Arthur Hayes, a former CEO of the cryptocurrency derivatives platform BitMEX, has just published a blog post titled “Pure Evil” in which he expresses his views on central bank digital currencies (CBDCs), referring to them as “pure evil.”
Hayes clarified that however, CBDCs aren’t evil to everyone. He remarked that the evil it represents to some is the good it represents to others.
We, the governed, the government and the political elites who pull the strings, and the commercial banks licensed by the government of a given nation-state, are the three main actors in this tragic drama as he calls it.
CBDCs are evil for the people and a weapon for the government
Hayes dived into an explanation behind his reasoning. According to him, the people should see CBDCs as a full-frontal attack on their capacity to exercise sovereignty over honest transactions between one another.
Because all of its people have elected to freely put their lives into social media sites like Instagram and TikTok, it presents the government with the ideal opportunity to influence the behavior of its subjects in the most effective way possible.
CBDCs pose an existential danger to the banks since they threaten the banks’ ability to continue operating as going concerns, says Hayes.
I believe that the apathy of the majority will allow governments to easily take away our physical cash and replace it with CBDCs, ushering in a utopia (or dystopia) of financial surveillance.Arthur Hayes
He continued by saying that despite this, the people do have an ally in the form of commercial banks. Hayes is of the opinion that the banks will make it more difficult for the government to establish the CBDC architecture that will be most successful in exercising control over the general public.
According to Hayes, the most significant distinction between CBDCs and the electronic currency that is used now is that the government will be able to program their CBDCs to be completely under their control.
This is facilitated by the improvements made possible by blockchain technology. This extra degree of control is what will give them the ability to resolve both aspects of the inflation issue that they are facing.
According to Hayes, in this “CBDC dystopia”, people who normally would be out on the streets protesting the high price of food and petrol would instead be handed e-money directly to boost the amount that they could afford to spend on necessities.
It is possible that persons who have money might be prevented from investing it in anything other than government bonds that offer a rate of return that is lower than the rate of inflation.
These limits could be enforced by the actual coding of the currency itself, rather than merely by the legislation. He believes that all of this can be accomplished by programming with very little room for errors, if any at all. He further said:
That in and of itself is not pure evil. It is definitely no bueno from the perspective of savers, but it isn’t markedly different than forcing pension plans to hold a certain amount of below-inflation-yielding government debt as a “suitable” investment for their retirees.
CBDCs are a “potential hellscape”
By using CBDCs to their maximum potential, the government may exert direct control over who is able to transact and for what purposes. The reality that governments will not stop at the safest use of a technology even if doing so can provide benefits makes the CBDC future a “potential hellscape”, says Hayes.
In the CBDC-verse, all transactions between citizens are conducted using digital currency, and no other currency is used or recognized. Under the current monetary system, there is little hope for society to advance since individuals cannot effectively band together to resist the government and its efforts to stifle legitimate trade, according to Hayes.