At the time I am writing this, 146 nations are working on or experimenting with central bank digital currencies. Four years ago, it was only 87. No one outside of those associated with Central Banks has even considered the implications of these developments.
CBDC refers to a sovereign currency that has been converted into a digital format. The cash in your wallet does not reveal your identity and can be used anonymously, but all transactions done using CBDC leave behind a permanent, traceable record. This is the main motive behind CBDC in many governments.
This is something China realized years ago. In 2014, when Western CBDCs were just theoretical ideas, the People’s Bank of China launched work on its CBDC – the digital yuan. By the end of 2025, more than 3.4 billion transactions valued at $2.3 trillion were completed. This occurred in 17 Chinese provinces through systems embedded into public transportation, healthcare, and retail transactions. Early this year, the People's Bank of China declared the digital yuan as interest-bearing, a feature not yet seen in any other major digital currency. They also changed its designation to be a deposit liability. Whenever a nation chooses to make its trades using China's digital infrastructure and not the Society for Worldwide Interbank Financial Telecommunication (SWIFT), that nation becomes partially immune to the United States sanctions network.
Construction is occurring in Europe too, with varying justifications. The European Central Bank has presented the digital euro in terms of monetary sovereignty. Currently, two-thirds of all card payments within the eurozone take place using systems controlled by America, including Visa, Mastercard, Apple Pay, and PayPal. If stablecoins become the leading digital payment network used in Europe, then European monetary policy will be partially beholden to American private industry. The European Central Bank considers the digital euro to be its “global euro moment”. Criticism of a trackable state-sponsored cryptocurrency is valid no matter who sponsors it.
In America, they did things differently. In January of 2025, Trump issued an executive order that prohibited the development of a U.S CBDC by the government. Six months later, Trump signed into law the GENIUS Act, which became the first framework for regulating privately owned dollar-backed stablecoins. It is stated that by not engaging in digital currency development, the American government preserves the privacy of its individuals. In practice, the situation looks different. According to the GENIUS Act, all issuers of stablecoins have to stop, freeze, or refuse transactions when required by law. Tether operating within current regulations has already frozen more than $4.4 billion in cooperation with American law enforcement agencies. Surveillance is embedded in the infrastructure of stablecoins, but going through JPMorgan or Circle, not the Fed.
The commonality in all three scenarios is that each is an issue of determining who will control money at the level of the financial infrastructure. The decisions on who should control the financial systems of the future are being made right now without any democratic discussion of how the use of programmable money can impact civil liberties. Even the Fed website page on CBDCs takes care to explain its dilemma. A digital dollar will have to safeguard privacy while not enabling illicit activity. What is not acknowledged is that a surveillance system cannot be turned on and off for only certain types of transactional activity.
Anonymity has always been inherent in cash. The creators of the system of modern currency understood very well that financial anonymity goes hand in hand with freedom of politics. Every digital currency in existence right now takes a completely different path. By the time it becomes obvious what exactly is being built, the technology will already be carrying weight, and the opportunity to choose differently will simply disappear.
Crucial decisions rarely arrive through public debate. They accumulate through technical choices made quietly, until it is already decided, and the moment to push back has passed.