Central Bank Digital Currency Is Coming. Will It Benefit or Harm You? – Professional Tax Services

A Central Bank Digital Currency (CBDC) is soon coming to America. CBDCs are a form of digital currency similar to cryptocurrency except it will be issued by the Federal Reserve and the government at a fixed rate and will not be susceptible to fluctuating values.
Recently, the inflation rate has been at its highest in over 20 years. After 110 years, the debt-based monetary system put into place at the outset of 1914 has worn itself out. The solution of the Federal Reserve and other world central banks is CBDCs. But should we place our confidence in a private Federal Reserve that once promised Americans it would stabilize the US dollar and limit inflation? 110 years later the US dollar has inflated by 31 times. During this period, we experienced several recessions, a horrible depression that lasted a decade, and a near banking collapse in 2008.
The goal of CBDCs is to provide consumers and businesses with privacy, transferability, accessibility, convenience, and financial security. Critics of CBCDs question the actual intent and tend to believe government digital currency will allow the Fed and government to:
• Surveil every transaction
• Block or reverse transactions
• Confiscate privately held cash
• Dictate what products and services can be purchased and by whom
• Surveil and enforce tax collection on every transaction down to paying a neighbor’s teenager $5 for bringing in your groceries
• Create negative interest rates (removing money from your savings whenever they wish without your consent)
• Dictate how much you can travel and use your car
• Open the door to implementing a social crediting system similar to China’s that would financially penalize citizens for failing to follow government dictates.
• Place caps on (monthly) individual consumer spending
If the Fed and Congress become increasingly skeptical of cryptocurrency, some economists believe it could result a ban on these currencies.
If you have questions concerning how the establishment of CBDCs could affect you, we welcome you to call us. We provide our clients with unlimited complimentary tax and monetary planning advice.
Professional Tax Services has been proudly selected by Santa Clarita Magazine as Ultimate Tax Service for 2023.
Professional Tax Services is a locally owned provider serving over 3,500 local residents and businesses. For more information, call 661-259-1967 or visit www.scvprotaxservices.com.