How CBDCs Could Decide What You Can and Cannot Buy

• Money’s value is built on mutual trust rather than intrinsic worth.
• Central Bank Digital Currencies (CBDCs) promise efficiency and financial inclusion, but risk eroding personal financial freedom through centralization and programmability.
• CBDCs create a single point of control by replacing physical cash, exposing entire economies to new systemic risks, including outages and cyberattacks.
• CBDCs will drive crypto adoption, as people seek decentralized alternatives to escape government-controlled, programmable money.

Money has no real value. It never did. People once traded seashells, stones, and beads, believing they held worth. Salt was currency. So was cattle. Gold and silver lasted longer, but their value was just another agreement—shiny metals that people trusted enough to exchange for goods.

For much of the 19th and early 20th centuries, paper money was tied to gold, which limited the amount of currency that could exist and ensured that every banknote represented a claim on a tangible asset.

The first cracks appeared during the Great Depression. In 1931, the United Kingdom, Germany, and Austria abandoned the gold standard, with France and Switzerland following in the mid-1930s.

In 1933, U.S. President Franklin D. Roosevelt issued Executive Order 6102. The order banned private ownership of gold and forced citizens to surrender their holdings to the Treasury. Domestic convertibility ended. The dollar no longer functioned as a claim on gold for American citizens.

World War II further reshaped the system, culminating in the Bretton Woods Agreement of 1944, which pegged global currencies to the U.S. dollar while maintaining the dollar’s tie to gold.

That final link shattered in 1971 when the United States, under President Nixon, ended gold convertibility for foreign governments. This effectively dismantled the international gold standard and severed the last global anchor of real monetary value.

From that moment, money became an abstraction—numbers on a screen controlled by central banks, backed only by trust that it would still buy something tomorrow. This also marked the beginning of floating exchange rates, where currency values were no longer fixed but allowed to rise and fall relative to one another.

Governments could print as much as they wanted, manipulating economies with a keystroke. Inflation ate and still eats away at purchasing power, but people still use money because there is no alternative. The moment money stopped being tied to something real, it became a system of faith.

The shift to digital made it even less real. With each passing year, the use of cash for everyday transactions continues to decline. A salary arrives as digits on a screen. A card tap pays for coffee. Apple or Google Pay covers an online shopping spree. Venmo settles a debt with a friend. It’s easier, faster, and cleaner.

In 2023, only 2% of all e-commerce payments worldwide were made in cash. Even in physical stores, cash usage represented only 16% of payments.

With digital payments already dominant, Central Bank Digital Currencies (CBDCs) might seem like a natural progression. On the surface, they don’t appear radically different. But the key issue isn’t the shift from physical to digital; it’s about who has control over the money and how it’s used.

Today, banks use automated tools to detect financial crimes, but they do not monitor or approve every transaction in real time. For example, buying groceries, paying rent, or sending money to a friend usually stays private between you and your bank, unless something triggers a legal reporting threshold, like a suspicious overseas transfer or a large cash deposit. Banks only flag and report activity to authorities if illegal behavior is suspected, such as fraud, money laundering, or tax evasion

Governments can freeze accounts or impose sanctions, but they cannot pre-program how money is spent. Even if a bank account is locked, cash still exists. A friend can lend a card. There are alternatives, ways to move outside the formal system. CBDCs eliminate those options. There is no escape hatch, no other path, just a single, centralized network where every transaction could be subject to approval.

A world of programmable money means a world where transactions come with built-in conditions. Perhaps savings might lose value unless spent on “approved” purchases. Funds could even expire if not used by a set deadline.

Wages could arrive with conditions: no spending outside designated zones, no purchases from unapproved vendors, no buying imported goods deemed unnecessary or harmful to the local economy. Even a simple grocery run could mean choosing between state-approved products or nothing at all.

The “best” part is that the system does not need to ban anything outright. It would simply make undesired choices impossible.

As Matthew Niemerg, co-founder of the blockchain-ecosystem project Aleph Zero, warns, “CBDCs are a risk to financial freedom. Any nation-state currency is subject to the political whims of a nation and appointed bureaucrats.”

He questions the rationale behind CBDCs, noting that with highly regulated stablecoins already available, “nothing justifies the need for CBDCs other than the desire for control of monetary policy by central banks and nation-states.”

This issue of CCN Reports will examine CBDCs in detail, what they claim to offer, what they truly enable, and what they quietly take away. The report will break down how CBDCs work, explore their potential benefits, and highlight the risks that come with handing governments and central banks absolute power over money.

As we move closer to a completely cashless society, the question is no longer whether the digital currency will dominate but rather who will control it and at what cost.

What CBDCs Are and How They Work

Central Bank Money

Understanding CBDCs begins with a clear definition of what “central bank money” really is. Many people don’t realize that the balance in their checking account, commercial bank deposits, is not actually central bank money (and not legal tender in the strict sense). In modern economies, there are two distinct types of money circulating side by side: central bank money and commercial bank money.

Central bank money is money issued and backed by a nation’s central bank. It exists in two forms: physical cash (banknotes and coins) and electronic reserves held by commercial banks in accounts at the central bank. Only the central bank can create this money (for example, by issuing banknotes or crediting reserves to banks), and in general use, it is considered legal tender; everyone is obligated to accept cash for payments by law.

Central bank money is virtually risk-free for the holder, since it’s the liability of the central bank, which can always honor it, barring a collapse of the currency’s value.

For instance, in the United States, the only central bank money today is Federal Reserve-issued dollars (Federal Reserve notes as cash, and deposit balances that banks hold at the Fed). Similar arrangements are held in other regions (e.g., euro banknotes and commercial banks’ deposits at the European Central Bank in the Eurozone, or Bank of England notes and reserve accounts in the UK). Commercial banks use these central bank reserves behind the scenes to settle payments with each other and maintain liquidity in the financial system.

Whenever you swipe your debit card or send a bank transfer, your bank ultimately transfers central bank reserves to the recipient’s bank to settle that transaction. If you withdraw cash from your account, the bank’s reserve balance at the central bank decreases when you receive central bank money in hand.

Commercial bank money refers to the digital deposits that we all hold in our private bank accounts (the balances shown in your online banking app). These deposits are liabilities of commercial banks, not the central bank.

In effect, they are promises by your bank to pay you central bank money (cash or reserves) on demand. Commercial bank money is created by banks, most commonly when they issue loans. A bank loan results in a credit to the borrower’s account, expanding the bank’s balance sheet and essentially creating a deposit out of thin air. Unlike central bank money, deposits are not legal tender by law. No one is legally required to accept your IOU from Bank X as payment.

However, because deposits can be converted one-for-one into cash or used for electronic payments that are ultimately settled in central bank money, the public treats them as if they were money. There is a small credit risk with commercial bank money; if a bank fails, your access to that money depends on deposit insurance and the bank’s solvency.

Normally, this risk is minimal and hidden from view, so people use bank deposits interchangeably with cash for convenience. In fact, the vast majority of money in circulation is commercial bank money, not cash.

Central Bank Digital Currency

A central bank digital currency is exactly what it sounds like—money issued directly by a central bank in digital form. They are legal tender, just like physical cash, but exist only electronically. Unlike Bitcoin (BTC) or Ethereum (ETH), which operate on decentralized principles, CBDCs are centrally controlled by a nation’s central bank, which retains full authority over their issuance, distribution, and use.

CBDCs can be classified along several dimensions:

Target Users

• Retail: For everyday consumers and day-to-day transactions, similar to cash.
• Wholesale: For financial institutions and interbank settlements (large-scale transfers).
• Hybrid: Supporting both individual and institutional transactions.

Distribution Model

• Direct: The central bank issues the CBDC directly to the public and ensures complete oversight of every transaction.
• Two-tier or Indirect: Intermediaries, such as commercial banks or payment interface providers (PIPs), distribute the CBDC while the central bank manages the underlying reserves.
• Synthetic: Private entities issue digital tokens backed by central bank reserves. Although intermediaries manage day-to-day operations, the central bank sets the regulatory framework and maintains overall control through reserve backing.
• Hybrid: A combination of the direct and indirect models. The central bank retains full control over the core infrastructure, particularly the settlement layer and ledger, ensuring that all transactions ultimately settle in central bank money. Meanwhile, intermediaries, such as commercial banks, PIPs, or fintechs, handle user-facing roles like customer onboarding, KYC/AML compliance, wallet provision, and transaction initiation.

Infrastructure

• DLT-Based: Utilizes distributed ledger technology (DLT) and cryptography.
• Non-Blockchain-Based: Operates on conventional centralized banking infrastructure.
• Hybrid: Incorporates elements of both blockchain (for security) and traditional systems (centralized for settlement speed).

Geographic Scope

• Domestic: Limited for use within the issuing country’s borders.
• Cross-Border or multi-CBDC (mCBDC): Designed to facilitate international transactions, thus making global trade and remittances easier (e.g., Project mBridge, Project Jura).
• Hybrid: Supports both domestic and international transactions.

Online/Offline Capability:

• Online-Only: Requires internet connectivity for every transaction, similar to current digital payment systems.
• Offline-Capable: Capable of processing transactions without an active internet connection. However, this approach introduces risks of double-spending and challenges around maintaining cryptographic security in the absence of real-time validation.

Programmability

• Programmable: Embeds predefined rules into the digital currency, allowing authorities to set conditions on how funds can be spent, for example, restricting purchases to certain categories. Nonetheless, programmability remains experimental and highly policy-sensitive. The Bank for International Settlements (BIS) has cautioned that over-programming retail CBDCs could erode public trust and hinder adoption, as users may reject money that feels too controlled or conditional.
• Non-Programmable: Functions like traditional cash with no built-in restrictions on spending.

Countries That Have Implemented or Started Developing CBDCs

CBDCs are no longer theoretical: Most countries have already begun researching, testing, or piloting them in some form. Whether through proof-of-concept studies, limited trials, or full-scale implementation, governments worldwide are already laying the groundwork for digital national currencies.

In 1993, the Bank of Finland launched the Avant smart card, an electronic form of cash. Although the system was eventually dropped in the early 2000s, it can be considered the world’s first CBDC.

Only four countries have fully launched a CBDC so far:

• Jamaica – JAM-DEX (2023)
• Bahamas – Sand Dollar (2017)
• Zimbabwe – ZiG (2021)
• Nigeria – e-Naira (2021)

However, not all nations are moving forward: the USA, Kenya, and Ecuador remain the only countries to have abandoned their CBDC plans entirely.

According to a June 2, 2023, press release by the Central Bank of Kenya (CBK) , the country abandoned its CBDC project, citing declining global interest, challenges faced by early adopters, and concerns over technology and innovation risks. The CBK emphasized that existing payment solutions can sufficiently address Kenya’s financial needs in the short to medium term while continuing to monitor CBDC developments for future assessments.

In contrast to Kenya, which halted its CBDC plans before launch, Ecuador actually implemented one—and failed. The Central Bank of Ecuador (BCE) launched the country’s digital currency, Dinero Electrónico (DE), in 2014, making it the world’s first-ever central bank electronic money system. The goal was to serve the unbanked population by providing mobile phone–based U.S. dollar accounts. However, the project was officially shut down in 2018 due to low adoption and a lack of public trust. By 2017, only about $11 million USD equivalent was in circulation (less than 0.1% of Ecuador’s money supply), and 71% of the 400,000 accounts opened were never even used.

There are also other countries that have canceled their CBDC projects, including:

• Finland – Avant (1992)
• Denmark – E-Kroner (2017)
• Curaçao – Curacao CBDC (2018)
• Singapore – Project Orchid (2021)
• Philippines – Philippines CBDC (2021)
• USA – Digital Dollar (2025)

However, apart from the USA, none of them abandoned CBDCs altogether. Since then, they have begun new CBDC projects, restarting research, pilots, or proof-of-concept studies to explore different models and technologies.

In addition, South Korea recently paused its retail CBDC pilot, known as the “Hangang Project,” in late June 2025. The Bank of Korea halted the second phase of the initiative, which had involved around 100,000 users and several major banks, citing:

• High development costs and unclear commercial viability.
• A political shift favoring won-pegged stablecoins, supported by President Lee Jae-myung’s administration.
• Plans to reassess how a CBDC would coexist with private-sector stablecoins and bank-issued deposit tokens.

In response, multiple Korean banks (e.g., KB Kookmin, Shinhan) are now developing their own stablecoins, and the central bank will revisit the CBDC plan in 2026 after evaluating regulatory changes and the emerging private stablecoin sector.

China’s Digital Yuan: A State-Controlled Currency in Action

China has already introduced a central bank digital currency (CBDC) known as the digital yuan (e-CNY), which is actively used in pilot programs nationwide.

As of 2024, the e-CNY was being tested in 26 cities and accepted at major stores and online platforms, with over 180 million individual wallets created and about ¥7.3 trillion (over $1 trillion) transacted in these trials. By early 2025, usage had expanded further to 260–261 million users and 29 cities . While these numbers look impressive, much of this adoption has been driven by government promotions rather than genuine public demand.

In the early pilot phases, local authorities organized large-scale giveaways and digital “red envelope” lotteries, handing out millions in free digital yuan to encourage people to open wallets and try the new system. E-commerce apps and food delivery platforms also offered special discounts and coupons if customers chose to pay with e-CNY instead of using Alipay or WeChat Pay. As a result, wallet numbers and transaction volumes spiked early on, but genuine daily use never took hold at the same pace once the freebies dried up.

In reality, China’s two dominant payment super-apps, WeChat Pay and Alipay, already handle nearly every digital transaction for over 900 million Chinese consumers. They’re deeply embedded in daily life. Almost every activity: ordering food, paying rent, booking travel, or even accessing public services, flows through super-apps like WeChat or Alipay.​ These apps are so entrenched that “leaving WeChat means leaving [social] life in China. ”

Compared to this, the e-CNY’s user base, while large on paper, represents only a fraction of the population, and many wallets sit idle with near-zero balances . Not to mention that once the initial novelty or promotion ends, most users simply return to the trusted platforms they know .

Also, the convenience of using WeChat Pay and Alipay comes at a price: it gives authorities a real-time window into people’s lives. Every payment you make and every message you send can be recorded and reviewed by government censors. Say the wrong thing even in a private chat, and you might get a knock on the door. One man was arrested after telling a joke about a government official in a group chat.

Over the years, Beijing has also built a “social credit” framework that uses digital records of behavior, from spending habits to online speech, to reward or punish citizens. Those deemed untrustworthy can be blacklisted from services, barred from travel, or even publicly shamed through apps. For instance, WeChat once introduced a feature nicknamed the “Deadbeat Map ” that alerted users to any debtors in their vicinity, effectively encouraging people to ostracize individuals with low credit scores​

The reliance on a single digital pipeline for almost all aspects of life carries huge risks. In November 2021, a regulatory update to WeChat Pay disrupted payment access for some users, particularly expatriates in China. Stricter identity verification requirements locked many out of their accounts, which prevented them from making payments for daily needs like food and transportation. The disruption lasted anywhere from a few hours to several days, depending on how quickly users could re-verify their identities with Chinese bank details.

China’s heavy reliance on digital payments left those affected with limited options. Although Alipay was an alternative, not everyone had it set up, and cash is rarely accepted in urban areas.

Why Governments Are Pushing CBDCs

First of all, CBDCs do bring certain benefits as they actually solve some inefficiencies in the current financial system. Faster, cheaper transactions. No need for intermediaries like commercial banks or payment processors to take their cut. Reduced costs for governments, as there’s no longer a need to print, transport, and secure physical money.

For policymakers, the argument is simple: CBDCs streamline money itself. Although, one of the biggest selling points is financial inclusion, along with reducing cash use, enabling faster cross-border payments, strengthening monetary policy tools, and improving transparency.

In many parts of the world, people own smartphones but not bank accounts. It sounds strange at first. A bank account seems like a basic need, yet for billions, it remains out of reach.

According to the World Bank Group, 17% of the global adult population , roughly 1.4 billion people, were unbanked as of 2025. Opening one requires paperwork, proof of income, and a permanent address, things many people simply don’t have.

For example, only 48% of Americans have a passport . In the UK, 11 million people do not have a passport or a driving license. The same issue persists in other countries, too.

In 2024, the DevelopmentAid reported that 330 million people were homeless worldwide. Without an address, opening a bank account is impossible.

Then there’s the issue of employment: According to the ILO’s 2023 report, 58% of the world’s workers , around 2 billion people, are employed informally.

Not to mention that about 5.1% of the worldwide population was unemployed in the same year, which is around 480 million.

A smartphone, on the other hand, asks for nothing. No documents, no salary history, no in-person visits. It works anywhere mobile data coverage exists. That’s why farmers in Kenya or street vendors in India might not have bank accounts, but they do have smartphones. Still, about one-third of the global population, or 2.6 billion people, remained offline in 2023 . While over 90% of people in high-income countries used the internet in 2022, only one in four in low-income countries did. For those who can access it, a smartphone connects them to the world.

Proponents argue that CBDCs can bridge this gap. A digital currency issued by the central bank could reach the unbanked without requiring traditional banking infrastructure. For the 2 billion people locked out of the financial system as of 2024, that sounds like a solution.

As noted by Pictet Asset Management,

“Through the CBDC mechanism, Central Banks can offer families, individuals, and companies new methods of investing and paying or managing their assets, thus encouraging digital transactions even without the obligation to have a bank account. In essence, they could be a key card to open access to international financial systems for many more people around the world.”

They also point out that CBDCs, being equivalent to national currencies and guaranteed by governments, promise safety. However, they caution:

“The potential downside of this instrument concerns the link with the currency of the issuing country: if inflation increases, the linked CBDC also loses the same value… Another barrier to using these digital currencies could be the need to have a digital wallet with the related digital security systems, especially for older investors who are less inclined to use the web.”

Unlike cash, which can be used anonymously, CBDCs can also create a fully traceable record of all transactions. This can help combat money laundering, drug trafficking, terrorism financing, and tax evasion. Financial crimes become harder to commit when every payment leaves a permanent digital footprint. With CBDCs, authorities wouldn’t need to rely on intermediaries to flag suspicious activity because monitoring would happen in real time.

Beyond crime prevention, CBDCs can fine-tune economic stability. Traditional tools like interest rates and money supply take time to influence the economy. They depend on commercial banks passing changes along to consumers and businesses reacting as expected, which often happens slowly or unevenly.

Central banks adjust rates, inject liquidity, or pull it back, but these mechanisms rely on banks, businesses, and consumers reacting in unpredictable ways. A CBDC, by contrast, could enable more direct, programmable monetary policy. For example, central banks could inject stimulus funds instantly into wallets or apply negative interest rates on idle balances to encourage spending. They could also deliver targeted benefits to specific groups or regions during economic downturns, all without relying on intermediary banks or delayed market responses.

The Fine Print of a CBDC-Based Financial System

The concerning part of CBDCs is their programmability. The appeal of power that this provides is undeniable. Governments can attach conditions to every unit of currency, deciding not just how much you can spend but where, when, and on what.

Orwell’s 1984 showed a world where the government controlled every aspect of life, including money. Rationing ensured that people remained dependent on the Party. Money existed, but it had no real use without permission. Winston, the protagonist, could only buy what the system allowed. There was no autonomy, no financial freedom—only compliance.

“Nothing was your own except the few cubic centimeters inside your skull.”

The UK has already shown a glimpse of what this level of control looks like. In 2024, authorities arrested citizens over social media posts deemed inappropriate or misleading. Some individuals faced legal action for sharing opinions or information that authorities claimed could incite unrest.

Now, apply this same model to financial transactions. A world where money is monitored with the same scrutiny as speech. Where access to funds is conditional, not based on income or financial standing, but on whether spending aligns with policies and regulations. With a CBDC, there is no need for restrictions on cash withdrawals or frozen bank accounts—transactions could be limited at the source.

Imagine waking up and finding that your savings no longer exist. Not because of a bank error. Not because of fraud either. But because an algorithm flagged your activity. Perhaps a comment you made online was deemed problematic. Perhaps you donated to a cause that, overnight, was labeled a risk.

The most terrifying part is that this wouldn’t require new laws or sweeping government reforms. The tools already exist. CBDCs would just take this one step further. And as Kevin Dowd’s 2024 analysis shows , most CBDCs attempted so far have flopped because people see no benefit, only greater surveillance and control.

Consider the Bahamas’ Sand Dollar or Nigeria’s e-Naira: despite high expectations, both failed to gain traction. In Nigeria, the government resorted to forcibly restricting cash access, triggering economic chaos and public protests when the policy backfired.

And historical parallels already exist.

• Remember the Global Financial Crisis of 2008–09? Banks failed, liquidity vanished, and central banks responded with quantitative easing and interest rate cuts. But it still took months or years to reach consumers. With a CBDC, such stimulus could be pushed instantly into citizen wallets or just as easily retracted.
• Also, let’s not forget that in 2013, the Cyprus government approved a one-time “bail-in”, seizing a portion of citizens’ uninsured bank deposits to recapitalize failing banks. This shattered trust in banking safety and sent Bitcoin’s price surging, as citizens searched for escape routes.
• In 2015, amid a sovereign debt crisis, Greek authorities capped ATM withdrawals to €60 per day, cutting off full access to citizens’ own savings to prevent a banking collapse. Lines formed at ATMs, pensions were delayed, and economic activity ground to a halt, not because money didn’t exist, but because access to it was throttled by decree.

These historical facts show that in times of crisis, governments act quickly to restrict financial freedom, sometimes to stabilize systems, and other times to control dissent. Dowd highlights that such episodes are precisely why forcing a CBDC on the public can backfire spectacularly when trust collapses.

More recently, the Freedom Convoy protests in Canada opened many people’s eyes to the power governments already have over financial access. It was a large-scale protest movement in early 2022, led by Canadian truckers opposing COVID-19 vaccine mandates and restrictions.

What began as a convoy of trucks traveling to Ottawa quickly grew into a nationwide demonstration against government overreach. Truckers blocked major roads, occupied downtown Ottawa for weeks, and gained support from thousands of citizens who donated money, supplies, and fuel. It was a decentralized protest, funded largely by small online donations from ordinary people who wanted to support the movement.

In response, the Canadian government invoked the Emergencies Act , granting itself extraordinary powers to crack down on the protest. One of the most shocking measures was the ability to freeze the bank accounts of those who had donated to the cause. Regular citizens, many of whom had simply sent $20 or $50 to support truckers, suddenly found themselves locked out of their own money.

Of course, this is not the only danger of CBDCs. Another major concern is negative interest rates.

Today, when interest rates go negative, people can withdraw cash and store it outside the banking system. However, with a CBDC, cash would no longer exist as an escape option. If central banks want to discourage saving and force spending, they can program money to lose value over time.

Real-world failures show how fragile this grand vision can be. In the Eastern Caribbean, the DCash CBDC platform suffered a catastrophic outage starting in January 2022. The entire network froze for more than six weeks due to an expired software certificate, a basic IT oversight that left every user locked out of their funds.

There’s also the issue of absolute centralization. Some CBDC proposals envision a pure central bank model where individuals hold accounts directly with the central bank (DCash), eliminating commercial banks as intermediaries. Yes, this does increase efficiency, but it also creates a single point of failure.

If the central bank’s CBDC infrastructure is compromised, the entire financial system collapses in one blow. In the modern banking system, risks are spread across multiple financial institutions, payment networks, and offline alternatives.

This is why a CBDC system that eliminates commercial banks is a double-edged sword. On one hand, removing intermediaries reduces costs and speeds transactions. On the other hand, it centralizes all financial risk into one entity that is vulnerable to external attacks.

Another example would be a bug or a system crash. Suddenly, millions could find themselves unable to buy, sell, spend, or even access their own money.

Programmable Money Isn’t a New Idea, Just a New Actor

It’s important to remember: programmable digital money isn’t a new concept. In fact, it was aggressively opposed when proposed by a private company.

In 2019, Facebook (now Meta) introduced Libra, later renamed Diem, a global digital currency backed by a basket of assets. Governments worldwide quickly united to shut it down.
The U.S. Congress held hearings. At a 2019 House Financial Services Committee hearing, lawmakers grilled Facebook’s David Marcus (then head of Calibra, Facebook’s crypto wallet project).

Rep. Maxine Waters (D-CA), Committee Chair :

“Facebook has demonstrated disregard for the protection and careful use of this data. I have serious concerns with Facebook launching a digital currency and digital wallet.”
— U.S. House Hearing, July 2019

European and UK regulators warned it would undermine monetary sovereignty. Central banks said, “No single corporation should control global money.”

Libra was cast as a financial Trojan horse, a way for a tech company to gain too much power.
After relentless pushback and regulatory paralysis, Libra/Diem was never launched. The Diem Association sold its assets to Silvergate Capital in 2022, effectively ending the project.

The Double Standard?

Now, the very same institutions, governments, and central banks are building CBDCs with similar capabilities: programmable, trackable, and designed for fast digital payments.

But this time, the tone is different. There’s no talk of “financial destabilization” or “threats to sovereignty” because the power remains in state hands.

• Libra was cast as a financial Trojan horse for corporate overreach.
• CBDCs are quietly emerging as digital levers for state control.

The shift is not in what programmable digital money can do, but in who controls it. And for citizens, the risks to privacy and autonomy remain just as real, if not greater.

Privacy by Design or Just by Promise?

Governments often emphasize that privacy concerns will be addressed in CBDC design, referencing so-called Privacy-Enhancing Technologies (PETs) as a safeguard .

The Bank of England, for instance, acknowledged the need for data minimization and user anonymity in its 2023 Technology Working Paper on the proposed Digital Pound, suggesting that CBDC architecture could, in theory, allow for “tiered access” or “zero-knowledge proofs” to preserve privacy while enabling compliance.

According to the European Central Bank , “The digital euro promises you better privacy and data protection than other current electronic means of payment.”

China, which has conducted the world’s most extensive CBDC pilot to date, promotes a model of “controllable anonymity ,” where users’ identities are shielded from merchants but remain visible to the central bank and regulators upon request.

However, these theoretical protections often fail to translate into practice . Technical feasibility is not the same as political will. The legal frameworks, data access rights, and enforcement mechanisms are still vague, and central banks retain the ability to override PETs if compelled by national security, tax, or policy concerns.

In other words, privacy exists only to the extent that governments allow it, not as a user-enforced right.

Without legally binding commitments and independently auditable safeguards, privacy claims remain little more than promises. As history shows, emergency powers, once introduced, rarely go unused.

CBDCs Could Become the Biggest Driver of Bitcoin and Crypto Adoption

Despite all the pros and cons, one thing is certain—CBDCs will push crypto adoption to new heights. People don’t like losing control over their money. When every transaction is tracked, every payment is subject to oversight, and financial privacy disappears, they will seek alternatives.

As Tarun Gupta, Founder and CEO of Coinshift, explains,

“Fundamentally, I don’t believe in the implementation of CBDCs. Instead of CBDCs, I believe in countries working towards clear stablecoin regulations that empower businesses to launch stablecoin products on public blockchains. Stablecoins with regulations built into a contract are the future of money movement because they strike a balance between compliance and financial freedom. For example, Circle’s USDC can freeze funds or apply OFAC sanctions directly at the contract level, but all of this happens transparently on a public, permissionless ledger, preserving autonomy and accountability.”

Bitcoin, stablecoins, and other cryptocurrencies will be the escape route for those who refuse to live in a system where every cent is programmable and permissioned. This isn’t speculation. It has already happened.

In Nigeria, the central bank launched the eNaira CBDC with high expectations of mass adoption. Reality played out differently: only 0.5% of the population, about 1.1 million, used it. The government rolled out incentives—discounts, promotions, awareness campaigns—but nothing worked. So, they escalated. The government announced that physical cash would be pulled from circulation. Old notes came with a strict expiration date—two months.

Adoption jumped to 6% —13.4 million people—more than twelve times the original number. Not due to demand, but because of a cash shortage that still persists .

However, crypto adoption in Nigeria far outpaced eNaira’s, and the reason is clear. Between November 2020 and April 2021, about 33% of Nigeria’s population engaged in cryptocurrency transactions.

Now, according to Chainalysis , Nigeria ranks second in the 2024 Global Crypto Adoption Index, just behind India. Even as the government pushes its CBDC, people continue turning to decentralized alternatives.

Conclusion

The future of money may soon be one where every purchase comes with strings attached. A system where your dollars or euros are not truly yours but tokens managed by rules you never set. “You will own nothing, and you will be happy” might sound like a catchphrase from a far-off prophecy. But it hints at a world where efficiency wins, even at the cost of personal freedom.

America chose a different path. President Trump blocked the creation of a digital dollar, opening the door for stablecoins like USDC and USDT. And it’s understandable—98% of stablecoins are USD-denominated. The global crypto power scale already leans in favor of the United States.

And this is where problems arise for other nations. They can either continue relying on American-controlled financial rails or attempt to carve out independence. Europe and China see the risk. The European Central Bank pushes for a digital euro, fearing that a reliance on US-backed stablecoins cements American dominance.

To limit this dependence, the European Union enacted MiCA, the world’s first unified law for crypto-assets and stablecoins. MiCA requires stablecoin issuers to hold full reserves, follow strict capital rules, and secure authorization before operating in the EU. By enforcing these standards, the EU aims to reduce the dominance of dollar-pegged tokens like USDC and USDT in European payments and to create a safer foundation for the future digital euro.

CBDCs promise faster, cheaper payments and greater financial inclusion if designed to work online and offline. They clear away the clutter of cash and speed up transactions. But they also bring oversight that could limit what we can buy and how we spend our money. When every cent is programmable, the freedom of choice fades.

You may see this already in places where people feel forced into digital systems. The choice between a controlled CBDC and the freedom of decentralized alternatives is not merely academic. It touches the very core of what it means to own something. The rise of Bitcoin and other cryptocurrencies shows that many would rather risk a little volatility than hand over complete control.

In the end, the path you choose will shape your financial future. A future where you truly own your money, or one where you own nothing, and you are told to be happy with that. The choice is yours.

CCN Reports is a regular series that delves into the details to provide in-depth analysis of cryptocurrencies and the companies associated with them. We aim to engage a global audience interested in what’s what, who’s who and perhaps even why’s that.