For anyone who’s never experienced financial repression, it might sound like something from another dimension. In the U.S., Canada, Europe, and the broader democratic world, people may think a lot about finance, and they may think at least occasionally about repression, but the idea of “financial repression” is, still, generally alien. The Nicaraguan dissident Félix Maradiaga says this of it: “When we talk about financial repression, we’re talking about the systematic destruction of the things that give people dignity and independence in their lives.” It’s an evocative description of an otherwise almost unimaginable condition.
“Financial freedom,” on the other hand, has some currency. Which is usually about having opportunities, making decisions, or taking actions that can enable us and our families to flourish—to do more of what we want in life, with fewer obligations to unwelcome labor and a lower risk of financial setbacks becoming sustained adversity. It seems intuitive that there’d be a connection between the phenomenon of financial repression in dictatorships and financial freedom in democracies. But what is it?
Justin Callais is the chief economist at the Archbridge Institute and the editor at large for The Signal. Callais says the clue is right there in Maradiaga’s description of financial repression as he experienced it: The purpose of the “systematic destruction of the things that give people dignity and independence in their lives” isn’t just to crush dissidents specifically; it’s to incapacitate people generally. It’s to prevent them from cultivating a systemic threat to dictatorship—what their everyday counterparts in democratic life mean by financial freedom: the capacity to flourish …
John Jamesen Gould: Is there anything comparable in the democratic world to the kind of financial repression people experience in dictatorships?
Justin Callais: There is. As a whole phenomenon, financial repression is distributed in a hugely disproportionate way across autocracies versus democracies. Still, it’s a question for anyone who lives in the modern world and depends on the security of their finances at all—which is mostly everyone. And there’s a long history of democratic states taking aim at that security intentionally. Even recently, you saw it in Canada, a country with a strong tradition of democracy and the rule of law— as Roger Huang points out—when in 2022, without any judicial process, the government froze the bank accounts of people involved in disruptive protests against Covid mandates.
Of course, there’s a major difference—and not just in the scale of financial repression between democracies and dictatorships but in the categorical reasons for it.
Democracies typically impose fewer financial restrictions than autocracies because of their institutional foundations. In democracies, independent judiciaries protect property rights and limit government overreach, while political competition and free media create accountability mechanisms that discourage arbitrary financial controls over the population as a whole—but also the financial targeting of any individuals government authorities might not like. And quite simply, citizens in democracies can vote out leaders who implement financially repressive policies or power moves.
Dictatorships systematically lack these constraints and often use financial controls to maintain power, reward loyalists, punish opponents, and even prevent capital flight that might threaten regime stability.
Dictatorships systematically lack democratic constraints and often use financial controls to maintain power, reward loyalists, punish opponents, and even prevent capital flight that might threaten regime stability.
North Korea may be the most extreme example, where there’s complete state control over the economy, citizens are forbidden from holding foreign currency, and people face severe punishment for unauthorized transactions of any kind. Venezuela under Nicolás Maduro has imposed strict currency controls that criminalized unofficial currency exchanges, while hyperinflation destroyed people’s savings. As hyperinflation gripped Zimbabwe between 2007 and 2009, the government of Robert Mugabe confiscated bank accounts and savings, while forcing citizens to use rapidly devaluing official currency. Today, Belarus and Cuba severely restrict citizens’ ability to conduct foreign transactions. Burma’s military junta has frozen bank accounts and limited cash withdrawals. It’s a real pattern. The Soviet Union— that model twentieth-century autocracy—made the unauthorized possession of foreign currency a criminal offense, punishable by imprisonment.
In the West, there are strains of libertarian thought that see states of any kind as almost inherently repressive—democratic, autocratic, it doesn’t matter if the state is curtailing an individual’s total claim on his or her money and assets. Libertarians in this mode tend to see any and all state taxation as financial repression.
But that’s a pretty exceptional view. A lot of everyday people have what you could call libertarian tendencies. They might grumble about a government’s policy and its impact on their finances for one reason or another, but they generally don’t see themselves as subject to financial repression unless the government is really overreaching—or for some reason financially targeting individuals or groups outside the bounds of the law.
Donny Jiang
Gould: It might seem strict libertarians have a clearer view of what financial freedom means than a lot of everyday people: It’s individuals’ freedom to live with only the most minimal claims on their money and assets by the state—or by anyone who isn’t them. So how would most people, with more moderate libertarian tendencies, as you say, understand financial freedom?
Callais: Most people would understand it implicitly rather than explicitly—that is, rather than in terms of a clear philosophical definition. Which is normal. Most ideas we live by, we live by implicitly—and understand implicitly. No one introduced them to us fully baked with a whole intellectual theory justifying them.
I’d say most people understand financial freedom as effectively the other side of the way Félix Maradiaga describes financial repression: “the systematic destruction of the things that give people dignity and independence in their lives.” Most people think of financial freedom as the ability to have dignity and independence in their lives.
Which certainly means their government isn’t doing to them what the Nicaraguan government did to Maradiaga—or the Togolese government would too to Farida Nabourema. But it inevitably ends up meaning more than that.
Financial freedom understood simply as the absence of financial repression is a “negative” view—not negative in a bad sense, just in the sense that means the absence of something: the absence of constraint; no one’s taking your money or your stuff. Yet if you think of financial freedom as the ability to have dignity and independence, you’re imagining something more—a “positive” idea about having the capacity to flourish in life.
Most people understand financial freedom as effectively the other side of the way Félix Maradiaga describes financial repression: “the systematic destruction of the things that give people dignity and independence in their lives”—as the ability to have dignity and independence in their lives.
So the idea of financial freedom in democracies ends up including certain negative conditions: Citizens have legal protections against any arbitrary seizure of their money or assets, for instance. They can hold, exchange, and transfer currency—certainly domestic currency but also foreign currencies without excessive restrictions. They can engage in financial contracts without undue government interference. They can engage in international transfers without undue capital controls. And so on.
But it also goes beyond these and gets into positive conditions: Citizens have access to competitive financial services including banking, investment, and insurance products, for example. They can expect monetary stability that keeps inflation at manageable levels. They can expect a stable regulatory environment that prevents fraud and systemic risk. They can operate in competitive markets, free from monopolistic—or oligopolistic— control. They can even expect conditions for opportunity in the first place, such as we can get through financial literacy and access to information for informed decision making.
Altogether, these aren’t just conditions that eliminate repression; they’re conditions that enable human flourishing.
Gould: As most people understand financial freedom in democratic societies, then, there’s more to the idea itself than a lack of the kind of direct financial repression people experience in dictatorships.
Callais: There is, there’s more to it—but it’s important to remember: As dissidents like Félix Maradiaga experience financial repression in dictatorships, the point of it isn’t just to constrain them directly; it’s to prevent them from achieving their goals broadly. It’s to prevent them from making headway in creating the kind of society they’re trying to help create.
Gustavo Zambelli
Dictators using financial repression don’t just fear their immediate targets; they fear what their immediate targets want to build. Which is ultimately a society where financial freedom supports human flourishing for them and their fellow citizens in the ways they see it doing for people in democracies—however imperfectly.
We can think of it like freedom of speech or freedom of expression, in this sense—a kind of liberty most people in democratic countries understand, if not take for granted, as fundamental for democratic life.
One way of looking at freedom of speech, a very common way, is in terms of individual rights. People should be allowed to express themselves openly—again, within reasonable limits, which is an often-contested question—because it’s a right owed to them as individuals. We all recognize this language of rights and understand it. But it doesn’t necessarily capture everything people actually care about when they care about free speech. They care about a high-functioning political system that can absorb and act on criticisms. They care about a vibrant society, where people can share new ideas, take inspiration from them, adapt them to creative enterprises, and so on. They care about freedom of speech as an essential characteristic of what their society is meant to be—or in any event, of the kind of society they want to live in. They consider it an essential characteristic of a society that enables people to flourish.
Financial freedom is fundamentally the same.
As dissidents like Félix Maradiaga experience financial repression in dictatorships, the point of it isn’t just to constrain them directly; it’s to prevent them from creating the kind of society they’re trying to help create.
Gould: It seems digital technologies are converging significantly with both these constitutive democratic freedoms—financial freedom and freedom of expression. With financial freedom, when Farida Nabourema talks about the role of Bitcoin among dissidents in dictatorships, I can imagine it sounding to a lot of people, certainly in the West, almost as though she’s talking about something completely different from Bitcoin as they might know it. She’s talking about the latest in a line of technologies that she and her predecessors have used for getting around autocratic financial repression; people in the West are often thinking about a speculative asset—and what can seem an alarmingly volatile one at that. Do you see Bitcoin as essentially two different things in these different contexts, or does it potentially have a deeper relationship to financial freedom as you describe it?
Callais: It’s a complicated question, which I think it’ll take time for us all to develop clearer answers to, because the widespread adoption of Bitcoin is so new—and still emergent. But I think you can already see some through lines.
In autocratic regimes, as you say, Bitcoin represents a crucial lifeline for dissidents facing financial repression. Throughout the autocratic world, when governments freeze bank accounts, restrict currency access, or monitor transactions to punish political opposition, Bitcoin represents an alternative financial system beyond state control—because the blockchain technology it’s built on is beyond state control. When Farida Nabourema talks about the use of Bitcoin among frontline activists, she’s talking about it in this way—as a technology for transmitting resources.
And then there’s another important use case, which is related but distinct: For people living in countries like Venezuela or Belarus or Iran, Bitcoin can also be a way to preserve wealth against hyperinflation.
Nick Fancher
Autocracies can weaponize hyperinflation by using it basically as a stealth taxation mechanism, transferring wealth from citizens to the state through currency devaluation. The resulting economic chaos tends to eviscerate the middle class—typically the foundation of democratic movements—while dramatically increasing all citizens’ dependence on the state. Of course, regime loyalists get privileged access to foreign currencies and favorable exchange rates.
That reinforces patronage networks. Ordinary citizens, meanwhile, can become so consumed with daily survival challenges that political organizing becomes secondary. And the whole economic emergency means justification for more government intervention through price controls and nationalization, consolidating the regime’s economic and political power while giving them scapegoats for the crisis.
In both cases, in autocratic societies, Bitcoin can serve as an essential infrastructure for political resistance—but also for basic economic survival.
In democratic societies, with their established rule of law and financial systems, Bitcoin’s significance would seem in a way obviously different—more about enhancing choice than about providing essential protection. Citizens in democracies already have property-rights protections, stable currencies, and banking access. So for them, you could see Bitcoin as more supplemental than foundational—and its appeal centering more on philosophical and practical preferences than on need. Those might be a resistance to inflationary monetary policy, a desire for greater transaction privacy, reduced dependence on financial intermediaries, or protection against potential future infringements on financial freedom.
In autocratic societies, Bitcoin can serve as an essential infrastructure for political resistance—but also for basic economic survival.
But even in democracies, Bitcoin is already a potential check against government overreach, as well. It’s part of the economy now; its mere existence as an alternative monetary system could potentially discourage democratic governments from implementing excessive financial controls— not unlike the prospect of capital flight discourages governments from getting out of hand with monetary policy. Bitcoin is already establishing a financial baseline that governments around the world have to consider when creating and implementing regulations, potentially supporting financial freedom across autocratic and democratic societies in different ways.
Gould: You mention protection against potential future infringements on financial freedom. A notable specter in that category is the emergence of central bank digital currencies—CBDCs, digital versions of a state’s legal tender—which, Roger Huang points out, governments all around the world either are contemplating, are actively developing, or have already implemented. As Huang sees it, CBDCs represent a “fundamental reset in the relationship between an individual and the financial system they live in—establishing a direct connection between citizens and central banks.” How would you see it— and how would you understand the implications for democratic life, in turn?
Callais: I’d say it’d be hard to argue with the idea of CBDCs representing a fundamental reset in people’s relationship to the state; and I’d see it as representing the realistic possibility—if not probability—of financial repression coming from the margins to the center of democratic life.
The statistics on how much of the world is thinking about CBDCs or planning for them, or already have them, as you say—135 countries and currency unions, representing more than 98 percent of global GDP—are pretty striking. Less than a dozen have implemented them—China’s digital yuan is the standout—but every G20 country is exploring a CBDC, and at least 13 are already piloting one, including Brazil, Japan, India, Australia, Russia, and Turkey. So it’s quite real.
But what happens next is uncertain.
Isaac Burke
The logic for CBDCs in dictatorships is straightforward: They offer autocratic rulers even more control over their economies and—no less importantly—people. But as Huang says, the logic in democracies is complex: Their economies are intricate and complicated, requiring sophisticated policy design and decision making to manage well—meaning, they need a significant degree of technocratic oversight. And the mindset of technocrats is like the mindset of engineers. They don’t necessarily want to grab power in the way autocrats do; I’m sure most don’t. They just tend to see the world in terms of technocratic problems to solve, and by default, they’ll want whatever tools they can get for the job as they see it.
The problem is, the system effects of something like a CBDC—they don’t respect intentions. Or even mindsets. They essentially represent a new financial system arrayed around a new hyper-centralization of power, and any hyper- centralization of power has an autocratic logic, no matter what its architects might be thinking.
Fortunately, in democratic life, there’s a powerful counter-logic—a bottom-up logic in the idea of democracy itself, which chronically competes with the top-down logic of pure technocracy. Which just inherently resists the excessive centralization of power. Which is already interfering with the CBDC agenda in democratic societies, as Huang shows— notably in Canada, whose government used financial repression against its own citizens just a few years ago. And which is the same logic that makes financial freedom, like freedom of speech, so deeply a matter of shared common sense—even in times as politically divided as ours.
Justin Callais, PhD, is the Chief Economist at the Archbridge Institute. He leads the institute’s “Social Mobility in the 50 States” project and conducts original research on economic mobility, economic freedom, economic development, and institutional analysis. Follow his work @JustinTCallais and subscribe to his newsletter, Debunking Degrowth.
Economics of Flourishing
For anyone who’s never experienced financial repression, it might sound like something from another dimension. In the U.S., Canada, Europe, and the broader democratic world, people may think a lot about finance, and they may think at least occasionally about repression, but the idea of “financial repression” is, still, generally alien. The Nicaraguan dissident Félix Maradiaga says this of it: “When we talk about financial repression, we’re talking about the systematic destruction of the things that give people dignity and independence in their lives.” It’s an evocative description of an otherwise almost unimaginable condition.
“Financial freedom,” on the other hand, has some currency. Which is usually about having opportunities, making decisions, or taking actions that can enable us and our families to flourish—to do more of what we want in life, with fewer obligations to unwelcome labor and a lower risk of financial setbacks becoming sustained adversity. It seems intuitive that there’d be a connection between the phenomenon of financial repression in dictatorships and financial freedom in democracies. But what is it?
Justin Callais is the chief economist at the Archbridge Institute and the editor at large for The Signal. Callais says the clue is right there in Maradiaga’s description of financial repression as he experienced it: The purpose of the “systematic destruction of the things that give people dignity and independence in their lives” isn’t just to crush dissidents specifically; it’s to incapacitate people generally. It’s to prevent them from cultivating a systemic threat to dictatorship—what their everyday counterparts in democratic life mean by financial freedom: the capacity to flourish …
John Jamesen Gould: Is there anything comparable in the democratic world to the kind of financial repression people experience in dictatorships?
Justin Callais: There is. As a whole phenomenon, financial repression is distributed in a hugely disproportionate way across autocracies versus democracies. Still, it’s a question for anyone who lives in the modern world and depends on the security of their finances at all—which is mostly everyone. And there’s a long history of democratic states taking aim at that security intentionally. Even recently, you saw it in Canada, a country with a strong tradition of democracy and the rule of law— as Roger Huang points out—when in 2022, without any judicial process, the government froze the bank accounts of people involved in disruptive protests against Covid mandates.
Of course, there’s a major difference—and not just in the scale of financial repression between democracies and dictatorships but in the categorical reasons for it.
Democracies typically impose fewer financial restrictions than autocracies because of their institutional foundations. In democracies, independent judiciaries protect property rights and limit government overreach, while political competition and free media create accountability mechanisms that discourage arbitrary financial controls over the population as a whole—but also the financial targeting of any individuals government authorities might not like. And quite simply, citizens in democracies can vote out leaders who implement financially repressive policies or power moves.
Dictatorships systematically lack these constraints and often use financial controls to maintain power, reward loyalists, punish opponents, and even prevent capital flight that might threaten regime stability.
North Korea may be the most extreme example, where there’s complete state control over the economy, citizens are forbidden from holding foreign currency, and people face severe punishment for unauthorized transactions of any kind. Venezuela under Nicolás Maduro has imposed strict currency controls that criminalized unofficial currency exchanges, while hyperinflation destroyed people’s savings. As hyperinflation gripped Zimbabwe between 2007 and 2009, the government of Robert Mugabe confiscated bank accounts and savings, while forcing citizens to use rapidly devaluing official currency. Today, Belarus and Cuba severely restrict citizens’ ability to conduct foreign transactions. Burma’s military junta has frozen bank accounts and limited cash withdrawals. It’s a real pattern. The Soviet Union— that model twentieth-century autocracy—made the unauthorized possession of foreign currency a criminal offense, punishable by imprisonment.
In the West, there are strains of libertarian thought that see states of any kind as almost inherently repressive—democratic, autocratic, it doesn’t matter if the state is curtailing an individual’s total claim on his or her money and assets. Libertarians in this mode tend to see any and all state taxation as financial repression.
But that’s a pretty exceptional view. A lot of everyday people have what you could call libertarian tendencies. They might grumble about a government’s policy and its impact on their finances for one reason or another, but they generally don’t see themselves as subject to financial repression unless the government is really overreaching—or for some reason financially targeting individuals or groups outside the bounds of the law.
Gould: It might seem strict libertarians have a clearer view of what financial freedom means than a lot of everyday people: It’s individuals’ freedom to live with only the most minimal claims on their money and assets by the state—or by anyone who isn’t them. So how would most people, with more moderate libertarian tendencies, as you say, understand financial freedom?
Callais: Most people would understand it implicitly rather than explicitly—that is, rather than in terms of a clear philosophical definition. Which is normal. Most ideas we live by, we live by implicitly—and understand implicitly. No one introduced them to us fully baked with a whole intellectual theory justifying them.
I’d say most people understand financial freedom as effectively the other side of the way Félix Maradiaga describes financial repression: “the systematic destruction of the things that give people dignity and independence in their lives.” Most people think of financial freedom as the ability to have dignity and independence in their lives.
Which certainly means their government isn’t doing to them what the Nicaraguan government did to Maradiaga—or the Togolese government would too to Farida Nabourema. But it inevitably ends up meaning more than that.
Financial freedom understood simply as the absence of financial repression is a “negative” view—not negative in a bad sense, just in the sense that means the absence of something: the absence of constraint; no one’s taking your money or your stuff. Yet if you think of financial freedom as the ability to have dignity and independence, you’re imagining something more—a “positive” idea about having the capacity to flourish in life.
So the idea of financial freedom in democracies ends up including certain negative conditions: Citizens have legal protections against any arbitrary seizure of their money or assets, for instance. They can hold, exchange, and transfer currency—certainly domestic currency but also foreign currencies without excessive restrictions. They can engage in financial contracts without undue government interference. They can engage in international transfers without undue capital controls. And so on.
But it also goes beyond these and gets into positive conditions: Citizens have access to competitive financial services including banking, investment, and insurance products, for example. They can expect monetary stability that keeps inflation at manageable levels. They can expect a stable regulatory environment that prevents fraud and systemic risk. They can operate in competitive markets, free from monopolistic—or oligopolistic— control. They can even expect conditions for opportunity in the first place, such as we can get through financial literacy and access to information for informed decision making.
Altogether, these aren’t just conditions that eliminate repression; they’re conditions that enable human flourishing.
Gould: As most people understand financial freedom in democratic societies, then, there’s more to the idea itself than a lack of the kind of direct financial repression people experience in dictatorships.
Callais: There is, there’s more to it—but it’s important to remember: As dissidents like Félix Maradiaga experience financial repression in dictatorships, the point of it isn’t just to constrain them directly; it’s to prevent them from achieving their goals broadly. It’s to prevent them from making headway in creating the kind of society they’re trying to help create.
Dictators using financial repression don’t just fear their immediate targets; they fear what their immediate targets want to build. Which is ultimately a society where financial freedom supports human flourishing for them and their fellow citizens in the ways they see it doing for people in democracies—however imperfectly.
We can think of it like freedom of speech or freedom of expression, in this sense—a kind of liberty most people in democratic countries understand, if not take for granted, as fundamental for democratic life.
One way of looking at freedom of speech, a very common way, is in terms of individual rights. People should be allowed to express themselves openly—again, within reasonable limits, which is an often-contested question—because it’s a right owed to them as individuals. We all recognize this language of rights and understand it. But it doesn’t necessarily capture everything people actually care about when they care about free speech. They care about a high-functioning political system that can absorb and act on criticisms. They care about a vibrant society, where people can share new ideas, take inspiration from them, adapt them to creative enterprises, and so on. They care about freedom of speech as an essential characteristic of what their society is meant to be—or in any event, of the kind of society they want to live in. They consider it an essential characteristic of a society that enables people to flourish.
Financial freedom is fundamentally the same.
Gould: It seems digital technologies are converging significantly with both these constitutive democratic freedoms—financial freedom and freedom of expression. With financial freedom, when Farida Nabourema talks about the role of Bitcoin among dissidents in dictatorships, I can imagine it sounding to a lot of people, certainly in the West, almost as though she’s talking about something completely different from Bitcoin as they might know it. She’s talking about the latest in a line of technologies that she and her predecessors have used for getting around autocratic financial repression; people in the West are often thinking about a speculative asset—and what can seem an alarmingly volatile one at that. Do you see Bitcoin as essentially two different things in these different contexts, or does it potentially have a deeper relationship to financial freedom as you describe it?
Callais: It’s a complicated question, which I think it’ll take time for us all to develop clearer answers to, because the widespread adoption of Bitcoin is so new—and still emergent. But I think you can already see some through lines.
In autocratic regimes, as you say, Bitcoin represents a crucial lifeline for dissidents facing financial repression. Throughout the autocratic world, when governments freeze bank accounts, restrict currency access, or monitor transactions to punish political opposition, Bitcoin represents an alternative financial system beyond state control—because the blockchain technology it’s built on is beyond state control. When Farida Nabourema talks about the use of Bitcoin among frontline activists, she’s talking about it in this way—as a technology for transmitting resources.
And then there’s another important use case, which is related but distinct: For people living in countries like Venezuela or Belarus or Iran, Bitcoin can also be a way to preserve wealth against hyperinflation.
Autocracies can weaponize hyperinflation by using it basically as a stealth taxation mechanism, transferring wealth from citizens to the state through currency devaluation. The resulting economic chaos tends to eviscerate the middle class—typically the foundation of democratic movements—while dramatically increasing all citizens’ dependence on the state. Of course, regime loyalists get privileged access to foreign currencies and favorable exchange rates.
That reinforces patronage networks. Ordinary citizens, meanwhile, can become so consumed with daily survival challenges that political organizing becomes secondary. And the whole economic emergency means justification for more government intervention through price controls and nationalization, consolidating the regime’s economic and political power while giving them scapegoats for the crisis.
In both cases, in autocratic societies, Bitcoin can serve as an essential infrastructure for political resistance—but also for basic economic survival.
In democratic societies, with their established rule of law and financial systems, Bitcoin’s significance would seem in a way obviously different—more about enhancing choice than about providing essential protection. Citizens in democracies already have property-rights protections, stable currencies, and banking access. So for them, you could see Bitcoin as more supplemental than foundational—and its appeal centering more on philosophical and practical preferences than on need. Those might be a resistance to inflationary monetary policy, a desire for greater transaction privacy, reduced dependence on financial intermediaries, or protection against potential future infringements on financial freedom.
But even in democracies, Bitcoin is already a potential check against government overreach, as well. It’s part of the economy now; its mere existence as an alternative monetary system could potentially discourage democratic governments from implementing excessive financial controls— not unlike the prospect of capital flight discourages governments from getting out of hand with monetary policy. Bitcoin is already establishing a financial baseline that governments around the world have to consider when creating and implementing regulations, potentially supporting financial freedom across autocratic and democratic societies in different ways.
Gould: You mention protection against potential future infringements on financial freedom. A notable specter in that category is the emergence of central bank digital currencies—CBDCs, digital versions of a state’s legal tender—which, Roger Huang points out, governments all around the world either are contemplating, are actively developing, or have already implemented. As Huang sees it, CBDCs represent a “fundamental reset in the relationship between an individual and the financial system they live in—establishing a direct connection between citizens and central banks.” How would you see it— and how would you understand the implications for democratic life, in turn?
Callais: I’d say it’d be hard to argue with the idea of CBDCs representing a fundamental reset in people’s relationship to the state; and I’d see it as representing the realistic possibility—if not probability—of financial repression coming from the margins to the center of democratic life.
The statistics on how much of the world is thinking about CBDCs or planning for them, or already have them, as you say—135 countries and currency unions, representing more than 98 percent of global GDP—are pretty striking. Less than a dozen have implemented them—China’s digital yuan is the standout—but every G20 country is exploring a CBDC, and at least 13 are already piloting one, including Brazil, Japan, India, Australia, Russia, and Turkey. So it’s quite real.
But what happens next is uncertain.
The logic for CBDCs in dictatorships is straightforward: They offer autocratic rulers even more control over their economies and—no less importantly—people. But as Huang says, the logic in democracies is complex: Their economies are intricate and complicated, requiring sophisticated policy design and decision making to manage well—meaning, they need a significant degree of technocratic oversight. And the mindset of technocrats is like the mindset of engineers. They don’t necessarily want to grab power in the way autocrats do; I’m sure most don’t. They just tend to see the world in terms of technocratic problems to solve, and by default, they’ll want whatever tools they can get for the job as they see it.
The problem is, the system effects of something like a CBDC—they don’t respect intentions. Or even mindsets. They essentially represent a new financial system arrayed around a new hyper-centralization of power, and any hyper- centralization of power has an autocratic logic, no matter what its architects might be thinking.
Fortunately, in democratic life, there’s a powerful counter-logic—a bottom-up logic in the idea of democracy itself, which chronically competes with the top-down logic of pure technocracy. Which just inherently resists the excessive centralization of power. Which is already interfering with the CBDC agenda in democratic societies, as Huang shows— notably in Canada, whose government used financial repression against its own citizens just a few years ago. And which is the same logic that makes financial freedom, like freedom of speech, so deeply a matter of shared common sense—even in times as politically divided as ours.
Gould: The future is unwritten.
Callais: Still.
Read The Signal. Sign up here.
Justin T. Callais
Justin Callais, PhD, is the Chief Economist at the Archbridge Institute. He leads the institute’s “Social Mobility in the 50 States” project and conducts original research on economic mobility, economic freedom, economic development, and institutional analysis. Follow his work @JustinTCallais and subscribe to his newsletter, Debunking Degrowth.
John Jamesen Gould
John Jamesen Gould is the editor of The Signal.
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