CBDC (central bank digital currency) - advantages and disadvantages

Since CBDC is now being pushed out in some parts of the world , and i couldn’t find much discussion about it in the forum , i would like to discuss here the disadvantages or advantage of using this payment system.

  • At first sight comparing to other payment methods it seemed almost similar user experience on the application end with all the convenience.
  • Though since in CBDC you need to keep a wallet balance , you would not like to keep much amount on this wallet ,than in your bank.
  • If i see from the banks perspective i can see that , for them having a centralized ledger is saving them the cost of transactions compared to any other method of payment since here the Central bank is maintaining all records instead of involving 2 seperate banks. (correct me if i am wrong here).
  • In some context the user may even like it as they don’t want their bank statements to reflect every small amount of penny spent and make it look too complicated.
  • If we talk about comprise in privacy , your transactions is now visible to central bank directly and not your bank. Also this hugely depends upon how central banks chose to implement such technology and how much of the users data would remain private.

Of course CBDC is not meant to make you or your transactions anonymous and i only consider as am option of more convenient payment mode , if it were widely adopted.
Also i would like to know of the current status of CBDCs in other countries and if you had used it.

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The central bank here in Portugal is already implementing a central database for all transactions. Their aim is supposedly to reduce costs for banks while having more data for statistical analysis about the economy. Theyre very proud of being the first in the world to do something like this without having to wait for CBDCs

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You might need to type whole words (not acronym). I had no idea what it was when I clicked it.

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it’s just a far cry because they are loosing tbh. Can be used for liquidating your funds but no-no in my books.


  • central bank and government can see every single of your transactions
  • government can freeze your account even quicker than now, so one spicy take on X or one wrong like on Facebook and your money is gone
  • government can cap your spending on certain things, e.g. you get a $10 allowance on alcohol but unlimited on vegetables :slight_smile:
  • money can theoretically be made to “expire”, so that you can’t ever save or invest, you will have to keep working until you drop dead
  • taxation will become 100% effective. oh you gave your nephew $1000? don’t worry, we’ll deduct the income tax automatically.


  • ?

If a CBDC is properly made, then it should work similarly to cash, as in:

  • no central ledger of transactions, instead a central registry of valid coins (like there’s a number printed on every bank note)
  • accounts are independent on any central service, they should be able to run locally (3rd parties might offer some kind of backup services, but generally people would still also use regular bank accounts to store most of their money to protect from device failure, because these can break or be stolen, same as regular wallets today)
  • coins are indistinguishable from each other, except for the serial number. There might be a central register of revoked coins but that shouldn’t matter too much because in general it wouldn’t be known who owns what coins.

Now of course any state could decide to make up their own version of a CBDC with vastly different features, so really in general it’s hard to say what the advantages/disadvantages are without focusing on an actual implementation. But I don’t think it’s a smart move to just dismiss the idea completely. Ultimately at some point in the next 100 years or so we will probably stop using coins made out of metal and notes made out of paper, and if we want something like https://taler.net to be used in their stead, and not some of the things you dream up here, we need to promote the better way forward, and not preach that we shouldn’t move on. Because move on they will anyway, just not in the right direction then.

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If you dont want to lose the ability to purchase anonymously with cash, lets stay away from all these things.

Besides, we already have the curent ability to do online/digital payments. Lets be on the side with the boomers for once.


This very informative CBDC video covers it better then I could explain myself.

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Boomers are currently occupied with buying all their Christmas presents on Amazon. Theyre not principled about anything, just like to badmouth everything new and then use it anyway (mostly unaware as to what it does because they were preoccupied with badmouthing before).

Truly an unbiased and stereotype-free response /s

Is it really necessary to insult an entire age group of people based on stereotypes? How does that add to the discussion?

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Sure, I’m happy to elaborate on that a bit.

Is it really necessary to insult an entire age group of people based on stereotypes?

First, I don’t see the insult. I didn’t say what they’re doing is bad, I just stated that realistically, instead of actually standing up for their (perceived?) right to use cash (apparently defined as “the type of coins and bank notes circulated by governments in the 20th and beginning of 21st century”), they’re doing other things. Talk is cheap. That btw goes for mostly everyone on this planet, but also for the boomers that were explicitly mentioned by @HauntSanctuary

Then let’s talk about stereotyping: Yes indeed, I’m using stereotypes insofar as that I made a statement in the form of “group Y is doing X”. This kind of statement will always not be 100% true for every reasonably large group Y. I could say that Chinese people eat their food with chopsticks, and while that is a pretty basic statement that could come out of a children’s book comparing food culture around the world, out of the billion people that are Chinese, there will be a substantial amount of people not using chopsticks to aid with ingesting food. I don’t think we necessarily always need to add these kind of disclaimers to every statement, especially when they’re obvious.

Ok onto the necessity part. Yes, of course I felt the necessity to make the comment, otherwise I would not have made it. Now if you read a little bit between the lines, you notice that what I’m actually saying here is not so much about boomers specifically, it’s about people. Especially if you have also read the rest of the thread above, you’ve seen that I originally argued as to the inevitability of some form of CBDC coming into wide use in the next 100 years or so. Now, we have our goals mostly aligned here on the Privacyguides forum insofar that we want to do payment transactions between two parties and keep it between these two parties only, with no or minimal data being accrued anywhere, etc. and I’m calling into question with my comment whether just “backing the boomers” (or people in general, if you will) is actually enough to achieve anything close to that. In the end, I suspect they will succumb to their lower urges and use whatever kind of CBDC there is so long as it is sufficiently convenient to use and the misuse of their data and violation of privacy is not egregiously apparent. I’m therefore advising another course of action, namely early advocacy of privacy-conscious implementations of a CBDC that bring with themselves the same amount of convenience and spreading awareness of that throughout the population.

How does that add to the discussion?

Well seeing the discussion so far, most comments can be summarized as “CBDC bad, cash good”, without going into any further (+ the one meta comment from you). My two comments however seem to be the only ones that don’t just voice a subjective opinion but also try to tackle reality. But of course, I used the word “boomers” and some irony (my attempt at self-deprecating humor considering my own age), now everything’s vain. I should’ve just posted an image meme of Scrooge McDuck praising his unwashed collection of chemical element 79 and it would’ve been all for the better.

Sure. How does that necessarily lead to CBDCs?

… I mean how else are you gonna do it? Cryptocurrency? That doesnt give the gov enough power to regulate and make monetary policy to help prevent and mitigate economic disasters. I guess something else could appear but i dunno… Might there be a way that digital currencies can be made anonymous?

What prevents the eliminination of physical currency? What needs to be changed, calling for CBDCs, for that to take place?

There’s already a way, e.g. Monero. But the governments wouldn’t want that, though. Money laundering, tax evasion, etc.?

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And also the whole monetary policy thing. I was asking about central bank run currencies though, because cryptocurrencies have a whole host of problems that seem to be baked into their design.

The term “CBDC” is very broad. It just means a digital currency (which yes, I assume that’s where we’re heading hopefully, not Nuka-Cola bottle caps) with oversight from a country’s central bank. That last one is also very likely, if states continue to exist in a fashion they do today, meaning that they have the monopoly on legitimate use of force and therefore can declare legal tender used for settling debts.

Combine digital currency + central bank (i.e. state-run currency) and you get: CBDC. Now how exactly the CBDC is designed and how it works, that can vary wildly. Apparently most people in the thread so far seem to think that it would work like a bank account at the central bank. I find this assumption to be a bit strange. Bank accounts today don’t hold money. If you give money to a bank, it’s no longer yours, it’s the bank’s money. What is recorded on your account is how much the bank owes you. And the idea is then that you can always go to the bank and ask them to repay all of or part of that debt. But bank account != money vault.

Now unless we change completely how currency works, a CBDC would still be actual money that is owned by someone, not just a debt from the central bank to you. (Of course at that point of the discussion we could start thinking about what money really is and how even today’s coins and bank notes don’t have a value on their own, we just pretend that the funny colored slip of paper is equally as enticing to own as a week worth of groceries, but I think this is not the point of this thread…) So anyway, I do believe that a good CBDC would look similarly to or at least look for inspiration to projects like Taler. Because fun fact: yes you can make digital currencies that are not “cryptocurrencies” (which I will never forgive for taking over the prefix “crypto” from something that is actually advancing the human race).

Read for example this paper: https://taler.net/papers/accounts-dangerous-2022.pdf Technically there is no need at all for a CBDC to be account-based, neither does it require for citizens to link anything with their ID if implemented correctly. I think we need to steer society and the public mindset to where at least these two points are widely understood. I don’t think it’s fruitful to just go on tirading “they’ll take our cash = bad” because while I actually personally wouldn’t mind to never get any kind of digital cash in my lifetime, I don’t think this perspective will eventually be persuading enough. Of course, feel free to disagree here with me.

Edit: see also AsynChronicles - petites singularités (both French and English, be warned)

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Thanks for the detailed explanation. A while ago, i heard that in the US, the Federal Reserve (central bank) was taking first steps to investigate potential designs for a CBDC that preserved privacy and stuff, but who knows how that will turn out :person_shrugging:

Sometimes I’d wish we’d just go back to bartering. Or at least something gold based.

Since Bretton Woods we live in a world full of bullshit and controlled currencies. Central Bank Digital Currency is a step further to optimize this control.

Instead of trusting private banks we will trust a centralized almighty public bank :upside_down_face: