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CBDC
Ownership • Legacy • Access Control • Sovereignty
state-issued digital currency
CBDC (Central Bank Digital Currency) is a digital form of national fiat currency issued and controlled directly by a country’s central bank. Unlike decentralized cryptocurrencies, CBDCs are centralized, programmable, and tied to official monetary policy.
Use Case: CBDCs enable central banks to directly manage monetary policy tools like stimulus, taxation, and capital controls — all with programmable, trackable digital money.
Key Concepts:
- Centralized Ledger — Operated under full control of national monetary authorities
- Programmable Money — Enables rules-based spending, expiration dates, or usage limits
- Surveillance Finance — Every transaction can be tracked, recorded, and analyzed
- Monetary Policy Tool — Supports modern enforcement of economic levers like UBI or negative rates
- Stablecoins — Private sector alternative to CBDCs with varying decentralization
- $RLUSD — Regulated stablecoin example operating alongside potential CBDCs
- Financial Sovereignty — Individual control that CBDCs may limit
- $BTC — Decentralized counterforce to centralized digital currencies
- Decentralization — Property absent from CBDC design by intention
- Censorship Resistance — Protection CBDCs explicitly do not provide
- Self-Custody — May be limited or eliminated under CBDC systems
- KYC — Identity verification likely mandatory for CBDC usage
Summary: CBDCs are the digital evolution of fiat currency — offering speed and efficiency at the cost of financial privacy. They reflect a shift toward centralized digital control over money and may reshape the global economy alongside decentralized counterforces.
CBDC vs Decentralized Alternatives
the fundamental philosophical divide
CBDC Model
• State-controlled issuance
• Full transaction surveillance
• Programmable restrictions
• KYC mandatory
• Account freezing capability
• Centralized monetary policy
• State-controlled issuance
• Full transaction surveillance
• Programmable restrictions
• KYC mandatory
• Account freezing capability
• Centralized monetary policy
Decentralized Model (BTC)
• No central issuer
• Pseudonymous transactions
• No spending restrictions
• Permissionless access
• Censorship resistant
• Fixed supply, no manipulation
• No central issuer
• Pseudonymous transactions
• No spending restrictions
• Permissionless access
• Censorship resistant
• Fixed supply, no manipulation
The Core Tension: CBDCs offer government efficiency and control. Decentralized crypto offers individual sovereignty and privacy. These are fundamentally incompatible visions for the future of money—one where the state controls financial flows, another where individuals do.
Programmable Money Risks
what “programmable” actually means
Potential Restrictions
• Expiration dates on money
• Geographic spending limits
• Category purchase blocks
• Social credit integration
• Carbon footprint tracking
• Political donation limits
• Expiration dates on money
• Geographic spending limits
• Category purchase blocks
• Social credit integration
• Carbon footprint tracking
• Political donation limits
Control Mechanisms
• Instant account freezing
• Negative interest rates
• Forced spending deadlines
• Transaction velocity limits
• Merchant category codes
• Real-time tax deduction
• Instant account freezing
• Negative interest rates
• Forced spending deadlines
• Transaction velocity limits
• Merchant category codes
• Real-time tax deduction
Already Proposed/Tested
• China: Digital yuan with expiry
• Nigeria: eNaira with limits
• EU: Digital euro discussions
• US: FedNow infrastructure
• Bahamas: Sand Dollar live
• Multiple pilots globally
• China: Digital yuan with expiry
• Nigeria: eNaira with limits
• EU: Digital euro discussions
• US: FedNow infrastructure
• Bahamas: Sand Dollar live
• Multiple pilots globally
Stated Benefits
• Targeted stimulus delivery
• Fraud reduction
• Tax compliance
• Financial inclusion
• Faster settlement
• Reduced cash costs
• Targeted stimulus delivery
• Fraud reduction
• Tax compliance
• Financial inclusion
• Faster settlement
• Reduced cash costs
The Question: “Programmable money” sounds neutral, but who writes the program? Every feature that makes CBDCs “efficient” for governments makes them restrictive for individuals. The same technology that enables instant stimulus can enable instant freezing.
Global CBDC Development
where nations stand on digital currencies
Global Trend: 130+ countries representing 98% of global GDP are exploring CBDCs. The question is no longer “if” but “when” and “how.” The design choices made now will determine whether CBDCs become tools of financial inclusion or surveillance.
Protecting Financial Sovereignty
hedges against centralized digital control
Decentralized Alternatives
• Bitcoin — censorship-resistant store of value
• Privacy coins — enhanced transaction privacy
• DEXs — permissionless trading
• Self-custody — your keys, your coins
• P2P trading — avoid KYC rails
• Multi-jurisdictional diversification
• Bitcoin — censorship-resistant store of value
• Privacy coins — enhanced transaction privacy
• DEXs — permissionless trading
• Self-custody — your keys, your coins
• P2P trading — avoid KYC rails
• Multi-jurisdictional diversification
Hard Asset Hedges
• Physical gold/silver
• Tokenized metals ($KAG, $KAU)
• Real estate
• Commodity exposure
• Geographic diversification
• Non-digital value stores
• Physical gold/silver
• Tokenized metals ($KAG, $KAU)
• Real estate
• Commodity exposure
• Geographic diversification
• Non-digital value stores
Privacy Practices
• Minimize KYC exposure
• Use privacy-preserving tools
• Separate identities from holdings
• Understand chain analysis
• Support privacy development
• Advocate for financial privacy
• Minimize KYC exposure
• Use privacy-preserving tools
• Separate identities from holdings
• Understand chain analysis
• Support privacy development
• Advocate for financial privacy
Long-Term Strategy
• Diversify across systems
• Maintain CBDC access (necessity)
• Keep decentralized holdings
• Preserve self-custody capability
• Stay informed on regulations
• Support decentralized alternatives
• Diversify across systems
• Maintain CBDC access (necessity)
• Keep decentralized holdings
• Preserve self-custody capability
• Stay informed on regulations
• Support decentralized alternatives
CBDC Checklist
understanding state-issued digital currency
Core Understanding
☐ Know CBDC = centralized digital fiat
☐ Understand programmable money
☐ Know surveillance implications
☐ Understand monetary policy tools
☐ Compare to stablecoins
☐ Know $RLUSD as alternative
☐ Know CBDC = centralized digital fiat
☐ Understand programmable money
☐ Know surveillance implications
☐ Understand monetary policy tools
☐ Compare to stablecoins
☐ Know $RLUSD as alternative
Sovereignty Awareness
☐ Understand financial sovereignty
☐ Know $BTC as counterforce
☐ Understand decentralization value
☐ Know censorship resistance
☐ Understand self-custody importance
☐ Know KYC implications
☐ Understand financial sovereignty
☐ Know $BTC as counterforce
☐ Understand decentralization value
☐ Know censorship resistance
☐ Understand self-custody importance
☐ Know KYC implications
Risk Assessment
☐ Evaluate privacy trade-offs
☐ Understand freezing capability
☐ Know programmable restrictions
☐ Assess surveillance scope
☐ Consider political risks
☐ Evaluate jurisdictional factors
☐ Evaluate privacy trade-offs
☐ Understand freezing capability
☐ Know programmable restrictions
☐ Assess surveillance scope
☐ Consider political risks
☐ Evaluate jurisdictional factors
Strategic Positioning
☐ Maintain decentralized holdings
☐ Diversify across systems
☐ Preserve self-custody options
☐ Stay informed on developments
☐ Support privacy alternatives
☐ Plan for multiple scenarios
☐ Maintain decentralized holdings
☐ Diversify across systems
☐ Preserve self-custody options
☐ Stay informed on developments
☐ Support privacy alternatives
☐ Plan for multiple scenarios
The Principle: CBDCs represent the most significant potential shift in monetary control since the creation of central banks. They’re not inherently evil—they’re tools, and tools can be used well or poorly. But the architecture being built enables unprecedented financial surveillance and control. Regardless of your political views, maintaining alternatives to state-controlled money is prudent. The coexistence of CBDCs and decentralized crypto will define the financial landscape for generations.