Did you know that cryptos have emerged as a handy tool for government surveillance purposes? Today, as nations are making a beeline to launch their own digital assets to compete against the Bitcoin, in the process, they are trying to find new ways to keep a tab on their people.
How governments are conducting surveillance using digital currencies:
China had announced its decision to distribute about a million to a chosen few citizens so as to test its currency, a digital version of the Chinese Yuan. Citizens who were given the free money considered themselves rather fortunate and spent the coins at will, lauding the authorities for a seamless payment system. But the downside was the recipients needed to spend this money within a stipulated time-period; else it would vanish. Moreover, this experiment was designed to deploy a new system of surveillance where the state got the power to track citizen’s financial transactions. So, unknowingly, common people got money for free but came under control of the government.
Digital currencies have advantages because central bankers and economies can coordinate financial policies and benefits in real time. They can therefore give money instantly to those who need it. However, this is a double-edged sword where the data automatically reaches surveillance-happy authorities. If you put this kind of control in the hands of an authoritarian regime, the entire purpose of having a cryptocurrency is defeated.
Cryptos like the Bitcoin were launched so that these would be free from government intervention or surveillance. This is because governments, banks, and financial institutions fuel corruption, contributing to inflation. Cryptos were supposed to be inflation-proof since the purpose was to have a payment system that rests on cryptographic proof.
Mining cryptos involved sophisticated calculations which demanded a huge amount of electricity and computing power. This has plagued the crypto payment system as has the fact that in spite of a trustless system, there have been incidents of frauds and hacks. For advocates of cryptocurrencies, these concerns were negligible given that cryptos gave opportunities to get rick quickly. This is why crypto markets flourished as speculations rose and fear of inflation made people opt for cryptos and crypto trading. One of the main reasons for people to adopt cryptocurrency trading is the easy access of trading bots like bitcoin code. These bots carry out the entire trading process on your behalf and generate maximum profit. To know more visit, the bitcoin code coincierge.de and be a part of bitcoin trading. Governments soon started to look at this development as a challenge to their hold over financial policies and their sovereignty. Countries like India have proposed to ban crypto mining altogether while others are trying to regulate these and make sure they align with their mainstream banking systems.
China has been pushing for a digital currency even in 2014 but other countries only recently woke up to this when Facebook announced its intent to launch the Libra. Earlier, cryptos like the Bitcoin had scared governments but Facebook’s decision raised new concerns. It would mean the emergence of an unregulated monetary authority with global reach that no government could possibly match. China, on its part, felt threatened because Tencent and Alibaba had cornered its digital payment market. These companies were now processing 90% of mobile transfers and gathering all attendant data. China had to put an end to this and decided it needed a viable CBDC.
For the US, the problem is slightly different. Many Americans still lack access to bank accounts and easy payment systems. This can be resolved by introducing digital currencies. But US’s digital banking infrastructure already engages in invasive surveillance. For them, bringing in a new crypto that generates even more volumes of data for their government is not a solution. Rather, monetary policies must be made democratic. Those who wish to use digital banking should be given access to these, minus the control and surveillance.