In countries around the world, central bank digital currencies (CBDCs) are poised to change the way average citizens use money. In the coming decade, billions of people are likely to use CBDCs—a new type of currency run on a centralized ledger—to do everything from pay taxes to buy groceries to receive welfare checks.

Once seen as a technology of the future, CBDCs—along with other digital payment innovations—garnered new attention during the pandemic as governments explored how they might better exchange money with banks and consumers. But unlike Bitcoin and other private cryptocurrencies that promote ideals of decentralization, CBDCs are intended to leave the state very much in control.

Already, the U.S. is moving forward with tests of CBDCs, the UK is hiring a Head of Central Bank Digital Currency and testing out a digital pound, and China has launched its version of CBDCs in the real world. We are closer than ever to a world of centralized digital currencies reshaping the financial sector. This raises the question of whether we are entering a new era of financial efficiency or, as critics fear, one of dystopian surveillance.

The most obvious of these risks relates to privacy. At a time when public confidence in government and institutions is at an ebb worldwide, there are legitimate fears that authorities may use CBDCs for new forms of surveillance and control.

Central banks could freeze the accounts of actors opposing the country’s agenda—such as when Canada froze the accounts of protesting truckers. Or even prevent you from purchasing junk food if they deem your diet to be too unhealthy.

Nonetheless, 114 countries—which represent 95% of global GDP—are exploring a CBDC (according to Atlantic Council). Of those 114, 57% are in the research or development stage, 16% are piloting, and 10% have launched their CBDC.

While the U.S. and Europe are still exploring the potential deployment of CBDCs, China, and India have already deployed their own versions in the real economy, while Nigeria and Jamaica have likewise launched projects of their own.

While each country has its unique societal challenges, every major power wants to at least dip its toes into the waters of digital currency due to the fear of being left behind.

Are CBDCs too dangerous?

The idea of central banks using programmable currency to flex control over how citizens spend their money feels dystopian. But not all CBDCs will have such limitless capabilities.

Johnathan McCollum is at the forefront of efforts to create a CBDC in the U.S. As Chair of Federal Government Relations for Davidoff Hutcher & Citron, McCollum works closely with members of Congress to help amend federal laws for America to move towards a safe digital currency.

If we aren’t more aware of where you place your votes, our financial democracy could end up being a financial dictatorship controlled by our central banks.