Billionaire investor Ray Dalio believes that central bank digital currencies (CBDCs) are moving from theory to inevitability.
In a new interview with Tucker Carlson, Dalio says CBDCs are likely coming, but warns their design could fundamentally change how money works for individuals, investors and governments.
According to Dalio, the government will try to lure people into using CBDCs by offering interest.
“There’s a great deal of appeal because of the fact that it’s easy and so on, and I think it’ll be done. If they’re not able to offer interest, and there will be a debate, probably they won’t be, then they’re not an effective vehicle to hold it in because you’ll have the depreciation. You’d rather hold it in a money market fund or a bond, but that’s the debate.”
But beyond the potential to generate interest, Dalio points to what he described as the more consequential issue: control.
“There will be no privacy and it’s a very effective controlling mechanism by the government. All the transactions will be known. All transactions done with digital currencies will be known, which is good for illegal activities, getting control of illegal activities, but it also means that the government has a great deal of control.
For example, they can tax that way, they can take your money, they can establish foreign exchange controls and the like. So that’s something that will be an increasing issue, particularly for international holders of that currency, because they might feel, let’s say, if you’re a Frenchman and they wanted to have sanctions, they could take your money, of course, and so on. So there’s the privacy issue of that.”
He also warns that people could easily be disenfranchised if they challenge the government.
“Politically disfavored, you could be shut off, yes. So, those kinds of issues enter into it.”
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