Edward Snowden, NSA whistleblower and journalist, is well-known for his opinions on Bitcoin and cryptocurrency adoption. However, in the most recent issue of his newsletter, Continuing Ed, Snowden cited an article discussing whether the United States could mint a $1 trillion platinum coin.
In doing so, Snowden sparked a debate about centralized money, CBDCs, and their potential use as surveillance tools.
On banking, bitcoin, and the future of money: a response to a governor of the Federal Reserve, Christopher J. Waller.https://t.co/720SYvqzZM
— Edward Snowden (@Snowden) October 9, 2021
Is it better to be or not to be… a tool for monitoring
To begin with, Snowden denied that Central Bank Digital Currencies are a type of “digital dollar,” or a country’s acceptance of cryptocurrency. Snowden coined the term CBDCs to describe them.
“…the most recent danger to appear on the public horizon.”
Furthermore, Snowden described a hypothetical scenario in which a CBDC could be used to monitor and control users.
He used the example of a fictitious security guard who needs to limit his sugar intake. According to the whistleblower, the man’s insurance company may have passed on this health information to his CBDC wallet. If the man wants to buy a sweet treat, his wallet may prevent him from doing so – even if he is purchasing it for his granddaughter.
So, what is the connection between CBDCs and decentralized crypto? Is one the same as the other, or are they related? According to Snowden,
“Instead, a CBDC is something resembling a perversion of cryptocurrency, or at least of cryptocurrency’s founding principles and protocols—a cryptofascistcurrency…”
CBDCs – Are they truly a symbol of liberty?
Efforts to develop and issue more CBDCs have gained traction as many fiat currencies have lost value. In fact, Johns Hopkins economist Steve Hanke recently published a weekly update on which countries’ currencies have depreciated against the US dollar.
Each week I publish Hanke’s #CurrencyWatchlist: a basket of currencies that have depreciated 20%+ against the USD since Jan '20. This wk, the Lebanese pound continued to tank. Its depreciation against the USD continues to fuel Leb's high inflation. Leb needs a currency board NOW! pic.twitter.com/bsZbbsfH0S
— Steve Hanke (@steve_hanke) October 5, 2021
It is worth noting that, of these countries, Turkey’s digital Lira is still in the research stage. Meanwhile, Nigeria’s e-naira is reportedly getting ready for launch, though the original October 1 launch date has been pushed back. China is also advancing its e-CNY pilot program.
Many people, however, believe that CBDCs aren’t always a sign of healthy economic development or even freedom. One of them is Edward Snowden.
The Index of Economic Freedom takes into account 12 different types of economic freedom, ranging from government integrity to fiscal health. Turkey was ranked 76th in the Index in 2021, indicating that it is “moderately free.” This was not as concerning as Nigeria’s ranking of 105th, which placed it in the “mostly unfree” category.
China was close behind, with a rank of 107.
Given the foregoing, perhaps Snowden’s criticism of CBDCs is easier to contextualize and put into context.
It’s worth noting, however, that the IMF’s Kristalina Georgieva recently clarified that only one country had issued a CBDC thus far – The Bahamas’ Sand Dollar. The Bahamas ranked 70 on the Index, indicating that it is “moderately free.”