The G20, currently under India's presidency, adopted a final declaration on the subject over the weekend in the Asian nation's capital. However, this decision naturally incited major anxieties given its potential as a mechanism through which governments can keep tabs on their citizens' spending habits and stifle opposition. According to the group, discussions are already underway to create international regulations for cryptocurrencies. However, many are alarmed by the potential grooming of said digital money through government-aided regulation, which could subsequently lead to the replacement of these decentralized digital currencies with state-controlled Central Bank Digital Currencies (CBDCs) that could override privacy and security attributes.
In the summit, India's Finance Minister Nirmala Sitharaman pushed for the necessity of a global construct to effectively map crypto assets regulation. She said: "India's presidency of G20 has put on the table key issues related to regulating or understanding that there should be a framework for handling issues related to crypto assets." In fact, the International Monetary Fund (IMF) and Financial Stability Board (FSB) have submitted synthesis paper on crypto assets.
"Crypto is a threat as well as an opportunity. But crypto is also an example to say how unless global cooperation works out well, you are not going to be able to have a responsible financial ecosystem which can regulate it as well," Sitharaman pointed out. However, critics are still skeptical of the idea of extensive monitoring of cryptocurrency and argue that this might grant governments the master keys to manipulate social credit scores and control the monetary spending of citizens.
Other important points deliberated during the gathering included technological public infrastructure, the digital economy, as well as crypto assets and digital currencies of central banks. Gita Gopinath, first deputy managing director of the IMF, tweeted on X, formerly Twitter, that the G20 "helped shape a global perspective on how policymakers should deal with crypto assets."
European Commission President Ursula von der Leyen mirrored Sitharaman's sentiments on the need for a global regulatory body for technological advancements like digital money as well as artificial intelligence (AI), and digital ID systems, akin to the Wuhan coronavirus (COVID-19) vaccine passports.
Moreover, the European Union is currently trying to introduce a bloc-wide "digital identity" application that would consolidate various personal information, including passports, driver's licenses, and medical history. "The future is digital. I passed two messages to the G20. We should establish a framework for safe, responsible AI, with a similar body as the [Intergovernmental Panel on Climate Change] for climate. Digital public infrastructures are an accelerator of growth. They must be trusted, interoperable & open to all," Von der Leyen posted on her social media account.
Back in May, the Cato Institute 2023 CBDC National Survey found that only 16 percent of Americans support the adoption of a CBDC. They also found that twice as many of them oppose (34 percent) the Federal Reserve offering the digital payment system. Nevertheless, the plurality of Americans (49 percent) has not formed an opinion. This likely stems from the fact that only 28 percent of Americans are familiar with CBDCs and 72 percent are not. (Related: Only 16% of Americans would support adoption of CBDC, survey finds.)
Also based on the poll's results, despite Americans regularly using digital dollars via credit cards, debit cards, and other digital platforms to purchase things, they think that digital money is more of a liability of the private commercial bank (e.g., Bank of America or Chase Bank) that issued them. However, a CBDC would be a liability of the government's central bank, or the Fed. Thus, a CBDC would create a direct link between citizens and the government's central bank.
While strong majorities of both Democrats and Republicans are unfamiliar with this form of currency, Republicans are slightly more familiar (34 percent) than Democrats (25 percent) and independents (25 percent). However, Democrats are about twice as inclined (22 percent) to support adopting a CBDC than Republicans (11 percent). Interestingly, a majority (53 percent) of Republicans oppose a CBDC, while most Democrats (56 percent) don't have an opinion, and 22 percent are opposed. When benefits and risks are considered, both political parties are wary of a CBDC.
Meanwhile, men are about twice as likely (22 percent) as women (11 percent) to support it. Black Americans are nearly three times as likely (32 percent) as white Americans (13 percent) to accept it, who are more likely than Hispanic Americans at 20 percent. Also, the youth are about 10 times more supportive of a CBDC than those in their senior years. Nearly a third (32 percent) of people under age 30 support a CBDC compared to 25 percent of 30–44-year-olds, eight percent of 45–64-year-olds, and three percent of Americans over 65. While about half of all age groups don't have enough information to support or oppose the United States adopting a CBDC, about half of Americans over age 55 oppose it.
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