Attendees at the World Economic Forum’s Summer Davos summit last month held several discussions in which they promised to amplify authoritarian measures.
The three-day conference, also called the Annual Meeting of the New Champions, took place June 27–29 in Tianjin, China. Over 1,500 government, corporate and academic leaders attended, including a large delegation from Saudi Arabia.
Chinese Premier Li Qiang kicked off the summit with an address in which he called for more globalization and said there will be more public health crises.
“COVID-19 will not be the last public health crisis humanity faces. Global public health governance needs to be enhanced,” said Qiang.
Other notable moments included a panel discussion titled “China’s Economy: The Big Rebound?” during which Cornell Professor Eswar Prasad advocated for governments using central bank digital currencies to control citizens’ purchases.
A central bank digital currency (CBDC) is a digital currency issued and governed by a central bank. In the case of the United States, a CBDC would be a digital currency issued and controlled directly by the Federal Reserve.
CBDC is like cash in that it is backed by the Fed and its value is manipulated by the Fed’s monetary policies. However, whereas cash transactions are anonymous, CBDC transactions are not, as confirmed by Federal Reserve Chairman Jerome Powell.
But anonymity would not be the only casualty of CBDC. Digital currencies offer governments the “benefit,” says Prasad, of controlling what taxpayers purchase.
“If you think about the benefits of digital money, there are huge potential gains. It’s not just about digital forms of physical currency. You can have programmability [like] units of central bank currency with expiry dates,” he said.
“You could have . . . a potentially better — or some people might see it, a darker — world, where the government decides that units of central bank money can be used to purchase some things but not other things that it deems less desirable, like say, ammunition or drugs or pornography or something of the sort. And that is very powerful in terms of the use of a CBDC.”