I worry that the "programmability" of a central bank digital currency will make it easier for the government to confiscate the money of people it wants to target or to enforce negative interest rates by having money disappear at a specified rate.
The CBDC(Central Bank Digital Currency) Retail (CBDC-R) pilot currently enables Person to Person (P2P) and Person to Merchant (P2M) transactions. It is now proposed to enable additional functionalities of programmability and offline capability in CBDC retail payments. Programmability will facilitate transactions for specific/targeted purposes, while offline functionality will enable these transactions in areas with poor or limited internet connectivity.
Also fungibility! I’m equally concerned about the specific “purpose“ and “time duration”, the Deputy T Governor gave an example to the press., quoting from the article:
“Let’s say a school has given money to a student who won a prize to buy books in a particular bookshop. So the student can only use this money for that purpose.
But as soon as the book is purchased and the currency goes to the bookshop owner, it becomes fungible again.
So it’s only for that period the fungibility of money becomes limited.
If the student chooses not to spend the money, it goes back to the school and it becomes fungible again.
So programmability does not militate against fungibility but rather, just puts it on hold.”
