Ray Dalio Warns CBDCs Could Hand Governments Sweeping Financial Control
Ray Dalio cautioned that central bank digital currencies (CBDCs) will likely increase government control and transparency over financial transactions. He expects CBDCs to be implemented soon but doubts they will become major financial vehicles, noting they may not offer interest and could lose value over time, making money market funds or bonds more attractive. Dalio acknowledged CBDCs' convenience but emphasized their potential as powerful government tools for transaction surveillance, automatic tax collection, sanctions enforcement, and foreign exchange controls. Over 130 jurisdictions are exploring CBDCs, with several countries having launched or piloted them. Critics, including those in the blockchain industry, warn that CBDCs would extend the financial oversight already available to central banks, contrary to the privacy and decentralization offered by cryptocurrencies like Bitcoin. Dalio himself has shifted to view Bitcoin more favorably as a portfolio diversifier but maintains it has limitations, occasionally preferring Bitcoin and gold to traditional bonds.
