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The implications of CBDCs extend beyond just innovation in payment systems; they raise concerns regarding personal freedoms and governmental control. Augustine Carstens, the Managing Director of the Bank for International Settlements (BIS), reiterated these apprehensions in a well-circulated video statement. He pointed out that CBDCs would fundamentally alter how currency usage is monitored and regulated.
Carstens indicated that while cash transactions allow for anonymity, CBDCs will enable central banks to enforce strict regulations over how digital currencies are utilized. This could potentially lead to governmental overreach, where the authorities could restrict or block individuals from accessing their digital funds based on their compliance with prevalent laws.