Bitcoin fever is the primrose’s path to digital bondage –

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Bitcoin fever is the primrose’s path to digital bondage – fr


Dozens of central banks have a task force that is developing a state-backed electronic coin, not so much because they feel threatened by the crypto insurgency – they don’t – but rather because the cryptos have planted a tempting idea in their head. Some see it as a way to bring interest rates still below zero, or even minus 2 pc. Others see digital mania as an excuse for building an institutional empire.

The problem when central banks embrace digital currencies is not just that cash goes extinct and therefore erodes the freedom of pure anonymous money. This is already happening as contact and debit cards take over. The use of cash in the UK has collapsed. Try to find a store or restaurant that still accepts crowns in Sweden.

The bigger question is who controls how the money is used. China is already rolling out its digital yuan to a dozen cities on a trial basis. He appears on smartphones with a silhouette of the tyrant Mao. This electronic money (DCEP) has many purposes: to take advantage of artificial intelligence and big data and, in the words of a Chinese official, to counter the ability of the United States to “exercise global hegemony and exercise jurisdiction. long arm ”via the Swift payment system.

Above all, it is a domestic control tool, allowing the state to collect data on each transaction in real time, in a centralized computer system with algorithms to report activities deemed threatening to the Communist Party. This can block activity. This is why the Central Commission for Discipline Inspection – the Party’s executor – adores him.

It joins facial recognition cameras and social credit scores in Xi’s Orwellian state, but it’s also intended to bring Alipay, WeChat Pay, and Tencent down before they become law of their own. “It’s not just a technical experience. It is a giant leap for the control and influence of the Communist Party in Chinese society, ”say Yaya Fanusie and Emily Jin of the Center for a New American Security in Washington.

Western central banks are not trying to oppress their people. Yet their digital currencies are nonetheless Leviathan beasts in cubhood, offering overbearing temptations. The danger increases if the Federal Reserve, the Bank of England or the European Central Bank switch from wholesale banking to digital retail banking, an idea that has already been launched.

Do we want them to offer bank accounts directly to businesses, funds and households, in direct competition with private commercial banks? This would risk rushing to central bank security in the event of a financial crisis, setting off a vicious cycle. You can’t mourn over the bankers, but it is surely worse for state agencies to acquire a monopoly on money deposits and private savings, by deciding who receives the loans, by draining the energy of the capitalism.

Central banks respond to political fad. Private wealth would be directed to caressing causes, or what Hayek called “the state of social engineering.” Economic pluralism would give way to a centralized, quasi-Chinese version of Leninist capitalism, or in a less extreme form dirigiste planning of Brussels, at odds with the vibrant chaos and political insolence of the Smithian market. It would hardly be better if Facebook had such power through its Diem motto, since Facebook is not a neutral social actor.

The beauty of today’s fractional reserve banking system – the foundation of three centuries of galloping progress – is that the allocation of private money is not controlled by the state. Central banks provide safe and stable currency. They don’t pick – or rather didn’t pick – winners and losers.

They crossed a line when they started using QE as a routine tool for managing inflation, to the point where the ECB is the main buyer of European corporate bonds, and the Bank of Japan owns a large stake. of the Tokyo Stock Index.

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