A story from mid-last year reveals a creepy side to digital currency: “The Bank of England has called on ministers to decide whether a central bank digital currency should be ‘programmable’, ultimately giving ‘the issuer control over “how it is spent by the recipient”:

Tom Mutton, a director at the Bank of England, said during a conference on Monday that programming could become a key feature of any future central bank digital currency, in which the money would be programmed to be released only when something happened.

He said: “You could introduce programmability – what happens if one of the participants in a transaction puts a restriction on [future use of the money]?

“There could be some socially beneficial outcomes from that, preventing activity which is seen to be socially harmful in some way. But at the same time it could be a restriction on people’s freedoms.”

He warned that the Government would be required to intervene and make the final decision.

Tim Wallace, “Bank of England tells ministers to intervene on digital currency ‘programming’” at The Telegraph/MSN Money (February 25, 2021)

Of course, programmable digital currency could prevent people from accessing all kinds of things that a government-directed health initiative has focused on as “bad for them,” based either on sound science or (as often happens) on a health scare.

Apart from digital currency, it is difficult for government to simply control individual usage patterns. A decade ago, New York City’s mayor, billionaire publisher Michael Bloomberg, banned the sale of “beverages larger than 16-ounces in restaurants, movie theaters, and food carts” :

Bloomberg insists that his sugary-drink ban will help reduce obesity in the city. He also argues it’s really no ban at all, just a tool to help people better understand how much sugar they consume.

Julie Gunlock, “Goodbye Big Gulps In Mayor Bloomberg’s New York, Hello Big Government” at Forbes (September 18, 2012)

Generally, such moves are marketed as a broad public health benefit, with the control over private choices minimized in the description. Bloomberg’s ban was later rejected by a New York State court of appeals.

The current New York City mayor, Eric Adams — himself roughly vegan — has announced an intention to cause residents to “eat a plant-based centered life.”

These schemes merely limit but don’t ultimately prevent people from making private choices about what to buy. For that, a government would need programmable currency that simply won’t work when the forbidden product was scanned.

That would be a step up even from the current social credit system in China:

The government rolled out the travel ban on people with poor social credit last May. According to a report from China’s National Public Credit Information Center from last week, people have been blocked 17.5 million times from purchasing airplane tickets, and 5.5 million times from buying high-speed train tickets. These people had become “discredited” for unspecified behavioral crimes. That’s up from only 6.15 million citizens being blocked from taking flights as of 2017, according to China’s supreme court.

Shannon Liao, “China banned millions of people with poor social credit from transportation in 2018” at The Verge (Mar 1, 2019)

The ticket machines won’t work for travel-banned people in a society where government tracks more and more details of individuals’ lives every year.

Programmable currency can also apply such a system to buying fast food, lottery tickets, steaks, or flowers, depending on the government’s issues at the time. Doubtless, many small businesses would spring up where, for a markup, the proprietor buys goods for the forbidden person. Making such businesses illegal would add to the list of crimes government can prosecute but the contribution of pursuing them to public health and safety would be minimal at best. But, as Bloomberg has demonstrated, desire on the part of a governing class can run well ahead of prudence.

Anyone who has watched how swiftly Canadian banks complied with the Emergencies Act this month, to freeze the accounts of those who protested onerous COVID-19 rules in Ottawa, should be in no doubt that financial institutions would willingly comply with programmable digital currency, even if it were forced on them. For one thing, Canada’s government gave the banks immunity from prosecution.

The accounts have since been unfrozen, doubtless in part because of massive withdrawals in cash and a tripling in demand for U.S. dollars, along with publicity about the resulting hardships. But that should not blind us to the lesson here: The banks were quite willing to co-operate until cutting people off from their accounts endangered the banks’ own systems.

All-digital currency would, as Bernard Fickser notes render a citizen entirely helpless financially in the face of government monitoring for either benevolent purposes or other purposes. It could prevent you from buying a Big Mac but it could also punish you unexpectedly in situations that would otherwise require a structured legal system: “Are you late with an alimony payment? Sorry, but you can’t take that business flight — we’re going to block payment until you’re caught up with your debt…”

Your right to purchase the needs of life could ultimately depend on what you said on social media. Too far-fetched? Well, in Ontario (a province of Canada), during the anti-COVID lockdown demos that preceded the Emergencies Act, one woman found a police officer at her door who wanted to discuss a Facebook post she had written, supporting the protests… That occurred before the federal government gave the banks the right to freeze her accounts. But what if it had occurred afterward?

Canada is not unusual in these matters; it just happened to be first. Citizens of all countries will need new safeguards and alternatives if any move to all-digital currency is proposed, especially programmable currency.

You may also wish to read: What if government knows you ate a Big Mac — and doesn’t approve? One spur to the development of cryptocurrencies is a desire for privacy. And a growing number of citizens of societies dominated by Big Tech feel the need for privacy. The cashless society comes with the inevitable reality that government can track every move you make that involves an exchange of money.