In Chuck Palahniuk’s novel \u201cAdjustment Day\u201d (Adjustment Day), the concept of money with an expiry date was explored. One of the characters wrote in his book:<\/p>\n
\n\u00abThat\u2019s why it is so important for money to have an expiry date. Power passed from generation to generation in abstract wealth leads to inequality and corruption. You cannot save money for the sake of saving. Money must constantly work for the good of society\u00bb.<\/p>\n<\/blockquote>\n
Palahniuk’s novel appeared in 2018, and within a few years governments had a tool capable of turning that idea into reality.<\/p>\n
We are talking about CBDC<\/span>, whose programmable functions will allow central banks not only to manage monetary policy effectively but also to exercise control and censorship of transactions, as well as mass surveillance.<\/p>\n
Researchers CEPR<\/span> believe<\/a> that one of the main risks of introducing national digital currencies is the concentration of power in the hands of monetary regulators. For this reason it is hard to understand why even democratic countries study such a possibility.<\/p>\n
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- Tech companies and banks have long been collecting user data \u2014 this kind of surveillance is nothing new. Monetary regulators are also interested in this information because they use it to manage monetary policy.<\/li>\n
- CBDC will not only enhance the ability of central banks to collect data, but will also allow them to directly influence consumer spending patterns. Moreover, thanks to programmable capabilities, digital currencies can become a real weapon.<\/li>\n
- Experts believe that China \u2014 one of the leaders in the CBDC race \u2014 may use programmable money in tandem with a social credit system to strengthen the power of the Chinese Communist Party<\/span>. If successful, other authoritarian regimes may adopt this approach.<\/li>\n<\/ul>\n<\/div>\n
New Oil<\/h2>\n
If Bitcoin is called digital gold, data can rightly be considered digital oil. Back in 2006 British mathematician Clive Humby said<\/a>:<\/p>\n
\n\u00abData is the new oil. Like oil, it is valuable, but not in itself, but because of the products built from it. Data must be processed and analysed to extract value and improve business profitability\u00bb.<\/p>\n<\/blockquote>\n
Therefore there is nothing surprising in the fact that tech companies actively collect information about their users. To understand the scale of what is happening, one only needs to recall the Cambridge Analytica scandal.<\/p>\n
In 2018 it emerged that the British analytics company collected<\/a> user data via its Facebook app. The incident affected about 50 million users \u2014 the information pulled from their profiles was used to target political advertising, including during the US presidential race when Donald Trump won.<\/p>\n
Cambridge Analytica denied guilt to the end, but eventually lost almost all its clients and had to file for bankruptcy. Facebook founder Mark Zuckerberg acknowledged a mistake, though prior to that he spent five hours answering questions before the US Congress on two occasions.<\/p>\n
Regulators in the US took note of the company’s missteps and opened investigations. To settle a dispute with the regulator, the corporation paid<\/a> a $5 billion fine.<\/p>\n
Subsequently Congress summoned<\/a> the owners and executives of US tech giants to the regulator’s scrutiny, and EU regulators expressed concern about their growing influence and began<\/a> drafting bills to curb them.<\/p>\n
\nIn my mind no doubt that platforms \u2014 and the algorithms they use \u2014 can have an enormous impact on the way we see the world around us. We need to know why we are shown what we are shown.https:\/\/t.co\/5FHSXQlPBQ<\/a><\/p>\n
\u2014 Margrethe Vestager (@vestager) October 30, 2020<\/a><\/p><\/blockquote>\n