Big Brother Could Watch Your Money: The CBDC Threat


In recent years, the financial landscape has witnessed a simultaneous rise in interest in both decentralised and centralised finance trends. Decentralised finance (“DeFi”) offers services, like lending, borrowing, trading, and insurance, without the need for traditional intermediates like banks – challenging conventional financial norms.

Alongside DeFi, interest in the greater centralisation of finance through Central Bank Digital Currency (“CBDC”) has grown. 130 countries representing 98% of global GDP are now exploring CBDCs. Locally, the Monetary Authority of Singapore (“MAS”) has been actively experimenting with CBDCs since 2016.

CBDCs Unveiled: The Digital Transformation of Currency

CBDCs represent a potential evolution in money. They are essentially digital currencies backed by central banks, that utilise blockchain technology. CBDCs are issued by the respective country’s central bank and are one-for-one exchangeable with government-declared legal tender.

You might even think of them as PayNow on steroids.

At the forefront of CBDCs are concepts like Programmable Payment, Programmable Money, and Purpose-Bound Money (PBM).

First, Programmable Payments are digital transactions that automatically execute when certain conditions are met. Programmable Money goes a step further by embedding specific rules directly within the digital currency itself. This means the money can have built-in guidelines dictating how, where, when, or even for how long it can be spent. When the money is transferred between parties, the specified guidelines follow the money as well.

Lastly, PBM is a specialised digital currency designed for a specific use or objective. Unlike general-purpose money, PBMs function like vouchers with a designated purpose, such as getting a discount, availing a specific service, or buying a particular kind of product, just like your how your CDC Vouchers work. PBMs incorporate features from both programmable payments and programmable money.

For example, PBMs can have conditions on their use, much like a voucher’s terms and conditions – a programmable payment feature. PBMs can also be transferred between people, allowing others to use PBMs per its terms, a programmable money feature. These PBMs might be issued for specific purposes, like government disbursements.

So it may very well be the case that your Baby Bonus funds could be restricted to buying milk, diapers, and other baby-related items and services only.

The Authoritarian Potential of CBDCs

CBDCs differ from physical money, notably in the areas of control and oversight, and free spending. From a control and oversight perspective, CBDCs, backed by central banks, enable real-time tracking of every transaction. Goodbye privacy, hello panopticon.

Governments could instantly monitor every CBDC transaction. In contrast, physical cash provides a degree of anonymity. Once it’s out in the world, its movements are challenging to track unless manually recorded.

Regarding free-spending, CBDCs are restrictive as governments can impose limitations and conditions on their use. In contrast, physical money offers greater spending flexibility. It can be used almost anywhere it’s accepted, without any inherent spending conditions attached. The characteristics of CBDCs contribute to authoritarian fears as the “real danger in CBDCs is that there is no limit on the level of control that the government could exert over people if money is purely electronic and provided directly by the government”.

CBDCs inherently allow for real-time transaction monitoring. Every inflow and outflow in an individual’s account could be tracked, effectively diminishing the traditional privacy associated with financial transactions. This offers governments an unprecedented level of oversight over financial transactions.

This capability could extend into a broader surveillance apparatus extending beyond mere financial oversight. It raises the alarming possibility of a dystopian social credit system that uses CBDC transaction data to discern other aspects of individual behaviour (such as social conformity, ‘risky’ behaviour against the establishment, and political affiliations) which determines the level of societal freedom enjoyed.

This risks are not merely theoretical. Consider China’s developing Social Credit System, where individuals, businesses and government officials are regulated through fluctuating social credit scores rating their “trustworthiness” that corresponds to rewards and punishments. For instance, a journalist, writing about government censorship and corruption, found himself on the official blacklist of Dishonest Persons and was hence restricted from buying plane tickets, travelling some train lines, buying property, or taking out loans.

The centralised architecture of CBDCs, while promising enhanced efficiency and modernisation, presents possible authoritarian risks. Its structure equips governments with a suite of tools that can be wielded to exert control over citizen behaviours deemed as undesirable.

Consider all the drama that just happened in Canada in 2023.

For instance, real-time oversight could be used to instantly confiscate dissidents’ funds under the guise of combatting suspicious illegal activities. Further, governments could leverage the programmability of CBDCs to exclude certain individuals or entities from participation in the financial system. This effectively weaponizes financial exclusion and the threat of it as a tool to suppress dissent.

Separately, using Singapore’s Vaccination-Differentiated Safe Management Measures as an example, where access to workplaces and shopping malls was contingent on vaccination status, the spending of CBDCs can have embedded spending criteria. Just as certain vaccination status had to be met before individuals could enter specific venues, if individuals don’t meet these criteria for spending CBDCs, they could be barred from spending, thus pressuring them to conform with the government’s policy agenda.


In Singapore, the introduction of a retail CBDC, which would serve as a digital equivalent for physical cash for everyday transactions for the general public, is still far from realisation. The MAS’ latest exploration into CBDCs for domestic retail payments, Project Orchid, concluded that “the case for a retail CBDC in Singapore is not compelling for now”.

One wonders, however, if Be@rbricks and anti-money laundering needs, among other catalytic incidents, coupled with an almost entirely digitally connected population, may eventually provide a compelling reason to move in that direction.

That’s not to say that 2024 will see no CBDCs coming online in Singapore at all since digital money trials; and a plan to issue a “live” central bank digital currency (CBDC) for wholesale settlement are well underway.

On a global scale, it’s uncertain whether future monetary systems will lean towards the convenience of a centralised financial system controlled by banks and politicians, or gravitate towards the privacy and autonomy DeFi offers.

As the financial landscape evolves, it is crucial to remain watchful and observe its influence on governance and society. While innovations like digital identification, biometric immigration, and palm payments are exciting, we should not be too hasty in embracing the latest trends without carefully considering their potential risks to privacy and liberty.

Regardless Singapore is an independent media outlet fueled by private donations.

This article was made possible by a private donation from Melissa, a primary school teacher.

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