Previously, we have featured an opinion piece as to how central bank digital currencies (CBDCs) can be potentially transformed into a tool for financial profiling. Recently, one more concern is being floated around about how it could also give rise to digital authoritarianism.
This article explores the concept of digital authoritarianism, its potential implications, and the global shift towards a cashless society. It draws inspiration from various sources, including the latest report of Crisis Magazine.
The Era of Digital Authoritarianism
Various sources describe “digital authoritarianism” as a system that encompasses a new economic and societal transaction model. This model, characterized by extensive government control, has the potential to erode privacy and curtail individual freedoms.
In relation to this, it is important to understand the three major components driving the phenomenon, including CBDCs, social monitoring systems, and the push towards a cashless society.
Central Bank Digital Currencies (CBDCs)
CBDCs are government-backed digital currencies issued by central banks, representing a digital form of traditional national or regional currencies. Several countries have already adopted these digital currencies, and many others are exploring their implementation.
While they offer certain benefits, such as increased efficiency and transparency, there are concerns regarding the potential loss of privacy and the centralized control exerted by governments over financial transactions.
Social Monitoring Systems
Simultaneously, the rise of social monitoring systems amplifies the reach of digital authoritarianism. In countries like China, advanced technologies such as facial recognition and artificial intelligence are utilized to track and monitor citizens.
These systems collect vast amounts of personal data, including employment records, online activities, and even individual movements. The data is then processed to assign a “social credit” score, which rewards compliant behavior and punishes dissent.
The Road to a Cashless Society
The transition towards a cashless society further reinforces digital authoritarianism. Mobile payment technologies and digital wallets have gained widespread adoption, particularly in China, where even street beggars employ QR codes to solicit assistance.
As cash becomes obsolete, individuals without access to digital payment methods may face significant challenges in their daily lives. Furthermore, the emergence of facial recognition payment systems poses additional privacy concerns.
Global Implications
China, as a pioneer of digital authoritarianism, has exported its model to countries like Iran, Cuba, and Venezuela. The United Nations, along with international bodies like the International Monetary Fund (IMF), is also advocating for the adoption of digital identification and comprehensive CBDC platforms worldwide.
The potential worldwide expansion of digital authoritarianism raises concerns about the erosion of civil liberties and the abuse of power.
Risks and Concerns
While the adoption of fintech, mobile wallets, and digital currencies offers convenience and efficiency, the risks associated with digital authoritarianism outweigh the gains. By centralizing control over money and transactions, governments possess the ability to manipulate and monitor citizens.
This control can be abused, potentially leading to the demonetization of individuals based on their perceived threats or objections, curtailing their access to funds for essential needs.
Potential Impact on Society
The implications of digital authoritarianism extend beyond financial control. The threat of being denied access to money can instill fear and result in self-censorship. With the collaboration of government-influenced social media platforms and technology giants, the monitoring and enforcement of information can be further enhanced.
Vulnerable segments of society may be coerced into relinquishing their rights in exchange for basic financial support.
Final Thoughts
The rise of digital authoritarianism, exemplified by central bank digital currencies, social monitoring systems, and the global shift towards a cashless society, presents significant implications for privacy, freedom, and individual rights. It is crucial for societies to critically examine these developments and ensure the protection of civil liberties in an increasingly interconnected world.