“He who controls the food supply controls the people; he who controls the energy can control whole continents; he who controls money can control the world.” – Widely Attributed to Henry Kissinger

Introduction to Central Bank Digital Currencies

Central banks around the world have long issued money in physical form, but the rise of digital technologies has spurred them to explore new frontiers, such as a Central Bank Digital Currency (“CBDC”), a digital version of a nation’s fiat money issued and backed directly by the central bank. Proponents herald CBDCs as the next evolution of money, a digital counterpart to physical cash, promising a more efficient financial landscape: reduced transaction fees, streamlined e-­commerce and international transfers, and greater financial inclusion for the unbanked. They envision a “digital banknote” for an increasingly digital world, fostering innovation and modernizing payment systems. Yet these promises conceal a sinister reality. CBDCs are not a mere upgrade to our financial infrastructure – they represent a seismic transformation of money itself, centralizing unprecedented power in the hands of governments and threatening financial privacy and individual liberty on an unimaginable scale. 

Imagine an ordinary citizen, Jane, buying coffee with a CBDC. Unlike cash, which leaves no trace, her transaction is recorded on a centralized ledger, linked to her identity, location, and spending habits. Over time, this digital trail reveals her political affiliations, medical needs, or even her support for controversial causes – data that could be accessed by governments or shared with third parties. This is not speculation but a plausible outcome of CBDC architecture, which, by design, enables pervasive surveillance. Supporters tout “managed anonymity,” claiming small transactions might retain some privacy while larger ones are traceable. But this is a hollow compromise. The Electronic Frontier Foundation and the American Civil Liberties Union emphasize that financial records are deeply personal, revealing sensitive details about one’s life. Anonymity in transactions is vital for free speech, especially for dissenters or marginalized groups whose purchases – books, donations, or protest materials – could expose them to retaliation. The centralized infrastructure of CBDCs, whether built on blockchain-­like ledgers or programmable money, ensures that personal data is always accessible, often with a mere court order or, in some regimes, without any oversight. Once this surveillance apparatus is in place, its expansion becomes inevitable, especially during crises or political unrest.  

History warns us of such dangers. In the 20th century, governments used financial controls to suppress dissent, from freezing dissidents’ bank accounts to monitoring transactions under programs like the United States’ post-­9/11 surveillance initiatives. CBDCs amplify this threat exponentially, creating a digital panopticon where every transaction – down to a vending machine purchase – can be tracked in real time, linked to identities, and analyzed for behavioral patterns. Unlike cash, which offers anonymity, CBDCs generate a permanent digital footprint, encompassing transaction histories, demographics, and even predictive profiles of individual behavior. This data can be weaponized far beyond payment processing, enabling governments to target specific groups, silence unpopular voices, or exacerbate inequalities by prioritizing access for compliant citizens. In authoritarian states, CBDCs could become tools of social control, programming money to restrict purchases or penalize dissent – scenarios hinted at by critics in discussions around China’s digital yuan trials, with concerns that transactions could potentially be tied to social credit systems. 

The global push for CBDCs intensifies this threat. China has advanced its digital yuan through extensive pilots, aiming to challenge the U.S. dollar’s dominance while tightening domestic control. The European Union and Hong Kong are testing or implementing CBDCs, while the Eastern Caribbean is planning a relaunch of its DCash CBDC after suspension. In the U.S., the Federal Reserve’s Project Hamilton, conducted with MIT, signals exploratory steps, though it claims no final decision without congressional approval. These developments are not just technical but geopolitical, as nations race to secure financial influence in a digital age. Yet the cost is clear: CBDCs risk entrenching a global surveillance economy where power concentrates in the hands of a few, eroding the freedoms of many.

What will it mean to live in a world where every transaction is watched, every choice recorded, and every dissent traceable? The shift to CBDCs is not merely a digitization of money – it is a gateway to authoritarian overreach, threatening the very foundation of individual and societal freedom. As this infrastructure takes root, the window to resist narrows. The stakes demand scrutiny, not complacency, lest we surrender our autonomy to a future of unyielding control. 

Unprecedented Surveillance and the Erosion of Privacy

The most immediate and chilling threat posed by CBDCs is the inherent and pervasive surveillance they enable. In today’s financial landscape, privacy is already fragile, compromised by laws like the Bank Secrecy Act, which mandates reporting of suspicious activities without notifying individuals. A CBDC would amplify this fragility, allowing real-­time, centralized monitoring of all transactions. Federal Reserve Chair Jerome Powell has acknowledged that a U.S. CBDC would require identity verification, potentially linking transactions to digital IDs and creating comprehensive government records. Internationally, officials like Agustín Carstens of the Bank for International Settlements have described CBDCs as enabling “absolute control.” In the U.K., proposals for a digital pound suggest transactions would be traceable under anti-­money laundering regulations, far less private than cash. Such visibility could expose everyone’s everyday activities – purchases of books, donations to causes, or medical expenses – to unwarranted scrutiny, chilling free expression and association. 

The risks extend beyond mere monitoring to the perils of data leakage and abuse. Centralized CBDC systems, by consolidating vast amounts of sensitive financial information, become attractive targets for cyberattacks, potentially leading to widespread identity theft and financial fraud. Even when data is legally obtained, the risk of abuse remains significant. Such data could be used for purposes entirely different from its original collection, leading to invasive marketing, discrimination, or manipulation of consumer behavior, especially in jurisdictions where the rule of law is weak. The sheer scale of existing financial surveillance provides a stark warning: in the U.S. alone, financial institutions were required to file approximately 3.2 million reports on suspicious customer activity to the government in 2022. A CBDC would dramatically expand this already sweeping surveillance state.

The implications for fundamental rights are clear. The Fourth Amendment of the U.S. Constitution has struggled to adapt to the digital age. While it protects information kept physically, it often provides less protection for data stored online. Additionally, law enforcement in the U.S. often does not need a warrant to access financial information held by commercial financial institutions. A CBDC would eliminate the last remaining buffer of protection that private financial institutions might offer by centralizing this sensitive information directly with the government. This effectively codifies and exacerbates the erosion of financial privacy rights, transforming every financial transaction from a private exchange into a government-­monitored activity.

Programmable Money and Censorship

Beyond even unprecedented persistent mass surveillance, CBDCs introduce an alarming new dimension of control: programmable money. This means the issuing central bank or government can embed specific conditions directly into the digital currency, dictating precisely how, when, or even if it can be spent. This capability represents a radical departure from the fundamental, fungible nature of traditional cash, transforming money from a neutral medium of exchange into a direct instrument of social engineering and control. Consequently, experts warn that CBDCs could pave the way for “digital authoritarianism,” where governments use them for political discipline.

The negative consequences for individual autonomy cannot be overstated. As International Monetary Fund Deputy Managing Director Bo Li openly stated, “By programming a CBDC, money can be precisely targeted for what people can own and what [people can do].” This is not a theoretical concern. Such programmability could manifest as prohibitions on purchasing certain goods, such as alcohol on a weekday or strict limits on the quantity of items one is allowed to buy. The potential limits and controls that could be programmed into a CBDC is limited only by one’s imagination. Ominously, this power could extend to preventing donations to specific disfavored organizations or unpopular causes. This mechanism allows the government to enforce social norms and political agendas through economic coercion, effectively dictating individual choices. 

The potential for financial censorship and exclusion is a profound threat. With a CBDC, the government gains an unprecedented ability to freeze or seize assets with only a few keystrokes, enabling instant and crippling economic sanctions against dissidents or anyone deemed an enemy of the regime. 

Furthermore, CBDCs can empower policymakers to impose negative interest rates, causing individuals to lose money (purchasing power) simply by holding it. While proponents argue this could spur spending and stimulate the economy, it fundamentally undermines money’s role as a reliable store of value and forces economic behavior. This direct manipulation of individual financial decisions represents a significant shift in the relationship between citizens and the government. 

The very concept of programmable money fundamentally politicizes the monetary system. Traditional monetary policy typically operates at a macroeconomic level, influencing broad economic conditions through interest rates and money supply. In contrast, programmable money enables micro-­level control, dictating individual spending choices and even prohibiting transactions based on government-­defined criteria. This transforms money from a neutral medium of financial exchange into a direct tool for social engineering and political enforcement. Federal Reserve Governor Michelle Bowman cautioned against this, stating, “There is also a risk that this type of control could lead to the politicization of the payments system and at its heart, how money is used.”   

The erosion of economic self-­determination is a direct consequence. The ability to program money means individuals lose the fundamental right to decide how to earn, save, and spend their own resources. If funds can be made to expire or be restricted to certain purchases, economic choices are no longer truly free. This is a direct assault on the principle of economic self-­determination, a cornerstone of individual liberty. The very idea of “permissionless” transactions, central to both physical cash and true cryptocurrencies, is obliterated. This is not merely an inconvenience. It is a fundamental philosophical shift, moving society closer to a command economy at the individual level, where the government, not the individual, wields ultimate power over one’s financial life.

What Are CBDCs

The emergence of digital currencies presents a fascinating paradox. There is the rise of decentralized cryptocurrencies, born from a cypherpunk ethos of individual liberty and resistance to surveillance and control. In stark contrast, a more insidious form of digital money is also taking shape – CBDCs. While often presented as a natural evolution of our financial system, a deeper examination reveals CBDCs to be instruments fraught with peril, threatening the very foundations of privacy, economic freedom, and the delicate balance of power between the individual and the government. 

At their core, CBDCs are the digital equivalent of a nation’s fiat currency – that is, dollars, euros, or yuan – but issued and overseen directly by the central bank rather than commercial banks or private entities. This means they hold the same legal status as physical cash or bank deposits, backed by the government’s authority and designed for everyday transactions, from buying groceries to settling debts. Unlike the coins in your pocket, however, CBDCs exist solely in electronic form, stored in digital “wallets” and transferred via secure networks. CBDCs can be retail-­oriented, accessible to the public for daily use, or wholesale, limited to financial institutions for large-­scale settlements. Either way, the central bank maintains ultimate control over issuance, circulation, and even destruction, ensuring stability in value tied directly to the national currency. In addition, the central bank has direct oversight of or at least an unfettered view of every transaction.   

This centralized control is where CBDCs diverge sharply from true cryptocurrencies like Bitcoin. Bitcoin, and many other cryptocurrencies such as Ethereum and Cardano, are built on decentralized, permissionless blockchain networks. “Permissionless” means anyone can participate without needing authorization from a central authority. That is, there are no gatekeepers. “Decentralized” means there is no single point of control; the network is maintained by a distributed ledger, verified by a multitude of participants spanning the globe, making it incredibly resilient to censorship and manipulation. Transactions are typically pseudonymous, offering a significant degree of privacy, and the supply of the currency is often governed by pre-­defined cryptographic rules, not the arbitrary whims of a central bank or government that needs to continuously print more money to fund its reckless spending, thereby devaluing the currency, fueling inflation, and eroding the savings of ordinary people.  

Conversely, CBDCs are fundamentally permissioned and centralized. The central bank dictates who can access the system, who can transact, and under what conditions. This is a crucial difference often obscured by proponents who attempt to conflate the two by highlighting the “digital” aspect of both. The digital nature is merely superficial; the underlying architecture and control mechanisms are diametrically opposed. Where cryptocurrencies champion individual sovereignty, CBDCs represent the ultimate expression of government financial control.

The Hidden Ambitions of CBDC Motivations

Governments and international financial institutions often present a seemingly benign array of motivations for pursuing CBDCs. They speak of enhancing “financial inclusion,” bringing banking services to the unbanked. They champion “efficiency” in payment systems, promising faster, cheaper transactions. We hear rhetoric about fostering “innovation” and combating “illicit finance” by providing a transparent and traceable alternative to cash.

These purported motivations have superficial appeal, and that is what makes them so effective and dangerous. However, upon critical examination, those hopeful motivations espoused by proponents of CBDCs give way to reveal darker ambitions. “Financial inclusion,” when coupled with a CBDC, could easily morph into a system where access to money is conditional, where certain transactions are disallowed, or where dissenters find their financial lives restricted. The promise of “efficiency” risks paving the way for a surveillance dragnet, where every purchase, every payment, every financial interaction leaves an indelible, transparent, and immutable trail accessible to the government. This is not efficiency; it is an infrastructure for pervasive mass surveillance and control.

The argument for combating “illicit finance” is particularly specious, often serving as a convenient justification for expanding government surveillance under the guise of public safety. While no serious person advocates for crime, the concept of illicit finance is remarkably elastic, often expanding to encompass activities deemed undesirable by the government, rather than genuinely criminal. With a CBDC, every transaction becomes a data point, every financial decision a piece of information for analysis. Imagine a world where your purchase of a book deemed subversive, or a donation to a politically unpopular cause, is instantly flagged and analyzed by government algorithms. This is not about stopping illicit global money flows; it is about establishing a financial panopticon. 

A financial panopticon is a fitting analogy when discussing CBDCs. A panopticon is a type of prison design conceived of by the eighteenth-­century English philosopher Jeremy Bentham. It is characterized by large, round rooms with the walls lined with prisoners’ cells and a watchtower in the center. By design, prisoners never know whether the watchmen in the tower are watching them, but the watchmen can observe any prisoner at any time. Bentham hoped that the panopticon could achieve in society that which had never been achieved – control of the mind instead of the body. He theorized that prisoners, constantly aware of surveillance but never certain when they were specifically being watched, would self-­regulate their behavior to avoid potential discovery and punishment. Fittingly, the word “panopticon” is derived from two Greek words that together mean “all-­seeing.” 

The Death of Financial Privacy: Building the Panopticon

In an era where digital footprints already map our lives with unsettling precision and ubiquity, CBDCs represent a dramatic escalation in the government’s mass surveillance capabilities. Governments tout these digital forms of fiat money as efficient, inclusive alternatives to cash, but their architecture inherently enables unprecedented tracking. CBDCs digitize every exchange, recording it in a centralized ledger controlled by authorities and thereby turning every purchase into a permanent dossier for scrutiny.

For centuries, cash has served as the bedrock of financial privacy. Cash makes anonymous transactions possible. This anonymity is not merely a convenience. It is a vital safeguard for dissent, for vulnerable populations, and for the fundamental right to conduct one’s life free from persistent governmental scrutiny. Cash enables people to engage in commerce, support causes, and just go about daily life without every transaction being known and permanently recorded by the government. Unfortunately, with the inexorable march towards a cashless society, the introduction of a CBDC presents a unique and unprecedented opportunity for governments to eliminate this last vestige of financial anonymity. 

Granular Surveillance Capabilities: The All-­Seeing Eye

At the heart of CBDCs lies their capacity for granular, real-­time monitoring, far surpassing current banking systems. Unlike physical cash or even existing digital payment systems that operate through commercial banks, every CBDC transaction – down to the amount, timestamp, location, and parties involved – becomes instantly accessible to central banks. For instance, the Bank for International Settlements has explored designs where CBDC systems record unique identifiers for each digital coin, linking them back to users during withdrawals or transfers. 

This is not speculative. China’s digital yuan, or e-­CNY, already demonstrates such tracking in practice, with tiered accounts requiring phone numbers for basic access and escalating to full identity verification for larger holdings. This results in a continuous stream of permanently recorded data that paints a vivid picture of an individual’s economic behavior, from routine groceries and sundries to one’s most intimate proclivities and pastimes. 

The implications are staggering. Every CBDC transaction – the amount, the exact time, the location of both parties, and the identities of the counterparties – is immediately accessible to the central authority. Imagine buying a book on a politically sensitive topic, donating to a controversial charity, or purchasing goods from a business critical of government policy. With a CBDC, these seemingly innocuous actions become data points in an aggregated digital dossier, a comprehensive record of an individual’s entire economic life – and by extension, social and political life. This is not merely about tracking large illicit transactions. It is about developing a meticulously detailed mosaic of every citizen’s daily habits, preferences, and associations. It is the height of naiveté to believe that people will not be punished and rewarded accordingly.

But it gets much worse. CBDCs integrate seamlessly with other government databases, amplifying their reach. Tax authorities, social security systems, law enforcement, and nascent social credit-­esque systems (remember the emergence of the functional equivalent of digital health passports rolled out by several states during COVID-­19, ostensibly for travel and entrance to certain places?) can cross-­link financial data, creating a holistic, 360-­degree surveillance view of citizens. In such a system, financial transactions are no longer private exchanges. They become public declarations, fully visible to the government with absolute precision. This level of aggregation creates a digital footprint so comprehensive and granular that it could be used to infer political affiliations, health conditions, social connections, and even future intentions. 

Erosion of Anonymity

Physical money allows exchanges without a trace – no digital breadcrumb leading back to real-­world identities. CBDCs strike at the core of such transactional anonymity. They embed identity linkage as a foundational element. This stands in sharp opposition to the early promise of cryptocurrencies like Bitcoin, which offer pseudonymous transactions where users operate via public addresses rather than names, preserving a veil of anonymity. Bitcoin’s decentralized ledger does not require central verification of identities, allowing transfers without revealing personal details. However, CBDCs are fundamentally antithetical to this principle. Their core design feature is identity linkage.

The central bank, by definition, must know who is holding and transacting its digital currency. This means that unlike the privacy afforded by a cash transaction, where identities are rarely exchanged unless legally required, every CBDC transaction is irrevocably tied to a verified identity. There is no equivalent of cash-­like privacy in this digital realm. The concept of an “anonymous” digital transaction, as it exists with physical currency, simply ceases to exist. This shift is not a minor technical detail. Rather, it is a paradigm-­shattering change in the fundamental nature of money and its relationship to individual freedom.

The risks are compounded by the potential for persistent digital identity wallets. These wallets, which hold an individual’s CBDC, are tied to national digital identity schemes, consolidating a vast array of personal information. Such a system creates a single point of failure, a honeypot of sensitive data that, if compromised, could lead to catastrophic identity theft or targeted harassment. Moreover, the very existence of such a comprehensive digital identity, linked to one’s financial existence, makes it far easier for authorities to monitor, restrict, or even freeze an individual’s access to funds based on subjective criteria or shifting political winds.

Chilling Effects

When individuals know they are under constant surveillance, their behavior inevitably changes. This phenomenon is known as the “chilling effect,” and it poses one of the most pernicious dangers of CBDCs. There is immediate and subtle self-­censorship of free expression and behavior that inevitably permeates daily life. People who are aware of constant monitoring self-­censor their spending, avoiding donations to controversial causes or purchases of sensitive items like books on dissent or other ideas disfavored by those currently in power. The Cato Institute warns that CBDCs threaten financial freedom, potentially deterring support for political groups under government watch. Under highly controlled regimes, this is already evident. For example, China’s digital yuan can link transactions to social credit scores, penalizing “undesirable” expenditures. Even in freer societies, the mere possibility of scrutiny and denial of access to funds creates an environment of hesitation and anxiety, as noted in an analysis by Ledger Insights, a leading publication on enterprise blockchain and distributed ledger technology.

Consider the act of donating to a political cause that challenges the established narrative. With a CBDC, every such donation is instantly traceable, creating a digital record that can be used for profiling or even retaliation. This pervasive knowledge of being watched leads individuals to pull back from actions that, while perfectly legal, might be perceived as non-­conformist or politically inconvenient.

The negative impact on political dissent, independent journalism, and vulnerable populations cannot be overstated. Activists relying on donations to sustain their work can have their funding streams cut off or monitored with ease. Journalists protecting their sources can have their financial transactions tracked, revealing critical information. Dissidents in oppressive regimes, already facing immense pressure, lose their last vestige of anonymous financial support, leaving them entirely exposed. Even seemingly mundane purchases, such as certain medications or counseling services, can carry a social or professional stigma if they become part of a government-­accessible ledger. The chilling effect does not merely deter illegal activities; it stifles legitimate and essential expressions of freedom as well as personal choices, fostering a culture of conformity and fear.

To the apologists of authoritarian power-­grabs, the trite and facile notion that “if you have nothing to hide, you have nothing to fear” fundamentally misunderstands the essence of privacy and human dignity. It falsely equates personal discretion with unlawful activity, ignoring the vast spectrum of deeply private, non-­illegal aspects of our lives – from health struggles and personal failures to intimate relationships and private thoughts – that each and every one of us conceal from public view. A demand for total transparency is not a genuine call for security, but instead, it is an insidious erosion of the personal autonomy and dignity essential to a free society. 

Programmable Money: The Tool of Authoritarian Control

CBDCs introduce a form of money that governments can program at will, embedding rules directly into the currency itself. This programmability shifts financial power decisively toward the state, allowing officials to dictate how, when, where, and even if citizens can spend their own funds. Unlike cash or even traditional bank accounts, which offer a degree of anonymity and flexibility, programmable CBDCs enable precise controls that erode personal autonomy in everyday transactions. For instance, expiration dates can force funds to vanish if not spent by a certain time, compelling people to use them quickly or lose them altogether. Spending limits can cap how much an individual can allocate to certain categories, while restrictions on merchant types are able to block purchases from disfavored businesses, all enforced automatically through the digital ledger. This level of granular control over individual economic activity fundamentally redefines personal financial autonomy, shrinking the sphere of individual decision-­making to an alarming degree.

Such control features are not merely hypothetical. Central banks are already exploring them as core elements of CBDC design. In India’s digital rupee trials, for example, programmability allows for parameters like expiration dates and merchant category codes to be set, ensuring funds are used only in approved ways. Similarly, discussions around programmable payments highlight how CBDCs can automate rules for stimulus funds, preventing their use on items like alcohol or tobacco. This level of control extends to negative interest rates, which central banks could apply selectively to individual holdings. In a low-­interest environment, a CBDC might deduct value from accounts over time, but unlike broad monetary policy, it could target specific users – perhaps those deemed to be hoarding cash – pushing them to spend or invest in government-­preferred ways. European Central Bank officials have noted that CBDCs could facilitate negative rates without the escape valve of physical cash, as holdings below certain thresholds might avoid penalties, but larger amounts would not. This results in a tool that nudges behavior in governmentally-­favored ways through financial erosion. 

Financial Geofencing

Geofencing adds yet another chilling layer of control. Geofencing – the ability to restrict where individuals’ money can be spent, down to specific geographical locations – transforms their digital wallet into a virtual leash, effectively tethering economic activity to government-­approved locations. For cross-­border payments, geofencing might block non-­residents from using a CBDC abroad, limiting its flow and enforcing capital controls. Imagine a scenario in which the places where you can spend your salary are restricted to local merchants or where protesters are barred from buying supplies beyond their immediate area. These are the kinds of restrictions that programmable money makes effortless. Central banks tout such programmable restrictions as a way to enhance efficiency, but clearly, they are also, and likely primarily, a highly effective means of control. The implications for personal mobility and freedom of association are stark and deeply concerning. 

This is not just about hard geographical boundaries. Geofencing can extend to more subtle and insidious applications. For instance, geofencing can be dynamically tied to public health mandates, restricting purchases in areas with reported outbreaks (conversely, completely restricting the ability to spend funds outside of an outbreak area for those living there) or even limiting access to funds for those who have not complied with certain health directives within a specific zone. Similarly, during times of perceived crisis or emergency, the government could “geo-­fence” funds to ensure they are spent only on government-­approved “essential” goods and services, preventing purchases deemed “non-­essential” or speculative. This granular ability to segment and control financial activity based on location and context creates a framework for unprecedented social and economic control.

Beyond the technical capabilities, the ability for censorship and financial exclusion woven into the fabric of CBDCs dwarfs similar capabilities with current systems. In a traditional cash-­based society, even in a highly digitalized one, there remains a degree of anonymity and a barrier to instantaneous, government-­directed financial freezing. With a CBDC, the government possesses the unprecedented power to instantly freeze or seize funds without due process or delay. This is not hyperbole; it is a direct consequence of a centralized, programmable digital currency. Your ability to feed your family, pay your rent, or access medical care can be revoked with the click of a button, entirely at the discretion of the government. This ability extends to blocking transactions to or from specific individuals, organizations, or even entire regions. The government’s ability to financially “blacklist” individuals based on their political views, social credit scores, or even their health status becomes terrifyingly easy, efficient, and pervasive with a CBDC.

Social Engineering

Critics warn that programmable money makes it disturbingly easy for social engineering and behavior modification. CBDC transaction data can reveal intimate details, from spending habits to affiliations, allowing governments to profile and penalize. In a system where every purchase is tracked, low social credit – tied to perceived disloyalty or non-­conformity – could trigger automatic restrictions and punishment. Health status, which can be inferred from buying patterns like medications or gym memberships, can justify exclusions, such as denying access to certain locations, services, and even medical care during purported pandemics to those who refuse to be vaccinated. Democratic nations disingenuously frame this as a net positive for society, but in actuality, it gives the government unchecked power to define “undesirable” traits, turning financial inclusion into a privilege to be revoked at the whim of those in power.

This control morphs into outright social engineering, where CBDCs incentivize or punish behaviors through embedded rules. Governments can reward “green” spending – for instance, subsidies for electric vehicles or organic foods – while penalizing purchases of “fossil” fuels or processed snacks, all programmed into the currency. Taxes on unhealthy items, already used in some countries to curb consumption, can be amplified via CBDCs by automatically deducting extra fees for sugary drinks or fast food. While some argue these are noble goals, the underlying mechanism is one of coercion, not choice. It is about the state actively shaping individual behavior, dictating what you should eat, how you should travel, and even how you should live your life, all based on the omnipresent CBDC. What begins as encouragement for perceived better choices results in a system that molds society from the wallet outward, prioritizing state goals over individual liberty. 

The Canadian trucker protest of 2022 against vaccine mandates provides an ominous, real-­world example of government leveraging financial infrastructure to crush dissent, even without a full CBDC. Invoking the Emergencies Act, which enabled measures to combat financing of activities deemed threats to public order, the Canadian government froze bank accounts and cryptocurrency wallets linked to protesters, blocking over $3 million without court orders. Financial institutions and cryptocurrency exchanges operating in Canada swiftly complied, sanctioning dozens of crypto addresses and halting transactions for individuals who donated as little as $50. But the crackdown did not end there. Over 200 bank accounts belonging to those donating to the protesters were also frozen, totaling millions of Canadian dollars.

The Canadian government had to rely on a network of third-­party financial institutions and a newly invoked Emergencies Act to carry out its goal of starving the protestors of funds. Although it was effective, the process required significant coordination, legal orders, and time. Had Canada possessed a CBDC at that time, such financial suppression could have been executed with alarming ease and near-­instantaneous effect, bypassing traditional intermediaries and their procedural safeguards entirely.

The act of cutting off funds is an exceptionally potent and often devastating tactic for governments seeking to silence dissent. It attacks the very lifeblood of a protest movement on multiple critical levels: practical, logistical, psychological, and organizational. Practically, protestors face the immediate loss of basic necessities – food, water, fuel for their vehicles, and shelter – paralyzing their ability to sustain presence and operations. The inability to acquire essential equipment, from sound systems to medical supplies, diminishes their voice and resilience. In addition, access to legal counsel is crippled, making individuals more vulnerable to government prosecution and increasing the personal risks of engagement.

Psychologically, the impact is equally profound. Financial pressure creates immense personal stress, transforming participation from a civic act into a potentially ruinous personal sacrifice. The fear of personal ruin – losing savings, credit, and employment – extends to families, creating an agonizing dilemma for those involved. It fosters a sense of helplessness and isolation, as individuals feel cut off from the mainstream financial system because their actions are effectively delegitimized by governmental decree. Organizers lose the capacity to lead because their financial lifelines are severed, making it impossible to coordinate, communicate, or maintain momentum. The very trust that binds a movement together can rapidly erode when its financial foundations are suddenly removed.

Furthermore, the aggressive financial actions taken by the Canadian government sent a grim message beyond the active protestors themselves. Individuals who might otherwise offer even small donations to causes they believe in, but prefer to remain anonymous or simply avoid direct engagement, are now faced with the stark realization that their financial support could expose them to severe personal consequences, including frozen assets. This creates an intense chilling effect on philanthropic freedom and civic participation, stifling future dissent and expression by making monetary support inherently risky.

Ultimately, cutting off financial lifelines serves as a powerful deterrent. It sends an unequivocal message from the government: “We are serious, we will use all available tools, and there will be severe economic consequences for participation.” The Canadian episode stands as an unnerving warning. It clearly demonstrates how financial pressure can and will be used against future movements, fostering a broader “chilling effect” on civil liberties and the fundamental right to protest. A CBDC will streamline and amplify these powers, making such actions instantaneous, pervasive, and virtually impossible to circumvent. 

This is the dystopian future we risk if we fail to recognize the Trojan horse hidden within the promise of CBDCs. We must ensure one is never introduced in the U.S. Once programmable money takes hold, the line between economic policy and political repression disappears, empowering the government to silence opposition through its absolute control over the nation’s money.

False Promises: Deconstructing the Pro-­CBDC Narrative

Governments and central banks around the world are increasingly touting CBDCs as a panacea for longstanding issues in the financial system. Proponents claim that these digital versions of fiat money, issued and backed by central authorities, will usher in an era of universal inclusion, enhanced efficiency, reduced crime, and cutting-­edge advancements. However, upon critical examination, these promises collapse under the weight of practical limitations and unacknowledged dangers. Far from empowering individuals, CBDCs threaten to further entrench government surveillance and control at the expense of personal autonomy.

Financial Inclusion

One of the most frequently invoked justifications for CBDCs is their supposed ability to bridge gaps in financial access, particularly for underserved populations. Advocates contend that a CBDC could extend banking services to the unbanked and underbanked, enabling seamless participation in the economy without the need for traditional accounts. The International Monetary Fund has explored how CBDCs might address barriers related to access, cost, and trust, potentially shifting cash-­reliant individuals toward digital alternatives. While the goal of universal financial access is undeniably noble, the proposed solution of a CBDC is not merely insufficient; it is fundamentally flawed and potentially counterproductive.

At their core, CBDCs require digital literacy, access to smartphones or other digital devices, reliable internet connectivity, and verifiable identification. These elements may remain out of reach for some Americans, particularly in underserved communities, potentially limiting access to CBDCs. For them, mandating a CBDC without first bridging this gap would exclude those already marginalized, deepening their economic isolation rather than alleviating it.

The real path to financial inclusion lies in strengthening and innovating upon existing, proven solutions. Improving and expanding the reach of traditional banking infrastructure, promoting mobile banking solutions that are interoperable and accessible, and critically, preserving and supporting the use of physical cash are far more effective and less intrusive solutions than a CBDC.

Efficiency

Proponents also champion CBDCs for their potential to streamline payments, reduce transaction costs, and modernize outdated systems, i.e., make the financial system more efficient. They promise frictionless transactions, immediate settlement, and reduced costs compared to those associated with physical cash handling as well as the current digital structure in which multiple parties are involved in the settlement of transactions.

However, the alleged efficiency of a CBDC is directly proportional to its level of traceability. For a central bank to achieve the degree of oversight it truly desires, every transaction must be recorded and accessible. Such surveillance capabilities impose enormous operational burdens. Building and maintaining systems to monitor every transaction requires vast resources, from data storage to cybersecurity defenses, potentially offsetting any operational efficiency gains. This type of system does not make payments more efficient for the people, but it does make surveillance more efficient for the government.

Centralizing aspects of the monetary system, such as CBDC issuance and transaction oversight, within the central bank introduces systemic risks that far outweigh any perceived efficiency gains. The failure of a single, centralized digital system would have catastrophic consequences, paralyzing the entire nation’s economy. Unlike the distributed and relatively resilient nature of the existing private payment network, a CBDC creates a single point of failure, making the financial system profoundly vulnerable to technical glitches, cyberattacks, or even targeted political disruptions.

Furthermore, the notion that a CBDC is necessary for payment innovation is simply false. The private sector has already demonstrated remarkable ingenuity in developing faster, more efficient payment solutions. Real-­time payment systems, sophisticated mobile payment applications, decentralized cryptocurrencies such as Bitcoin, and stablecoins (privately issued digital currencies pegged to a stable asset like a fiat currency) currently enable rapid, low-­cost transfers without central oversight. These systems are already addressing many of the supposed inefficiencies that CBDC proponents claim to solve. These private innovations arise from competition and market demand, creating a dynamic environment for technological advancement. In contrast, a government-­mandated CBDC will stifle this organic innovation by discouraging private solutions and imposing a monolithic, state-­controlled infrastructure. 

The true efficiency lies in encouraging a vibrant, competitive ecosystem of payment providers, not in centralizing control under a single government-­controlled entity.  

Combating Illicit Finance

Perhaps the strongest, yet most disingenuous, argument for CBDCs is their alleged ability to combat illicit finance. Proponents often invoke the specter of money laundering, terrorism financing, and other criminal activities in arguing for fully traceable digital currency as the ultimate weapon in this fight. But this argument greatly overstates the potential effectiveness of CBDCs and, more importantly, serves as a transparent pretext for the expansion of mass surveillance and control.

Sophisticated criminals are highly adaptable. They operate at the fringes of the financial system precisely to evade detection. The deployment of a traceable CBDC would not eradicate illicit finance. It would simply force it deeper underground, driving bad actors to alternative, less regulated, or entirely untraceable methods, thereby rendering CBDC traceability less effective than claimed. This is not mere speculation. History is replete with examples of prohibition and stringent regulation pushing undesirable activities into the shadows, making them harder, not easier, to monitor. 

The true danger of the CBDC “combating illicit finance” narrative is that it erodes the presumption of innocence by treating all users as suspects by default. Cash and privacy-­preserving payment systems are not inherently criminal. They afford legitimate anonymity in a free society. Additionally, CBDCs undermine proportionality, as the vast data collection required far exceeds what is needed for targeted enforcement. With a CBDC, every purchase, every transfer, every financial interaction becomes a data point in a governmental ledger ripe for analysis, profiling, and potential misuse. 

Privacy is not a crime. It is a fundamental human right that is essential for individual liberty, dissent, and the flourishing of a truly free society. To equate the desire for private transactions with criminal intent is a dangerous authoritarian fallacy but one with undeniable superficial appeal for many. The erosion of financial privacy under the guise of fighting crime is a price no free society should be willing to pay.

Innovation

Finally, proponents of CBDCs claim they will spur innovation in the financial sector. This is arguably the most ironic of the pro-­CBDC arguments because a centralized, permissioned digital currency system is inherently antithetical to the very spirit of innovation. True innovation thrives in open, decentralized environments, driven by competition, experimentation, and user empowerment – precisely the characteristics that define the burgeoning cryptocurrency space.

By design, CBDCs are government-­controlled financial instruments. Decisions regarding their architecture, features, and even their permitted uses are made by central planners, not by market forces or individual preferences. Such a top-­down approach inevitably leads to stagnation and a lack of adaptability. Compare this to the dynamic, permissionless innovation seen in the world of decentralized cryptocurrencies, where developers from around the world can build new applications, services, and financial tools without seeking permission from a central authority. This open-­source, collaborative model has led to an explosion of creativity and utility, demonstrating the power of true, bottom-­up financial innovation.

The innovation promised by CBDCs is, in reality, innovation for the state, not for users. It is innovation geared toward enhanced control, surveillance capabilities, and the potential for new monetary policy tools. The focus shifts from empowering individuals and fostering free markets to expanding state oversight and manipulation of economic behavior.

The arguments for CBDCs – financial inclusion, efficiency, combating illicit finance, and innovation – fail upon closer inspection. They are not genuine solutions to societal problems but rather thinly veiled justifications for an unprecedented expansion of governmental power. The costs to privacy, civil liberties, and a free society are immense and irreversible. CBDCs must be exposed for what they truly are – a pernicious step toward a cashless, surveilled, and controlled future. 

The Cryptocurrency Contrast: Decentralization Versus Centralization

The rise of digital currencies has presented a fascinating paradox. On one hand, there is the revolutionary promise of cryptocurrencies, born from a desire for decentralization, individual sovereignty, and resistance to traditional gatekeepers. On the other, there is the emergence of CBDCs that are sold with the rhetoric of efficiency and modernization, but they are fundamentally antithetical to the very principles that make cryptocurrencies truly liberating. 

At the heart of this divide lies a fundamental disagreement on the very architecture of digital money: decentralization versus centralization. Cryptocurrencies like Bitcoin emerged as a direct response to the perceived failures and vulnerabilities of centralized financial systems. They operate on decentralized networks, where no single entity holds dominion over the public ledger or transactions. This structure distributes power across a global network of participants who validate transactions and secure the ledger. This permissionless nature means anyone can participate, transact, and innovate without needing approval from a central authority. It is a system designed to be resistant to single points of failure, censorship, arbitrary intervention, and centralized control. 

This stands in stark contrast to CBDCs that are, by definition, centralized. They were created as a calculated response from governments, mimicking the digital form of crypto while embedding mechanisms that could amplify state oversight and control. CBDCs are issued and controlled by a nation’s central bank and represent the ultimate concentration of monetary power. Every transaction, every unit of currency, resides within a system ultimately beholden to state control.

Permissionless access further illustrates this divide. In decentralized cryptocurrency ecosystems, anyone with an internet connection can participate without seeking approval from gatekeepers. Users generate digital wallets, mine tokens, or engage in transactions freely, embodying a permissionless ethos that democratizes finance and circumvents traditional barriers like banking requirements or geographic limitations. A digital or crypto wallet holds the private “key” – a secret code linked to the corresponding public address – that proves ownership of a specific amount of crypto located at the public address on the particular digital network (e.g., Bitcoin) and thereby grants the ability to authorize transactions. 

Whereas, CBDCs are permissioned, meaning access and usage is regulated by authorities and likely require identity verification or compliance with state-­mandated protocols. This design may streamline operations for central banks, but it introduces vulnerabilities where governments can deny access to dissidents, enforce spending restrictions, and track behaviors deemed undesirable. The permissionless model of decentralized crypto thus serves as a safeguard against exclusion, allowing even the unbanked to engage in global finance without intermediaries dictating terms.

Pseudonymity versus forced identity revelation is another critical distinction. Decentralized cryptocurrencies enable users to transact under pseudonyms. Transactions are recorded on a public ledger, but the identities of the participants are not directly linked to their wallet addresses. While sophisticated analysis can sometimes de-­anonymize transactions, the fundamental design offers a degree of separation between one’s financial activities and their real-­world identity. While not fully anonymous, this pseudonymity allows individuals to maintain control over their financial footprints, shielding them from unwanted and unwarranted scrutiny. This is not about enabling illicit activities; it is about safeguarding financial privacy, a fundamental principle of individual freedom.

CBDCs inherently lack this commitment to privacy. The very nature of a centralized, state-­controlled digital currency means that the central bank, and by extension the government, has granular insight into all transactions, which are tied directly to verified users. Although proponents argue that “privacy safeguards” are possible, these are granted by design, not inherent to the system. Consequently, such safeguards can be modified, revoked, or circumvented by legislative or executive fiat. The control remains with the issuer, not the individual. For CBDCs, that is a feature, not a flaw. 

Beyond privacy, the concept of censorship resistance is another critical differentiator. In robust decentralized cryptocurrency networks, once a transaction is broadcast and confirmed, it is immutable and cannot be reversed or blocked by any single entity. Decentralized networks like Bitcoin achieve this through a consensus mechanism where “miners” – computers that solve complex mathematical puzzles to validate and secure transactions on the network – worldwide validate blocks, making it computationally infeasible for any single actor to alter or halt the chain without overwhelming majority control. 

However, with a CBDC, that power is dangerously real. CBDCs represent the anti-­crypto. They are the state’s attempt to co-­opt the form of digital currency while stripping away its liberating core. The inherent vulnerability of a centralized system to political pressure, technical failures, and malicious attacks are risks that are far too great to countenance when the fundamental infrastructure of a nation’s money is at stake.

Retail and Wholesale CBDCs

CBDCs are often broken down into two main types: retail CBDCs and wholesale CBDCs. While both are digital currencies, they are designed for very different purposes and audiences. Understanding the distinction is key to grasping the full scope of CBDC development and implementation around the world.

Retail CBDC

A retail CBDC is essentially a digital version of cash available to the general public. It is a direct liability of the central bank, similar to physical cash. Depending on the design, a retail CBDC may allow individuals and businesses to hold accounts directly with the central bank, through commercial banks, or via other authorized intermediaries. This would enable secure, instant payments for everyday transactions, such as buying groceries or paying bills, without relying solely on traditional commercial banks or payment processors. The primary goal is to provide a safe, universally accessible, and efficient payment option for everyone, which could also promote financial inclusion for those without bank accounts. As a direct liability of the central bank, a retail CBDC eliminates commercial bank credit risk, ensuring its stability is tied to the central bank’s credibility rather than private institutions. This distinguishes it from digital money held as deposits at commercial banks, which are liabilities of those banks, not the central bank.

Wholesale CBDC

A wholesale CBDC, in contrast, is designed for interbank settlements and large-­value transactions among commercial banks, central banks, and other authorized financial institutions. It is not intended for public use. Instead, it would be a digital token used by these entities to settle payments. This type of CBDC aims to improve the efficiency, speed, and security of financial markets by enabling real-­time settlements of large transactions, such as securities trading or cross-­border payments. For example, in the current system, a cross-­border payment can take several days to settle. With a wholesale CBDC, these payments could be executed almost instantly and around the clock, reducing both time and cost. It would also reduce counterparty risk in financial transactions because payments would be settled directly and definitively on a secure digital ledger. 

Key Differences

The most significant difference between the two is their intended user and purpose. A retail CBDC is for the general public – individuals and businesses – and is meant for everyday payments and to encourage financial inclusion. It would be widely and universally accessible. A wholesale CBDC, on the other hand, is restricted to commercial banks, central banks, and other authorized financial institutions for interbank settlements and large-­value transactions. Its accessibility is limited to these entities. While a retail CBDC eliminates commercial bank credit risk as a direct central bank liability, a wholesale CBDC focuses on reducing counterparty risk in financial markets. Ultimately, a retail CBDC has the potential to be transformative for public payments and banking, while a wholesale CBDC is more about revolutionizing the financial market infrastructure.

The Global CBDC Implementation Landscape

As the digital transformation of global finance accelerates, the Atlantic Council’s Central Bank Digital Currency Tracker reveals a remarkable shift in monetary policy worldwide: as of August 2025, 137 countries and currency unions – representing 98 percent of global GDP – are or were actively exploring CBDCs. This represents a dramatic expansion from just 35 countries in May 2020, signaling an alarming global race toward digitizing sovereign currencies. Central banks advocate for CBDCs by citing compelling motivations for this transformation: enhancing financial inclusion for the unbanked, reducing transaction costs, improving cross-­border payment efficiency, and enabling more precise implementation of monetary policy through programmable money.  

However, this rapid adoption also introduces significant challenges and concerns, including vulnerability to cyberattacks, potential destabilization of traditional banking systems, and most critically, the erosion of financial privacy through comprehensive transaction monitoring that can enable mass surveillance and governmental control over individual economic activity. This section examines the diverse spectrum of CBDC implementation statuses worldwide – from fully operational systems to pilot programs and early-­stage research – analyzing both the transformative potential and the fundamental risks these digital currencies present to the future of money and financial freedom.   

CBDC Status in the United States

According to the Atlantic Council’s CBDC Tracker, the U.S. has formally banned the development of a CBDC, making it the only country worldwide to do so. This status stems from President Trump’s Executive Order 14178 issued in January 2025, which prohibits any U.S. agency from establishing, issuing, or promoting a CBDC, citing concerns over financial stability, privacy, and government overreach. The order effectively terminated any ongoing research or planning for a retail CBDC, which would be accessible to the general public for everyday transactions. Prior to this, the Federal Reserve had been exploring CBDC concepts through initiatives like Project Hamilton, but these efforts were discontinued following the executive action. However, executive orders remain vulnerable to political change – they can be revoked by future presidents, overturned by Congress, or challenged in court. This CBDC ban, while significant, represents a temporary reprieve rather than a permanent safeguard.

The U.S. continues to engage in limited research on wholesale CBDC applications, which are designed for interbank settlements and large-­value transactions among financial institutions. Notably, the Federal Reserve is participating in Project Agorá, a collaborative initiative with the Bank for International Settlements and six other central banks to explore tokenized commercial bank deposits and wholesale CBDCs for cross-­border payments. This involvement indicates that while retail CBDC efforts are prohibited, the U.S. remains active in international discussions on wholesale digital currency innovations to enhance payment efficiency and interoperability without direct public issuance. 

Legislatively, the U.S. House of Representatives passed the Anti-­CBDC Surveillance State Act (H.R. 1919) in July 2025, which seeks to prohibit the Federal Reserve from issuing a CBDC or offering related services directly to individuals without explicit congressional authorization. As of August 2025, the bill has advanced to the Senate for consideration but has not yet become law. If enacted, it would codify the executive ban into statute, further solidifying the U.S. stance against CBDC exploration and positioning it as a global outlier amid widespread international pilots and launches.

Countries With “Operational” CBDCs

Three countries have moved beyond exploration to full CBDC implementation: the Bahamas with its Sand Dollar, Nigeria with the eNaira, and Jamaica with JAM-­DEX. These pioneering implementations provide the world’s first comprehensive case studies of government-­issued digital currencies in operation, revealing both the technical possibilities and the significant challenges of digitizing national monetary systems. Despite official launch status, all three continue to face substantial adoption hurdles that highlight the complex relationship between central bank objectives and public acceptance of digital money.

The Bahamas: Sand Dollar –The Bahamas pioneered the global CBDC landscape with the launch of the Sand Dollar on October 20, 2020, making it the world’s first fully implemented retail central bank digital currency. Issued by the Central Bank of the Bahamas, the Sand Dollar serves as a digital version of the Bahamian dollar with equivalent value and accessibility through mobile applications or physical cards for everyday payments. The program was designed to enhance financial inclusion, reduce cash dependency, and improve transaction efficiency across the archipelago, particularly benefiting remote islands where traditional banking infrastructure faces significant challenges. Operating on a centralized ledger system, the Sand Dollar relies on authorized financial institutions to facilitate public access, and while adoption has grown by 2024, usage remains limited compared to traditional cash transactions and private digital payment methods.

However, the Sand Dollar’s implementation has revealed significant concerns regarding privacy erosion, mass surveillance capabilities, and enhanced government control over individual financial autonomy. The centralized ledger architecture records all transactions while linking them to user identities through mandatory Know Your Customer requirements, creating comprehensive digital trails that eliminate the anonymity traditionally provided by cash transactions. This system enables the central bank or government to access detailed transaction histories that could potentially expose highly personal information including individual habits, political affiliations, or medical purchases, thereby threatening free expression and creating particular vulnerabilities for activists or minority populations. The infrastructure’s real-­time monitoring capabilities facilitate mass surveillance of financial activities, which proves especially concerning in a small nation like the Bahamas where dissent or political opposition often faces close scrutiny, potentially enabling targeted surveillance of individuals with data that could be shared with foreign governments under international agreements.

The centralized nature of the Sand Dollar grants the central bank unprecedented authority to freeze accounts or restrict transactions, creating substantial risks for authoritarian overreach that could manifest during periods of political unrest when governments might limit dissidents’ access to funds, thereby stifling protest activities or suppressing free speech. The system’s programmable features further amplify these concerns by potentially allowing authorities to impose restrictions on where or how Sand Dollars can be spent, fundamentally altering the relationship between citizens and their monetary system while expanding state control over individual financial decisions.

Jamaica: Jam-­Dex – Jamaica entered the CBDC arena with the launch of Jam-­Dex in July 2022, establishing its digital currency as legal tender under the authority of the Bank of Jamaica. Operating on a centralized platform accessible through digital wallets for retail transactions, Jam-­Dex was designed to reduce cash usage and promote financial inclusion throughout the country. The program has concentrated on expanding domestic reach by integrating the digital currency into everyday transactions including public transportation and retail purchases, achieving growing adoption by 2024, particularly among urban populations who have greater access to the necessary technological infrastructure.

Despite these implementation successes, Jam-­Dex presents serious privacy and control concerns that mirror broader CBDC risks while reflecting Jamaica’s specific political and social context. The system’s mandatory user registration requirements link all transactions to individual identities, effectively eliminating the cash-­like anonymity that traditionally protected sensitive personal financial information. This comprehensive tracking capability exposes citizens to potential misuse of their transaction data, particularly regarding purchases of political materials or donations to controversial causes, with the central bank’s access to this information creating risks for abuse, especially significant given Jamaica’s history of political polarization and social tensions.

The centralized ledger system enables real-­time tracking of all financial transactions, establishing a surveillance apparatus capable of monitoring citizens’ financial behavior with unprecedented precision. This monitoring capability proves particularly concerning for vulnerable populations including activists, journalists, and political dissidents who may face retaliation based on their spending patterns or financial associations. Furthermore, Jam-­Dex’s programmable features could enable the government to impose targeted restrictions during crises or against specific groups, potentially suppressing protests by cutting off funding sources or enhancing state control over dissenting voices, thereby fundamentally altering the balance of power between citizens and government authorities.

Nigeria: eNaira – Nigeria launched the eNaira on October 25, 2021, as the country’s official central bank digital currency issued by the Central Bank of Nigeria. Built on a blockchain-­based platform accessible through digital wallets, the eNaira was designed to reduce cash dependency, enhance financial inclusion, and combat illicit transactions within Africa’s largest economy. The system supports both retail and wholesale transactions, though adoption has progressed slowly due to public skepticism and significant infrastructure challenges that reflect Nigeria’s complex economic and technological landscape. By 2024, the eNaira has achieved integration into some government payment systems and merchant transactions, though widespread adoption remains limited by various practical and cultural barriers.

The eNaira’s implementation raises substantial concerns about privacy erosion within Nigeria’s complex social and political environment. While the system operates on blockchain technology that appears distributed, the central bank maintains control over the ledger and requires comprehensive user identification for all transactions. This architecture eliminates financial anonymity and creates transaction records that could reveal highly sensitive information about individual purchases, including medical treatments or religious activities –  information that could be weaponized against individuals in a country characterized by significant religious and ethnic tensions that often manifest in social and political conflicts.

The eNaira’s comprehensive traceability capabilities enable mass surveillance that proves particularly troubling given Nigeria’s historical record of government surveillance targeting activists, journalists, and political opposition figures. The system’s data collection and monitoring capabilities could facilitate citizen profiling activities, especially during periods of political unrest when government authorities might seek to identify and suppress dissenting voices. The central bank’s control over the eNaira infrastructure provides authorities with the ability to freeze accounts or restrict transactions, creating substantial risks in Nigeria’s volatile political climate where such powers could be abused to silence opposition or target specific ethnic or religious groups. The currency’s programmable features further amplify these concerns by potentially enabling discriminatory policies that could limit funding for certain communities or organizations, thereby reinforcing authoritarian control mechanisms and providing new tools for stifling dissent while expanding state surveillance capabilities over individual financial autonomy.

The Real-­World Impact of CBDCs

The experiences of the Bahamas, Jamaica, and Nigeria reveal a disturbing pattern that transcends geographic, economic, and political differences: regardless of a nation’s size, development level, or governmental structure, the implementation of CBDCs consistently creates identical mechanisms for privacy destruction, mass surveillance, and authoritarian control. From the Caribbean archipelagos to West Africa, these pioneering systems have eliminated the fundamental anonymity that cash provides, replacing it with comprehensive digital tracking that exposes citizens’ most sensitive financial behaviors to government scrutiny. The technical architecture may vary – from the Bahamas’ centralized ledger to Nigeria’s blockchain platform – but the outcome remains constant: citizens find themselves subject to real-­time monitoring, account freezing capabilities, and programmable restrictions that can be weaponized against political dissent, activism, or any behavior deemed undesirable by the state. 

Most tellingly, all three nations struggle with low adoption rates despite years of promotion, indicating that populations instinctively recognize the fundamental threat CBDCs pose to personal freedom and financial privacy. These early implementations serve not as success stories, but as proof-­of-­concept demonstrations that CBDCs function exactly as critics have warned – as sophisticated tools for financial surveillance and social control that governments can deploy regardless of their stated democratic values or constitutional protections, making the global expansion of this technology a clear and present danger to individual liberty worldwide. 

Countries With “Pilot” CBDCs

While only three nations have fully launched CBDCs, a much larger group of 49 countries are currently operating pilot programs, representing the most extensive phase of CBDC development where theoretical concepts meet real-­world testing. These pilot programs span diverse economic systems and regulatory environments, from authoritarian regimes to democratic societies, providing crucial insights into both the technical feasibility and public reception of government-­controlled digital currencies. Among these pilot nations are some of the world’s most influential economies, including China with its digital yuan, India’s digital rupee, Japan’s digital yen trials, Brazil’s digital real program, and the European Union’s digital euro development. These five economic powerhouses collectively represent a significant portion of global GDP and diverse monetary policy approaches, making their pilot experiences particularly revealing about the challenges and resistance patterns that emerge when central banks attempt to digitize national currencies. Their ongoing struggles with public adoption, privacy concerns, and competition from existing payment systems offer encouraging lessons about the gap between central banking ambitions and citizen acceptance of financial surveillance infrastructure.

China (Digital Yuan/e-­CNY): China’s e-­CNY pilot, launched in 2020 across multiple cities including Shenzhen, Suzhou, and Beijing, represents the world’s most extensive CBDC testing program, yet it faces persistent adoption challenges despite years of development. Despite more than three years of piloting, the government is still struggling to find compelling applications and adoption has been minimal, with users reluctant to switch from established platforms like Alipay and WeChat Pay even after promotional events in pilot regions. The slow adoption suggests that existing electronic payment systems can be a significant deterrent to CBDC uptake, while privacy concerns and fears that the Communist Party could use it for surveillance have created resistance both domestically and internationally. The Atlantic Council notes that while adoption has been low, the broad range of applications suggests that testing, rather than adoption, is the current priority. Public statistics confirm that the digital yuan remains unpopular, with anecdotal evidence suggesting most people continue using traditional payment methods.

India (Digital Rupee/e-­Rupee): India launched its digital rupee pilot in December 2022, targeting both wholesale and retail segments, but has encountered significant conceptual confusion and competitive challenges from existing payment systems. As of September 2024, the pilot operates with more than five million users across 16 participating banks, though the Reserve Bank of India emphasizes it is in “no rush” for full-­scale launch. Indians are grappling with fundamental questions about CBDCs, including distinguishing between wholesale and retail versions, and there is significant ambiguity around India’s public policy goals for the CBDC, with the pilot facing hurdles from UPI dominance and privacy concerns. Technical challenges include connectivity issues in rural India and interoperability problems with existing systems that the RBI must address. The International Monetary Fund has noted too many parallels between existing instant payment systems and CBDCs, which could restrict adoption of the new digital currency. The pilot’s measured approach reflects recognition that India’s already-­successful UPI system may make a CBDC redundant for many use cases.

Japan (Digital Yen Pilot): Japan’s central bank began CBDC experimentation in 2021 and has progressed through multiple phases of testing, though the Bank of Japan maintains a cautious approach toward full implementation. The pilot program has focused primarily on basic functionality testing, including issuance, distribution, and redemption of digital currency, with particular attention to offline payment capabilities and privacy features. While technical testing has progressed smoothly, Japanese officials have emphasized that any decision on actual issuance will depend heavily on public acceptance and clear demonstration of benefits over existing payment systems. The Bank of Japan has been particularly concerned about potential impacts on the banking system and has designed its pilot to minimize disintermediation risks. Recent phases have included limited private sector participation to test real-­world scenarios, though adoption metrics remain limited. The central bank has indicated that any full launch would require extensive collaboration with private financial institutions and robust legal frameworks.

Brazil (Digital Real Pilot): Brazil’s central bank launched its CBDC pilot program in 2023, focusing on both domestic payments and potential integration with existing payment infrastructure like PIX, the country’s highly successful instant payment system. The pilot has tested various use cases including offline payments, smart contracts for conditional payments, and integration with government social programs, though early results show limited adoption beyond testing participants. Brazilian officials have expressed particular interest in using CBDCs for targeted social spending and financial inclusion initiatives, especially in underbanked regions. However, the pilot has faced challenges competing with PIX, which already provides instant, free digital payments and has achieved massive adoption since its 2020 launch. Privacy advocates have raised concerns about the potential for enhanced government surveillance through the digital real, particularly given Brazil’s history of financial monitoring. The central bank has emphasized that any full rollout would maintain strong privacy protections, though technical specifications remain under development.

European Union (Digital Euro): The European Central Bank’s digital euro project entered its preparation phase in 2021, with the Governing Council set to decide by the end of 2025 whether to move to the next phase, though final issuance decisions await EU legislative framework adoption. The project faces numerous challenges including privacy concerns, the complexity of coordinating across 27 EU member states, a lack of compelling consumer use cases, and competition with existing digital payment solutions like cards and wallets. Testing has focused on technical architecture, privacy features, and potential limits on individual holdings to prevent bank disintermediation, with particular attention to offline functionality and cross-­border payments within the eurozone. While no technical barriers were identified during preliminary planning phases, the project must navigate complex political considerations as different member states have varying priorities and concerns about monetary sovereignty. The ECB has emphasized that the digital euro would complement, not replace, cash and existing payment methods, though critics worry about potential impacts on commercial banking and financial privacy across Europe’s diverse regulatory landscape.

A Global Pattern of Skepticism and Resistance

Across these five major economies piloting CBDCs, a consistent pattern of public resistance and reluctant adoption has emerged, suggesting widespread skepticism about transitioning from existing payment systems to government-­controlled digital currencies. In China, concerns about heightened surveillance by the government have compounded resistance to adoption, while users continue preferring established platforms like Alipay and WeChat Pay despite years of government promotion and incentives. India faces similar challenges as citizens question the necessity of a digital rupee when the highly successful UPI system already provides instant, free digital payments, with privacy advocates raising concerns about enhanced government monitoring capabilities. Japan’s cautious approach reflects public wariness about financial privacy and banking system disruption, while Brazil’s pilot struggles to demonstrate advantages over the popular PIX payment system, with civil society groups voicing surveillance concerns. In the European Union, the digital euro project confronts resistance from privacy advocates, concerns about banking disintermediation, and skepticism from member states worried about monetary sovereignty and surveillance capabilities. This collective resistance across diverse political and economic systems suggests that populations worldwide intuitively recognize the fundamental trade-­offs CBDCs represent: the surrender of financial privacy and autonomy in exchange for promised efficiencies that existing systems often already provide, creating a natural barrier to adoption that central banks have yet to overcome despite extensive technical development and promotional efforts.

Countries in CBDC “Development” Stage

Countries in the “development” stage have progressed beyond theoretical research to active CBDC system construction. According to the Atlantic Council’s CBDC tracker, approximately 20 nations are currently in this development stage, having made strategic decisions to move from research into tangible implementation efforts. This stage involves sophisticated technical architecture development, regulatory framework drafting, and preliminary system testing, distinguishing itself through concrete progress toward creating functional CBDC systems with clearly defined use cases for either retail consumer transactions or wholesale interbank settlements.

The development stage encompasses key technical and operational milestones demonstrating serious commitment to CBDC implementation. Countries actively design core system architectures using blockchain technology, centralized ledger systems, or hybrid models while crafting comprehensive regulatory frameworks addressing monetary policy integration, financial stability implications, and compliance requirements. Internal testing protocols evaluate system performance, security vulnerabilities, and operational efficiency before advancing to public pilot programs. Notable countries in this phase include Colombia, Mexico, Peru, and the United Kingdom, each approaching CBDC development with distinct national priorities and technical strategies.

The development stage introduces significant concerns regarding centralized infrastructures that fundamentally alter citizen-­government monetary relationships. As these countries design CBDC architectures, they embed capabilities for comprehensive transaction tracking, mandatory KYC requirements, and programmable money features enabling unprecedented government control over individual financial behavior. These technical design decisions create powerful surveillance mechanisms transcending traditional banking privacy protections, allowing governments to monitor, restrict, or reverse transactions in real-­time. This represents a fundamental shift from cash anonymity toward fully monitored digital monetary systems, raising concerns about CBDCs as tools for expanding government authority over personal economic autonomy.

Countries in CBDC “Research” Stage

Countries in the “research” stage represent the foundational tier of global CBDC exploration, encompassing approximately 36 nations conducting preliminary investigations into the feasibility, implications, and potential frameworks for CBDCs. These countries – including major economies and emerging markets like Argentina, Canada, Egypt, Kenya, and Pakistan – are engaged in comprehensive theoretical work spanning economic impact assessments, policy analysis, and stakeholder consultations. The research stage typically involves commissioning detailed studies on CBDC benefits such as enhanced financial inclusion, improved monetary policy transmission, and payment system efficiency, while simultaneously examining potential risks including banking sector disruption, cybersecurity vulnerabilities, and macroeconomic stability concerns. 

The research stage encompasses broad analytical activities designed to establish whether CBDC implementation aligns with national economic and regulatory objectives. Central banks conduct feasibility studies examining technical architecture options from blockchain-­based distributed ledger systems to centralized database approaches, while evaluating operational complexities of integrating digital currencies with existing financial infrastructure. This process involves establishing policy objectives and success measures while identifying and quantifying risks, creating comprehensive decision-­making frameworks. Economic impact assessments analyze potential effects on monetary policy effectiveness, banking sector stability, and payment system competition, while regulatory reviews examine necessary legal frameworks, consumer protection measures, and anti-­money laundering compliance requirements.

The diversity of countries reflects varying motivations across different economic contexts. Developed economies like Canada focus on maintaining monetary sovereignty and payment system resilience, while emerging markets pursue CBDCs for enhancing financial inclusion, reducing correspondent banking reliance, and addressing currency stability challenges.

However, even this preliminary phase establishes foundational surveillance infrastructure elements. The research process requires central banks to engage with digital platforms, establish technology partnerships, and collect extensive data on payment patterns and consumer behavior. Central banks necessarily examine transaction tracking capabilities, identity verification requirements, and programmable money features – research that normalizes surveillance mechanisms within monetary policy frameworks, creating pathways toward financial privacy erosion before any CBDC system becomes operational. 

Countries in CBDC “Inactive” or “Canceled” Stage

As global CBDC momentum accelerates with 137 countries and currency unions exploring digital currency initiatives, a critical but overlooked category emerges: nations that have abandoned, canceled, or allowed their CBDC programs to become inactive. Countries including Belize, Ecuador, Uganda, Vietnam, and Zambia have either implemented CBDCs that failed and were abandoned or explored digital currencies before canceling them, providing crucial insights into the practical challenges and inherent risks of centralized digital currency systems. 

The “inactive” classification encompasses countries that previously engaged in substantive CBDC exploration – including research, development, or pilot testing – but have ceased all activities without formal cancellation announcements. This dormant status typically results from shifting governmental priorities, insufficient resources, insurmountable technical challenges, or political changes redirecting focus away from digital currency implementation. Twenty-­one countries are listed in the inactive stage, including Denmark, Iceland, Kuwait, Venezuela, and North Korea. 

The “canceled” stage represents decisive rejection of CBDC implementation, where countries formally discontinued efforts following assessments revealing unacceptable risks or obstacles. Ecuador and Senegal have officially canceled programs, demonstrating explicit policy decisions to terminate development after initial exploration. These cancellations frequently stem from banking sector disruption concerns, cybersecurity vulnerabilities, regulatory complexities, or privacy and financial autonomy concerns. Ecuador exemplifies this dynamic, where central bank refusal to support digital money has created significant skepticism among government and banking officials. The inactive designation reveals the volatile nature of centralized digital currency adoption, where political and economic pressures can rapidly transform ambitious CBDC programs into abandoned initiatives.  

From a surveillance perspective, both inactive and canceled programs present ongoing risks transcending apparent abandonment. Foundational infrastructure developed during active phases often remains embedded within central banking systems, leaving behind intelligence-­gathering capabilities, technological partnerships, and monitoring protocols that create persistent privacy vulnerabilities. These dormant surveillance infrastructures could be reactivated under different political circumstances, meaning canceled programs may represent temporary setbacks rather than permanent rejections of centralized monetary control. 

Countries With CBDC Status of “Other”

The “other” classification within the Atlantic Council’s CBDC Tracker encompasses countries and jurisdictions whose digital currency activities resist conventional categorization, representing a complex landscape of ambiguous, transitional, or uniquely structured CBDC engagements that fall outside standard research, development, pilot, or launch phases. This category includes nations participating in innovative cross-­border initiatives such as Project mBridge, which involves the Hong Kong Monetary Authority, the Bank of Thailand, the Central Bank of the United Arab Emirates, the Saudi Central Bank, and the Digital Currency Research Institute, with the IMF and more than 19 central bank observers. Similarly, the U.S. presents a unique case where President Trump issued an executive order to halt all work on a retail CBDC while continuing to engage in wholesale cross-­border payments research through Project Agorá in collaboration with six other major central banks.

Countries classified as other frequently represent exploratory or informal activities where governments have expressed interest in CBDCs without establishing formal programs, engaging instead in preliminary discussions, public consultations, or private sector collaborations that lack clear research or development frameworks. This category also encompasses jurisdictions with paused or undefined efforts that have initiated CBDC-­related activities but suspended them without official cancellation, creating ambiguous status due to lack of public updates or transparent communication about future intentions. Some countries participate in hybrid or non-­standard initiatives that blend CBDC exploration with other digital currency projects, such as stablecoin partnerships or blockchain experiments, that do not align strictly with traditional central bank issuance models.

From a surveillance perspective, the other classification represents perhaps the most insidious category, as it masks countries’ digital currency involvement while potentially facilitating covert surveillance infrastructure development. The ambiguous nature provides governments with plausible deniability regarding CBDC intentions while enabling participation in data collection, technology partnerships, and cross-­border monitoring systems through seemingly benign collaborative projects, advancing financial privacy erosion through incremental and largely invisible means.

Conclusion

CBDCs stand as a profound threat to the fabric of free societies, weaving together unprecedented surveillance, programmable control, and the erosion of personal autonomy under the guise of modern convenience. Throughout this examination, the evidence has mounted: from the granular tracking embedded in systems like China’s e-­CNY, where tiered accounts demand identity verification and create permanent records of daily life, to the programmable features in India’s digital rupee trials that enforce expiration dates and spending restrictions. These are not abstract perils but concrete mechanisms that central banks are actively building, enabling governments to monitor every transaction, infer personal details, and dictate economic behavior. The panopticon analogy holds firm – citizens, aware of constant oversight yet uncertain of when they are targeted, would self-­censor their choices, avoiding donations to dissenting causes or purchases that might draw scrutiny. This chilling effect, as documented in analyses of existing financial surveillance, stifles dissent, journalism, and vulnerable communities, transforming money from a tool of individual empowerment into an instrument of state dominance.

The global landscape underscores the urgency of resistance. As of August 2025, 137 countries and currency unions, encompassing 98 percent of global GDP, are pursuing CBDCs in various stages – from full launches in the Bahamas, Jamaica, and Nigeria to pilots in economic giants like China, India, Japan, Brazil, and the European Union. In these pilots, the promised efficiencies falter against the reality of surveillance infrastructures that link transactions to identities, cross-­reference with government databases, and enable geofencing or negative interest rates to coerce behavior. Even in development and research stages, nations like Colombia, Mexico, Peru, the United Kingdom, Argentina, Canada, Egypt, Kenya, and Pakistan are laying groundwork for similar controls, normalizing data collection that could be weaponized against citizens. Inactive or canceled programs in places like Belize, Ecuador, Uganda, Vietnam, and Zambia offer false comfort; the surveillance capabilities developed often linger, ready for reactivation under shifting political winds.

Yet amid this tide, the U.S. emerges as a critical outlier, having formally prohibited retail CBDC development through Executive Order 14178 in January 2025, which halted all related work to safeguard privacy and prevent overreach. This executive action, reinforced by the House-­passed Anti-­CBDC Surveillance State Act (H.R. 1919) awaiting Senate consideration as of August 2025, positions America as the sole nation to outright ban such currencies, while permitting limited wholesale research in projects like Agorá for interbank efficiency. This stance is no accident but a deliberate rejection of the dangers that have materialized elsewhere – the loss of cash-­like anonymity, the politicization of payments, and the fusion of economic policy with repression, as seen in the Canadian trucker protests where financial freezing foreshadowed CBDC-­enabled suppression. By preserving decentralized alternatives like cryptocurrencies, which offer pseudonymity and censorship resistance through permissionless networks, the U.S. upholds a model where innovation serves individuals, not states.

The false narratives peddled by proponents – financial inclusion, efficiency, crime reduction, and innovation – crumble under scrutiny. Inclusion rings hollow when CBDCs demand digital access that excludes the underserved, efficiency masks surveillance burdens that create single points of failure, anti-­crime rhetoric justifies treating all as suspects, and innovation stifles private-­sector creativity in favor of top-­down stagnation. These are not solutions but pretexts for control, echoing historical abuses where financial levers silenced opposition. In authoritarian regimes, CBDCs already amplify social credit systems and transaction penalties; in democracies, they risk the same slide, integrating with health mandates or environmental nudges to engineer society from the wallet. 

Citizens must recognize this Trojan horse for what it is: a gateway to a cashless dystopia where governments hold absolute sway over economic life, freezing funds, restricting mobility, and punishing non-­conformity with a keystroke. The line between policy and repression vanishes, turning free markets into command economies at the micro level. Resistance is not optional but imperative – through advocacy, legislation, and support for privacy-­preserving alternatives like cash and decentralized crypto such as Bitcoin. The window to act is narrowing as global adoption accelerates. History teaches that power unchecked corrupts absolutely. When it comes to money, that corruption is total, irrevocable, and devastating to personal freedom.   

 

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