U.S. Congressman cautions about privacy concerns regarding CBDCs
- U.S. Congressman Tom Emmer believes that the introduction of CBDCs will jeopardize the financial privacy of American citizens.
- Emmer introduced the CBDC Anti-Surveillance Act last month.
United States Congressman Tom Emmer believes that the introduction of programmable central bank digital currency in the country will jeopardize the financial privacy of American citizens.
Emmer explained yesterday (9 March) at the Cato Institute, a think tank in Washington, D.C., that the programmable CBDC could be easily weaponized as a spying tool to “choke out the politically unpopular activity.” The Minnesota congressman further added:
“As the federal government seeks to maintain and expand financial control to which it has grown accustomed, the idea of the central bank digital currency has gained traction within the institutions of power in the United States as a government-controlled programmable money that can be easily weaponized into a surveillance tool.”
CBDC goes against American values, claims Emmer
It was in February that Emmer introduced the CBDC Anti-Surveillance Act to halt the development of the Digital Dollar Project which has witnessed significant changes in how it will be used since the second version of its white paper was released in January.
“Recent actions from the Biden Administration make it clear that they are not only itching to create a digital dollar but they are willing to trade Americans’ right to financial privacy for the surveillance-style CBDC,” added Emmer.
Emmer suggested that the blockchain-enabled ownership economy poses a threat to the Washington establishment by redistributing economic power away from centralized institutions into the hands of common citizens.
He believes that this system not only tracks transaction-level data down to the individual user but also gives the CBDC the ability to choke out the politically unpopular activity.
The Minnesota congressman also opined that decentralized cryptocurrencies can help to fix the mismanagement of the U.S. monetary system and restore many of the “American values” that helped the country become an economic powerhouse in the 20th century, such as privacy, individual sovereignty, and free markets.
He went on to say that even experimenting with CBDCs goes against these “American values.”
Citigroup believes CBDCs will lead the way to mass adoption
Citigroup believes CBDCs will lead the way to mass adoption Assad Jafri · 18 hours ago · 2 min read
Citi said that mass adoption will happen when more than a billion people are using blockchain technology without knowing they’re using it.
2 min read
Updated: March 30, 2023 at 6:30 pm
Cover art/illustration via CryptoSlate
U.S. banking giant Citigroup believes that mass adoption is six to eight years away and will be driven by central bank digital currencies (CBDCs) and the tokenization of financial, gaming and real-world assets, according to the lender’s latest blockchain report.
Citi compared blockchain innovation to the early days of gas-powered vehicles or digital cameras and said that the world usually does not recognize the value and benefits of disruptive technologies at first. This factor is compounded by the nature of blockchains, which are a “backend infrastructure technology with no prominent consumer interface,” unlike automobiles and cameras.
However, Citi believes that the mass adoption of blockchain tech will happen in the near future as it starts to establish itself in real-world use cases. Citi said:
“Momentum on adoption has positively shifted as governments, large institutions, and corporations have moved from investigating the benefits of tokenization to trials and proofs of concept.”
Citi’s recipe for mass adoption
According to the research report, mass adoption will happen when more than a billion people are using blockchain technology without knowing they’re using it.
The lender believes this will most likely happen through CBDCs as more and more governments start implementing digital currencies in their economies. As of March, more than 20 central banks plan to issue or have already issued a digital currency — giving almost 2 billion people access to digital money in the coming years.
Citi projected CBDCs to hit a combined market cap of $5 trillion by 2030 in major economies and said that roughly 50% of them would be linked to distributed ledger technology.
Citi noted that CBDCs will allow people to interact and experiment with digital currencies in a relatively secure environment due to state-backing, which is a good thing for the overall adoption of blockchain tech despite most central banks not using it for their CBDCs.
Social media payments and gaming
Citi said that beyond CBDCs, blockchain-based social media payments and the tokenization of gaming assets will play a major role in driving the adoption of blockchain technology among the general public.
Almost every social media platform is currently in the process of enabling digital payments and some — like Telegram and WhatsApp — have made considerable progress.
Telegram recently launched blockchain-based payments for USDT, allowing users to send and receive the stablecoin via messages. The app has been a stalwart proponent of cryptocurrencies and blockchain payments almost since its inception.
Meanwhile, the tokenization of in-game assets is expected to drive adoption among more than 3 billion gamers worldwide. However, web3 games need to be as good as non-web3 games for this to happen, according to the report.
Citi said that gamers don’t care about the technology being used in their games, they only care about the quality of the game and will easily switch to a web3 equivalent of their favorite if one exists. The lender noted that even if only a fraction of the gaming community adopts blockchain-based games it will still result in a significant increase in adoption numbers.
“With over 3 billion gamers worldwide today, we are likely to see nearly 50 million to 100 million adopt games with some element of Web3 or blockchain by 2025.”
Additionally, the lender believes that the tokenization of financial and real-work assets is expected to grow 80x in private markets over the coming years and could also become a significant driver of mass adoption.
Binance insiders allegedly helping customers bypass KYC norms
- A new CNBC report claimed that Binance insiders were allegedly assisting users in circumventing security protocols.
- These insiders, termed ‘angels,’ have allegedly assisted customers bypass KYC norms.
Though the world’s largest cryptocurrency exchange, Binance [BNB] has made significant efforts to be a leader in transparency since FTX’s demise, a new CNBC report claimed that Binance insiders were allegedly assisting users with circumventing security protocols.
According to the report, a bunch of insiders have allegedly been assisting customers to circumvent the exchange’s Know Your Customer (KYC) norms.
It was only last week that Binance co-founder and CEO Changpeng “CZ” Zhao tweeted that the exchange will convert the remaining $1 billion funds in its Industry Recovery Initiative to “native crypto,” as there are “changes in stablecoins and banks.”
Given the changes in stable coins and banks, #Binance will convert the remaining of the $1 billion Industry Recovery Initiative funds from BUSD to native crypto, including #BTC, #BNB and ETH. Some fund movements will occur on-chain. Transparency.
— CZ 🔶 Binance (@cz_binance) March 13, 2023
As per the CNBC report, over 220,000 users have registered in Binance’s official chat rooms. Users are reportedly able to access shared messages by circumventing the exchange’s KYC, residency, and verification protocols.
A Binance spokesperson told CNBC:
“Binance employees are explicitly forbidden from suggesting or supporting users in circumventing their local laws and regulatory policies, and would be immediately dismissed or audited if found to have violated those policies.”
China users bypassing Binance crypto ban
These messages allegedly came from accounts identified as Binance employees or trained volunteers, also known as “angels.” The report mentioned that these “angels” share techniques related to forging bank documents, falsifying addresses, and concealing the country of origin to help users obtain a Binance debit card.
This news has emerged as China continued to impose a strict ban on cryptocurrencies. In 2017, China banned cryptocurrency exchanges and cryptocurrencies altogether in 2021. Chinese users who circumvent KYC rules to gain access to Binance may face consequences if caught.
Some have urged the Chinese government to reconsider the crypto ban, but regulators have not budged. Meanwhile, Chinese officials are pressing ahead with plans for the digital yuan, its national central bank digital currency (CBDC). Millions of dollars have been spent on adoption efforts.
CBDC adoption grows in Nigeria amidst cash crisis
- Nigeria witnessing increased CBDC adoption nearly 18 months after launching its national CBDC amid an acute cash crisis.
- The value of eNaira transactions has increased to 22 billion nairas ($47.7 million).
Nigeria is witnessing an increased Central Bank Digital Currency [CBDC] adoption nearly 18 months after launching as national fiat reserves face shortage.
The central bank’s decision to replace older notes with larger denominations amid inflation has caused Nigeria’s cash crunch. While developing countries were among the first to recognize the value of a CBDC, the concept is yet to be put into practice in most parts.
The local political climate and other macro-economic conditions are also responsible for the current cash crisis. The naira redesign has certainly made worse the current economic hardship and spiked pressure on the unbanked.
Nigerians have been faced with record-high inflation of 21%, as well as a shortage of the newly redesigned naira.
Demonetization has caused Nigeria’s circulating cash supply to be reduced from 3.2 trillion nairas to 1 trillion nairas. To compensate for this decline, Nigeria minted over 10 billion eNairas.
Furthermore, eNaira payouts in government initiatives and social schemes promote CBDC adoption.
Can CBDCs assist during a cash crunch?
As per a Bloomberg report, it is the lack of physical cash that has forced Nigerians to use the eNaira. In a country where cash accounts for about 90% of deals, the value of eNaira deals has risen by 63% to 22 billion nairas.
The governor of the Central Bank Godwin Emefiele said that the number of CBDC wallets grew more than 12 times compared with October 2022.
“The eNaira has emerged as the electronic payment channel of choice for financial inclusion and executing social interventions,”
CBDCs claim to provide a way for developing countries to beat the challenges posed by the fiat economy. According to the Atlantic Council, only 11 countries have established their own CBDCs so far. Nigeria is the largest country with an operating CBDC, with the remaining ones being small island nations in the Caribbean.
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