What’s happening: G20 leaders under India's current presidency have agreed on a plan to introduce digital currencies and digital IDs for their citizens. The G20 includes the world's top rich and developing countries.
Why it matters: Analysts are raising red flags about central bank digital currencies, warning they could harm privacy and individual freedoms. They point to China as an example, where digital currency has led to increased government surveillance and full control over citizens’ purchases.
- Zoom in: The G20's agreement leans on India's recent trials with its own digital currency as a model. While India praises these trials as successful, they coincide with the Reserve Bank of India pushing for a ban on cryptocurrencies.
Domestically: The Biden administration backs the idea of a U.S. central bank digital currency. Last month, the Federal Reserve unveiled plans for FedNow, a government-operated payment service similar to Venmo.
- But, some are aware of the danger. Governor Ron DeSantis announced first-in-the-nation legislation to prohibit the use of federal or foreign CBDCs as money, in a bold attempt to get ahead of the trend toward creating cashless societies.