Summary of the CBDC episode (money with control or freedom?) - What a CBDC is: a central bank–issued digital form of money that complements, not replaces, existing money and the payment system. It aims to improve payment speed and inclusivity, with public policy backing and rules. - Real-world pilots: China’s digital yuan is widely used in stores; the EU is testing a digital euro; the US Federal Reserve is researching but has not launched a general retail version. Each country weighs efficiency against privacy and data protection. - Key distinctions: CBDCs are backed by the state and are designed with policy controls, whereas private cryptocurrencies are often decentralized and can be volatile. CBDCs may offer liquidity and fewer intermediaries but could entail more surveillance and per-use restrictions. - Notable features and questions: offline payments (possible with some designs) and programmability (rules on how money can be used) raise debates about privacy and social policy versus freedom of choice. - Three practical impact axes: - Payment speed: near-instant transfers within a country and lower costs for merchants. - Security and privacy: requires strong infrastructure and clear data rules; raises concerns about surveillance. - Financial inclusion: could broaden access but needs robust implementation. - Practical guidance for individuals and businesses: - Check if your country has a CBDC pilot or retail version and learn usage conditions. - Strengthen digital security (strong passwords, 2FA, hardware wallets where allowed). - Understand privacy vs traceability and review data policies. - Merchants: assess costs and settlement times; entrepreneurs: explore incentives and inclusion programs. - Broader implications: a potential mix of government nudges through spending rules with direct subsidies, raising questions about the balance between public policy goals and individual freedom. - Interoperability trend: move toward a more unified payment ecosystem across platforms, though trust also depends on clear rules and user-friendly design. - Core question: money with control or freedom? There is no single answer; it depends on priorities like security, efficiency, privacy, and the state's role in the economy. - Takeaway: CBDCs could improve everyday payments and reduce costs, but they introduce dilemmas about who controls what can be bought and when. Use and policies should aim to protect privacy where possible while enabling efficiency and inclusion. Remeber you can contact me at andresdiaz@bestmanagement.org