📍Melbourne, Australia

We must resist digital currency

28 September 2025

For some digitalisation embodies the march toward progress. Those who appear skeptical about so-called technological advancements are criticised as being ultra-conservative, slow-to-adapt dinosaurs. Digital documents are much easier to manage than a messy paper trail, and the so-called smart phone plays an ever more integral role in administrative matters.

Anyone who follows my YouTube content will be aware of a clear tech minimalist opinion throughout my work. I don't review the latest iPhone (spoiler: it's the same as last year) or advocate the use of AI for everything. I mostly repurpose old tech, such as old ThinkPads to run home servers, and where possible I reuse components, laptops, drives and the like to new and novel lines of employment.

My contention is that technology has already reached its peak utility. In practicality, hardware peaked probably around 10 years ago. In the case of software, there has been very little in the way of progress for a long time, for example JavaScript frameworks are not only constantly changing, but indeed constantly regressing into niche spaces for tech weirdos to show off overly complex software design patterns.

My own site is built in HTML with CSS. Not because I don't know how to use React.js (aka the anti-christ) but because serving bundled spaghetti code with a myriad of dependencies is a regression over what dominated the internet not so long ago.

Systems ready

Travel to any airport these days and you will be met with facial biometrics and their attached gates. There is nothing like looking the soulless camera dead in the eye, knowing that some crude if statement is assessing whether you can embark on your next adventure. Such a cold and calculated process would make even a Stasi officer blush - if only they had held on a few decades!

But this year I spent around three months in Europe. I was reminded, as its a continent with which I am quite familiar, by its enduring stubbornness to technological change. This is a good thing. Cash is still the common form of payment, especially in the German-speaking space, and that cash represents power of the individual against the system. In the case of Europe, that system is indeed hostile, technocratic and soulless, and cash plays a pivotal and unrelenting role in the protection of its bearers.

To understand how bad a digital currency system would be, we don't need to strain our imagination. Systems similar to the airport one already appear all around us. When I wanted to ditch my smartphone, it became apparent that all of my multi-factor authentication relied on it, from bank accounts, to GitHub, to my government ID. Going back isn't really a choice, and if I were to reject it, it would be a considerable economic cost to myself.

Digital != Crypto

It's important to understand that the central bank digital currencies (CBDCs) are not cryptocurrencies. They are in fact the antithesis of cryptocurrencies. The intention of BitCoin and other adjacent solutions was trustless peer-to-peer settlement, which circumvented the need for a third party (such as a bank). Digital currencies are actually just massive, centralised ledgers. They are governed and controlled by third parties (the issuer, which is likely to be the central bank or the boss/dictator of the respective country).

Conversely, the closest thing to cryptocurrencies is cash, or cash equivalents (gold, silver, etc) which can be anonymously handed to another person in exchange for a good or service. You don't need permission to use cash (but you do need to be proximate). Digital currencies, however, rely on the issuer of that digital currency to approve, or allow a user onto the platform.

Some use cases are obvious, if you're not a good citizen - which they arbitrarily define -, then your digital currency holdings could be easily frozen. But that is a very simple and crude example.

Nevertheless, we already have historical examples of changes to monetary systems which have proven to be harmful. Governments have attempted to reduce the larger notes in supply (in Australia the $100 note is rarer and rarer) with the argument that it reduces laundering and criminal usage of cash (because large nominal amounts are more difficult to move around). In India in 2016 the Modi government simply banned larger note denominations, leading to lines at banks that lasted for in some cases days. In 2022, at the height of the pandemic restrictions in Canada, the government simply froze the bank accounts of those participating (see the trucker protests). In the UK similar de-banking measures have been well documented against so-called politically exposed people (PEPs).

Give the people what they want

Ironically, it is those who stand to lose the most from tyrannical digital systems who are the most blasé about their implementation. If you have been to any number of countries that impose internet restrictions you will be aware that the tech-savvy members of the population find a way through government controls pretty much no matter what.

As long as a certain percentage (depending on the situation) of the population are forced into using a certain app, or denied access to certain information, then the controlling entity will tolerate, to some extent or another, breaches to the rules. When I lived in Beijing for half a year, the firewall was mostly "loose", but got tighter when The Kid rode his train in from Pyongyang.

Proponents of central bank digital currencies point to the supposed efficiency gains of such a system, as well as its enhanced effectiveness against criminal elements in the anti-money laundering and counter terror space. But such arguments fail to acknowledge that truly efficient systems would do away with surveillance altogether, and that the very existence of national or jurisdictional currencies are, by design, inefficient (we could all just go back to the gold standard if efficiency was the issue, where a single price globally would avoid all kinds of foreign exchange rent-seeking). All of this of course ignores the fact that sophisticated criminal actors would just avoid the system anyway, while do-good citizens would be stuck in its tyrannical web - which is the usual result of such policies.

New special market operations

In reality, control over digital currencies is likely to be wielded in a more sophisticated manner. Imagine a recession, the central bank will cut interest rates in order to stimulate borrowing and consumption (yes, we always need to be in debt as I have previously written about). If the powers that be had a digital currency at their disposal, encouraging (i.e. forcing) increased consumption would be trivial, as rules could be applied to your holdings such as bonus purchasing power until some future date, only allowing the currency to be used for certain purchases, or simply deleting digital currency on some announced date if it is not "circulated" (forcing you to use it or lose it).

Right now, banks and financial institutions need to compete for your savings through financial products and competitive interest rates. Banks with a perceived robust credit strength are more attractive (people trust HSBC more than the Bank of Beirut). When you deposit your cash into a bank you are making a statement that this institution is where you want to keep your money.

During the 2007-08 financial crisis, a bunch of fat bankers rushed to Washington D.C. demanding a bailout, which was ultimately granted by President Obama who, along with others in his administration was completely out of his depth (not that the other guys would have been any better).

Those financial institutions were bailed out. But now consider a digital currency system where every single transaction and token is traceable and controllable from some central database. Under such a system, funds could have simply been shuffled around and frozen to ensure that all market participants were solvent. No bailout needed, just some recalibration of the database and voilà!

Be careful what you wish for

Many countries are considered advanced in the digital payment space (Sweden and Australia are basically cashless) although to call such systems advanced is quite generous (the fact is that such systems aren't all that sophisticated and that China has had superior systems like WeChat pay and AliPay for as long as I remember).

Ultimately, as with most things, the tech is simple - a digital euro is just a database. The real driver around the adoption of digital currencies will be cultural. German society has historical context around monetary systems that other countries just do not have. Ultimately though, habits are formed through convenience and practicalities. Hong Kong is a crypto hub because China is likely to face sanctions, and crypto will be the most convenient settlement system, while for Western countries which will end up sanctioning everyone, digital payments are likely to be adopted because they are the most frictionless day-to-day (until you have the wrong opinion).

Nevertheless, I hope that you dear reader, will join me in avoiding such a system for as long as we possibly can. Use cash, learn crypto, resist monetary tyranny. Stay strong and see you in the next one!