A digital currency that can be deleted or transferred, accounts that can be funded or closed without the user having control… The first features of the Brazilian Central Bank’s digital currency project raise questions. How much control will the state have over digital wallets?
Brazil’s central bank digital currency (MNBC) in question
Are central bank digital currencies (MNBC) vectors of financial inclusion, or government monitoring tools? This is one of the questions raised by the rapid evolution of the sector, at a time when almost all central banks in the world are working on digital versions of their currencies.
In Brazil, some features of the MNBC project thus generated a certain distrust. A developer examined the source code of the future digital currency, and saw some unexpected features. It would indeed be possible for the people who control the portfolio to play on certain mechanisms. They could delete accounts, freeze assets, increase or decrease the account balance, or even move tokens to external addresses. This, without prior authorization from the account holder.
What this means is that the people responsible for this digital currency, i.e. the Central Bank of Brazil, would have full control over user funds. And that of course raises quite broad issues, with real issues of democracy.
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The Central Bank confirms the existence of these options
Questioned by the media, the Central Bank confirmed that these options were indeed written into the code… But that it did not yet know if they would appear in the final version of the MNBC. She also claims that features of this type already exist in “classic” finance:
“The Central Bank and Institutions already have similar functionality in the current systems environment.s [financiers]their use being governed by the law and regulations in force.»
Is it therefore legitimate for the State to control to such an extent the movements of funds of the users of an MNBC? Does financial inclusiveness really exist? if you don’t have final control of your funds? All these questions will continue to be asked, and not just in Brazil. Central bank digital currencies indeed represent a new era, and the ethical questions that this raises will be important milestones for the economic freedom of the populations concerned.
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