New financial systems are emerging – digital currencies and cryptocurrencies.💲
CBDCs are a good step forward, but it is a state-controlled currency.
This implies, in theory, all the same problems as with fiat, like inflation for example. 📈
After all, the government benefits from people spending more (and others earning as a consequence) and so stimulating economic growth.
🎯There is also a fear that the money will be targeted (i.e. you can spend this particular dollar only on a particular category of goods and not, as now, on anything.
This option is presented as a benefit, like: "You can give your child money that they can only spend on lunch at school and not on anything else."
But it can also severely limit people's freedoms.
For example, in Europe they are discussing putting a cap on CO2 emissions for every product/service and every person will have a limit on how much CO2 they can consume in their purchases.
And in this case you might end up in a situation where you have the money, but can't spend it.
This is the most harmless example – if you think about it further, even worse situations come to mind.😱
⌛️The second fear is that the money may become urgent, i.e. it has an expiration date and has to be spent before a certain time, or something will happen to it: it will be burnt, reduced or frozen.
This is good for the economy – it encourages spending, but for citizens this option makes money worse.
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