Yanis Varoufakis, the former Prime Minister of Greece, has written an op-ed for Project Syndicate in which he discusses how big banks, including JPMorgan and other too-big-to-fail institutions, are panicking about the potential introduction of a US Central Bank Digital Currency (CBDC).
Varoufakis draws a comparison between this situation and the challenges faced by cigarette companies in the wake of smoking restrictions. He explains how major banks perceive CBDCs as a government-backed threat to their operation, as many of the services they offer, such as deposit-holding and payment processing, could become obsolete. This could jeopardize their grip on society and lead to the downfall of their empire-building endeavors.
Varoufakis argues that the prevailing notion of CBDCs as dystopian nightmares is challenged by their potential to offer increased privacy and resistance to tyranny compared to the current private banking system. He suggests a two-tiered system for CBDCs; one with completely anonymous management, much like cryptocurrency accounts identified by lengthy strings of numbers, and a separate system to monitor illicit activities such as tax evasion and money laundering.
Varoufakis posits that a properly controlled CBDC application, with democratic oversight, could yield numerous benefits such as improved tax collection, deflation prevention, and protection against intrusive surveillance.
Varoufakis’ insights challenge conventional perspectives on CBDCs, igniting discussions on the future of finance and individual freedom.
Compiled by Coinbold