a means of payment, and their negative perception by the state changes when taxes are paid for them.

The introduction of the CBDC brings many threats to the ordinary citizen. All transactions will be monitored. Payment anionicity will become totally impossible. The money will be withdrawn 100%. Traditional banks will cease to exist as money will be issued directly by the country’s central bank. Governments will translate all of this into increasing digital operations and making payments easier for all citizens. Moreover, it is supposed to prevent money laundering. However, do these arguments really stem from a genuine concern or an attempt to increase society’s control and dependence on the state? Let’s imagine a scenario where the good, such as internet, television, mobile telephony or access to our own account, depends on our “good” behavior towards the authorities. Any manifestation of rebellion or opposing values ​​may result in total or partial cut off of specified goods by the authorities, and in the absence of cash, we are doomed to total submission. It seems abstract, however, such ideas are considered in China, which does not mean that democratic countries will not introduce them at home. Another more prosaic example is the attempt to order a plumber to fix the faucet in the apartment. The lack of money will bring us back to barter or force each plumber to have his own business, issue us an invoice for the service rendered and wait for payment in the form of virtual currency transfer to his account. The vision of living in a cashless world is a real threat to our anonymity and independence.

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