Is Your Money Safe from Big Brother? The Shocking Truth About CBDCs and Financial Privacy

In the Brief:

  • Financial surveillance is common
  • Governments can access citizens' financial information without a warrant
  • CBDCs are being developed to make financial surveillance easier
  • CBDCs could increase government control over finances and raise privacy concerns

3 - 5 minute read

Financial surveillance is a form of government and corporate surveillance that is just as prevalent as cameras on street corners, collecting emails, or listening to conversations through smart home devices. In a recent episode of The Agenda podcast, Jonathan DeYoung discussed financial surveillance with Marta Belcher, a cryptocurrency and civil liberties attorney who serves as president and chair of the Filecoin Foundation and general counsel and head of policy at Protocol Labs. Belcher shed light on the ins and outs of financial surveillance in the United States and why governments are turning away from cash in favor of central bank digital currencies (CBDCs).

“The government can get basically any information about us, and it’s rendered the Fourth Amendment useless.”

Belcher explains that the Fourth Amendment in the U.S. Constitution requires law enforcement to have a warrant signed by a judge based on probable cause of suspecting someone of a crime to get information about a person. However, under the “third-party doctrine,” the U.S. government can collect any information voluntarily handed over to a “third party” such as a bank without a warrant or probable cause. With the Bank Secrecy Act requiring banks to collect extensive customer information, the government ends up with a significant amount of information on the financial lives of citizens.

While some individuals may not care about such vast amounts of information being collected about them, Belcher warns that this is a limited perspective. The law could change at any point in time, and an administration could change too. Therefore, it is essential to make transactions that the government cannot see.

“You may think you have nothing to hide right now, but at any point in time, the law could be different. At any point in time, an administration can change. And I think that it is important, and people are starting to understand why it’s important, to be able to make transactions that the government can’t see.”

CBDCs are controversial, with some arguing that countries must digitize their currencies to remain competitive, while others condemn governments having greater control over individuals’ finances. Belcher believes that a significant reason governments worldwide are developing CBDCs is to make financial surveillance easier. These programs are part of broader initiatives to phase out cash and other untraceable transactions.

In addition to expanded surveillance, the potential ramifications of adopting CBDCs go beyond control. Governments could theoretically not only create but revoke money, alongside controlling how and where individuals spend their funds. This is a terrifying thought for Belcher, and she warns that it could lead to a surveillance society.

The Bottom Line

Financial surveillance is a form of government and corporate surveillance that is just as prevalent as other forms of surveillance. The move towards CBDCs could increase government control over individuals’ finances and lead to a surveillance society that controls money. Traders must be aware of the risks associated with investing in CBDCs and carefully consider the implications before making any investment decisions.

Disclaimer: The content in this article is provided for informational purposes only and should not be considered as financial or trading advice. We are not financial advisors, and trading carries high risk. Always consult a professional financial advisor before making any investment decisions.

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