Risk Analysis: Central Bank Digital Currencies as a Mechanism for Authoritarian Control

A few days ago, I published an article, “Understanding Central Bank Digital Currencies (CBDCs): A Guide to the Core Concerns”. To continue on this theme, I am now publishing a more detailed risk analysis, which I hope will help in the understanding of these concerns.  

1. Introduction: Defining the "Digital Prison"

Central Bank Digital Currencies (CBDCs) are being promoted globally by central planners and globalist leaders as a necessary evolution of finance. However, a critical analysis reveals a far more troubling agenda. This report's central thesis is that CBDCs, far from being a simple technological upgrade, represent the final step in a multi-decade plan to establish what economist Richard A. Werner terms a "digital prison." This analysis posits that CBDCs are not an evolution but a deliberate architectural choice designed to enable unprecedented totalitarian control, leading to the complete erosion of economic freedom and individual autonomy.

A Central Bank Digital Currency is a digital currency issued directly by a nation's central bank, such as the Federal Reserve in the United States, the European Central Bank in the EU's eurozone, or the Bank of England in the UK. Unlike physical cash or commercial bank deposits, a CBDC would establish a direct, programmable financial link between the citizen and the state. This direct link forms the fundamental nature of the threat posed by CBDCs.

2. The Core Threat: The Shift to Absolute Centralized Control

To understand the strategic risk of CBDCs, one must grasp the fundamental philosophical shift they represent in the very nature of money. Physical cash offers anonymity and finality, serving as a direct, peer-to-peer medium of exchange that exists outside the immediate surveillance of the state. A CBDC system inverts this relationship, transforming money from a tool of personal empowerment into an instrument of total transparency and state control.

The primary risk is the establishment of what has been openly described as "absolute control." Agustin Carstens, General Manager of the Bank for International Settlements, has starkly articulated this objective:

"[A] key difference with the CBDC is that central bank will have absolute control on the rules and regulations that we determine the use... and we will have the technology to enforce that."

Carstens' statement is not a warning but a declaration of intent. It confirms that under a CBDC regime, money ceases to be a fungible asset of personal property and is redefined as a state-issued, revocable license for economic activity. Access to one's own funds becomes contingent upon compliance with an ever-changing set of state-mandated rules. This absolute control is not a theoretical bug but the system's core feature, implemented through specific technological tools of enforcement.

3. Mechanisms of Enforcement: Programmability and Algorithmic Micromanagement

The strategic significance of CBDCs lies in their unique technological features. These capabilities should not be viewed as neutral innovations but as potent instruments for social engineering and behavioural control, allowing the state to micromanage the economic lives of its citizens with perfect efficiency. The primary mechanisms for this control are as follows:

• Programmable Money The ability to program money is a key feature of a CBDC. Tom Mutton, a director at the Bank of England, has acknowledged that a CBDC could be programmed to be released only when certain conditions are met or to prevent activity deemed "socially harmful," adding that the final decision on implementing such controls should rest with government ministers. This functionality grants the state or an employer an effective veto over how an individual spends their money. Funds could be restricted by use, time, or location, transforming personal finance into a state-directed activity.
• Algorithmic Micromanagement Economist Richard A. Werner warns that under a CBDC system, spending decisions will be automated by algorithms with no right of appeal. If the state's algorithm determines a purchase is unapproved, the transaction will simply fail. As Werner states, "You just won't be able to use your money for certain things, and then there is nothing that you can do... That by definition ends freedom." This system allows the state to instantly and impersonally prevent citizens from using their funds for specific purposes, from political donations to non-sanctioned goods.
• Behavioural and Geographic Restrictions CBDCs provide the perfect tool to enforce compliance with broader social and political agendas, creating what Richard A. Werner explicitly calls a "digital prison." Werner states: "We are talking about dystopian digital prisons that will be created through central bank digital currencies, because the programmability... includes, of course, geography, and there is this proposal for... that people... should stay within their 15-minute walking small local area... It's a digital prison." This technology could also be used to track and enforce individual "carbon footprints," a service already being offered by companies like Mastercard. In such a system, purchases of items like beef or cheese could be automatically blocked once an individual's "carbon allowance" is exceeded, forcing compliance with state-defined consumption patterns.

While the mechanisms of programmability and algorithmic control may seem futuristic, the political will to weaponize finance against dissent is already established precedent, as demonstrated by the actions of Western governments.

4. Political Precedents and Global Trajectory

The potential for abuse inherent in a CBDC system is not theoretical. Historical precedents and current political momentum provide critical indicators of future risk, demonstrating that financial coercion is a preferred tool for suppressing dissent among Western governments.

4.1 Case Study: Financial Coercion in Canada

During the COVID-19 pandemic, the Canadian government provided a stark, real-world application of financial censorship. In response to the peaceful "Freedom Convoy" protest by truckers against pandemic restrictions, Prime Minister Justin Trudeau invoked the Emergencies Act. This act empowered the government to force commercial banks to freeze the bank accounts of protestors and their supporters without due process, effectively cutting them off from their own money to crush political dissent. This case study serves as a critical precedent, demonstrating that a Western democracy is willing to deploy financial coercion against peaceful domestic political opposition, thereby invalidating any claims that such powers would be reserved for only the most extreme national security threats.

4.2 The Diverging Paths of the US and EU

While the impulse toward financial control appears widespread, the political trajectories for CBDC implementation currently differ between the United States and the European Union.

Region  Stated Position and Actions

United States - The Biden administration was actively working toward the creation of a US CBDC. This momentum has been met with significant political resistance, culminating in a May 2024 House of Representatives bill passed to prevent the Federal Reserve from introducing one. Shortly after coming into office, President Donald Trump banned the establishment of a CBDC.

European Union - The EU is "barrelling ahead at full speed" toward a euro CBDC for its member states. The source material notes that the profound dangers of this project are not being discussed in mainstream European media. Official justifications, such as needing to "adapt to the digital age" or counter "geopolitical fragmentation," are described as "vapid" and intended to obscure the true purpose.

These government actions do not exist in a vacuum but serve a broader, top-down agenda for which CBDCs are the final and most critical component.

5. The Broader Agenda: Preconditions for a Totalitarian System

The global push for CBDCs should be understood within the wider context of coordinated, top-down policy implementation. According to the analysis provided, CBDCs are not an isolated initiative but the capstone of a much broader infrastructure of control that has been systematically constructed over time.

The CBDC framework cannot function without a universal Digital ID system to link every transaction to a specific, verifiable individual. Richard A. Werner argues compellingly that "vaccine passports" during the COVID-19 pandemic were a field test for this infrastructure, designed to normalize the link between social compliance and access to public life—a link that CBDCs would make absolute and inescapable. This coordination was evident in how governments across North America and Europe adopted nearly identical policies in a top-down fashion, without democratic debate.

This modern technological architecture fulfills an ideological blueprint articulated over a century ago. Karl Marx's call in his "Manifesto of the Communist Party" for the "Centralisation of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly" is no longer a revolutionary ideal but a practical policy objective achievable through the CBDC framework. It represents the final synthesis of technology and ideology required to realize a fully totalitarian system.

6. Conclusion: The Realization of the "Digital Prison"

This analysis concludes that the implementation of a Central Bank Digital Currency is the single greatest threat to economic and personal freedom in the modern era. By transforming money from a tool of individual liberty into a programmable token of state-permissioned credit, CBDCs provide the architecture for total social and political control. The system grants central planners’ mechanisms for algorithmic micromanagement, behavioural enforcement, and the instant suppression of dissent.

The ultimate warning comes from economist Richard A. Werner, who states that the power granted by CBDCs is one that "even the worst dictators of past centuries could only have dreamt of."

Ultimately, the implementation of Central Bank Digital Currencies represents a non-negotiable termination of personal and economic freedom. It is the final and most crucial component required to construct a "dystopian digital prison," a society where the citizen is entirely subservient to the algorithmically enforced and politically motivated whims of the state.