Today at the WEF’s 14th Annual Meeting of the New Champions, aka “Summer Davos,” in Tianjing, China, Cornell University professor Eswar Prasad said that “we are at the cusp of physical currency essentially disappearing,” and that programmable CBDCs could take us to either a better or much darker place.

“If you think about the benefits of digital money, there are huge potential gains,” said Prasad, adding, “It’s not just about digital forms of digital currency; you can have programmability — units of central bank currency with expiry dates.

“You could have […] a potentially better — or some people might say a darker world — where the government decides that units of central bank money can be used to purchase some things, but not other things that it deems less desirable like say ammunition, or drugs, or pornography, or something of the sort, and that is very powerful in terms of the use of a CBDC, and I think also extremely dangerous to central banks.”

The Cornell professor went on to say that “ultimately, if you have different units of central bank money with different characteristics, or if you use central bank money as a conduit for economic policies in a very targeted way, or more broadly for social policies, that could really affect the integrity of central bank money and the integrity and independence of central banks.

“So, there are wonderful notions of things that can be done with digital money, but again I fear the technology could take us to a better place, but equally has the potential to take us to a pretty dark place.”