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7th December 2022 > > CBDCs.

tl;dr

CBDCs (Central Bank Digital Currencies) raise their ugly heads again.


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With just a couple more trading weeks left this year, what chances of the Santa Claus rally for risk assets? Yeah, me neither.


Curious Cryptos’ Commentary — CBDCs (Central Bank Digital Currencies)

CBDCs (Central Bank Digital Currencies) come in for a lot of criticism in these pages.


There is a strong argument to be made that no reference should ever be made to them by the CCC as they are not cryptos, and never will be. Unfortunately, the wider world conflates CBDCs with cryptos, mostly through ignorance, whilst politicians and the like make the same mistake, but probably more likely because of malicious intent.


Governments worldwide exercise various degrees of coercion and control over the populace. Those of us fortunate enough to live in a Western liberal democracy probably don’t appreciate just how bad things are elsewhere.


Two stories have caught my eye, that give a pointer as to these differences, and how less democratic nations might use CBDCs.


First up is Nigeria, a country that tried to “ban” BTC in 2021 before rapidly rowing back on such nonsense.


The e-Naira was launched on October 25th 2021 as part of its “cash-less” policy which can be read here:



Nigeria has often ranked quite highly in the list of corrupt nations, with a large wealth discrepancy between the political and financial elite, and most of the rest of the population. Endemic corruption is difficult to exorcise - a move to a cashless society might possibly be seen as one method of trying to mitigate that corruption.


The take-up and use of e-Naira has been minimal. Just 0.5% of the population are reported to have used it. Disappointed with this outcome, the CBN (Central Bank of Nigeria) has issued a directive limiting cash withdrawals for individuals and businesses. These limits are the Naira equivalent of $45 per day and $225 per week from an ATM, and $1,125 per week from a bank branch for business.


Director of Banking Supervision Haruna Mustafa explained this move:


“Customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.”


Iran – run by psychopathic religious nutters who threaten not only individuals unfortunate enough to live under their rule but also whole nations with a promise to wipe them off the face of the earth – have now warned those hijab protesters that financial penalties will apply.


Hossein Jalali, a member of the Cultural Commission of the Islamic Consultative Assembly, an assembly which I suspect is not particular familiar with the meaning of the word consultation, announced a new rule for those women who fail to wear a hijab in public:


“… the bank account of the unveiled person may be frozen."


Call it what you will, but that is theft in my book.


Supporters of CBDCs will make the very reasonable point that this action is being taken against accounts held in the legacy financial world. But such a comment misses a key point.


Those psychopathic rulers of Iran are very keen on developing a crypto rial. Rolling one out in replacement of bank accounts enhances their ability to control behaviour through immediate and direct access to the wealth of individuals.


We have seen the same approach taken by two countries that would normally rank more highly in the democratic stakes.


Cyprus stole the money held in personal bank accounts over EUR 100k during the financial crisis.

Justin Trudeau, Prime Minister of Canada, in one of the more egregious acts of illiberalism during the global over-reaction to Covid, enabled the authorities to freeze the bank accounts of individuals lawfully protesting extreme lockdown measures.


Again, I make the point that CBDCs make this process of blanket financial penalties with no judicial process, or right of appeal, as simple as pressing a button in the era of CBDCs.

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