CBDCs - more aid to financial insiders?

Suddenly, the news is full of reports of advances in central bank digital currencies (CBDCs). After dull reports piling up for years and earnest working groups investigating the various uses of digital money, the last six months has seen every major central bank falling over themselves to tell us they are happy for their currency to go digital. Of course they are. With policy-makers completely out of ideas for boosting economic growth, a digital currency at least offers them the ideal route to expropriate anyone they deem worth fleecing. Why worry about the generation of societal wealth when you can steal it?

Though perhaps we don't need to worry about general expropriation or the complete loss of privacy quite yet. As I wrote here a couple of days ago, central banks money is already used extensively in securities settlement for 'professionals'. And the more Quantitative Easing from central banks, the less room for conventional credit creation on banks balance sheets.

Continuing this move towards a state intervention into all things economic, most plans for CBDCs seem to focus on settlement of financial transactions rather than replacement of cash. The Swiss National Bank, the Bank of England, the ECB and other central banks have all investigated how digital currencies may improve the efficiency of settlement.

Before we congratulate our central bankers on allowing us to continue with cash a bit longer, maybe we should be asking why we need to facilitate more financial intermediation when the existing very active 'professional' financial intermediation does not appear to have added to economic wellbeing of the 'amateur' public.