Expiry dates and restrictions on “less desirable” purchases are some of the key advantages behind central bank digital currencies (CBDCs), according to an economist at a World Economic Forum (WEF) event.
The WEF hosted the 14th annual Meeting of the New Champions in Tianjin, China, also known as Summer Davos. During one of the 30-minute panel discussions on June 28, Cornell University professor Eswar Prasad explained that the global economy is “at the cusp of physical currency essentially disappearing” and that programmable CBDCs and the technology behind these new forms of money could take the international economic landscape toward a dark path or a better place.
Prasad contended that one of the “huge potential gains” for the digitization of money is the programmability of CBDC units and attaching expiry dates. Governments can also utilize central bank money to socially engineer society.
The author of “Gaining Currency” and “The Dollar Trap” purported that CBDCs possess unique characteristics and could be employed “as a conduit for economic policies in a very targeted way, or more broadly for social policies.”
“That could really affect the integrity of central bank money and the integrity and independence of central banks,” Prasad stated. “So, there are wonderful notions of things that can be done with digital money, but again I fear the technology could take us to a better place, but equally has the potential to take us to a pretty dark place.”
CBDC Expiry Dates
Integrating expiry dates with CBDCs has already been discussed by various central banks worldwide.
The Bank of Canada (BoC) published a paper in 2021 entitled “Best Before? Expiring Central Bank Digital Currency and Loss Recovery.” The institution weighed the pros and cons of expiration dates, asserting that an expiry date would “automate personal loss recovery.”
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