Economist and former Greek Minister of Finance, Yanis Varoufakis, says the current banking regime is rightfully wary of a central bank digital currency (CBDC) in the US.
In an op-ed for Project Syndicate, Varoufakis – who led negotiations with Greece’s creditors during the country’s debt crisis – says fears of future CBDCs are similar to the fears of smoking restrictions.
Just as cigarette companies lamented the rise of smoking restrictions, Varoufakis says JPMorgan and the other Too-big-to-fail (TBFT) banks view CBDCs as a government-backed threat against their business.
“Once upon a time, the greed of tobacco companies was channeled through libertarian outrage over the restriction of smokers’ freedom to choose cancer.
This time, the outrage is serving the interests of bankers panicking at the prospect of Fed accounts. Dimon and other masters of the TBTF universe are right to be scared, because a Fed CBDC would threaten their empire building.
And bankers around the world are right to fear that many of their lucrative services would no longer be required. With those services – holding deposits, processing payments, and so on – ‘disintermediated,’ they would suddenly be unable to hold societies hostage.”
Varoufakis says that contrary to popular belief, CBDCs aren’t necessarily the dystopian nightmare that many critics believe them to be.
He believes a CBDC system could be far more private and resistant to tyranny than the current private banking apparatus.
“The system that manages Fed accounts can be made totally anonymous (just as crypto accounts are anonymous and identified by a long string of numbers) while a separate system supervised by relevant authorities can check for illicit activity such as tax evasion and money laundering. Thus, a proper and democratically controlled CBDC rollout can bring the combined benefits of strengthening tax collection, fighting deflation, and enhancing protection against Big Brother (and his many little brothers).”
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