Expiry dates and restrictions on “less desirable” purchases are some of the key advantages behind central bank digital currencies (CBDCs), according to an economist at a World Economic Forum (WEF) event.
The WEF hosted the 14th annual Meeting of the New Champions in Tianjin, China, also known as Summer Davos. During one of the 30-minute panel discussions on June 28, Cornell University professor Eswar Prasad explained that the global economy is “at the cusp of physical currency essentially disappearing” and that programmable CBDCs and the technology behind these new forms of money could take the international economic landscape toward a dark path or a better place.
Prasad contended that one of the “huge potential gains” for the digitization of money is the programmability of CBDC units and attaching expiry dates. Governments can also utilize central bank money to socially engineer society.
“You could have … a potentially better—or some people might say a darker world—where the government decides that units of central bank money can be used to purchase some things, but not other things that it deems less desirable like, say ammunition, or drugs, or pornography, or something of the sort,” he said. “And that is very powerful in terms of the use of a CBDC, and I think also extremely dangerous to central banks.”
The author of “Gaining Currency” and “The Dollar Trap” purported that CBDCs possess unique characteristics and could be employed “as a conduit for economic policies in a very targeted way, or more broadly for social policies.”