HRF’s Weekly Financial Freedom Report #14

Turkey | Phase One of CBDC Research Complete

The Central Bank of the Republic of Turkey completed the initial phase of its Central Bank Digital Turkish Lira Project and released its evaluation report. This new tool would give the Turkish regime new ways to halt financial activities, seize assets, and block access to money for opposition activists and other vulnerable populations. It is estimated that more than half of Turkey’s 84-million-strong population has invested in digital assets like Bitcoin and stablecoins as people try to escape the collapsing lira. A CBDC attempts to close these exit ramps by taking cash out of the equation.

Ghana | New CBDC Plans

Presidential candidate Dr. Mahamudu Bawumia revealed his ambitious plans for Ghana’s retail CBDC, the eCedi. In its design paper, the Bank of Ghana (BoG) outlined how the eCedi would be under the complete control of the BoG, fully compliant with Know-Your-Customer/Anti-Money Laundering laws, and subject to extensive monitoring and regulatory policies. This is particularly alarming when we consider Ghana’s recent legislation aimed at cracking down on the rights of LGBT people and activists. With CBDCs, money has the potential to become a system of oppression, and the Ghanaian government is not hiding who its targets might be. If rolled out nationally, the eCedi is likely to curtail the rights and freedoms of minority groups.

Libya | Demonetization of 50 Dinar Banknotes

Libya is contemplating the removal of 50 dinar banknotes from circulation, citing their high rate of counterfeiting, use in illegal activities, and low transaction velocity. This potential withdrawal would be an aggressive move, given that these notes constitute Libyans’ preferred medium of savings due to their high denomination. The Libyan House of Representatives stated that any decision to proceed must come with an announcement, and there would be a six-month grace period before any action is taken. Either way, such measures will severely impact the 35% of Libyans who remain unbanked and use cash as their primary means of savings, and they are a de facto way for the state to assert more control over the economy.

Venezuela | “Forced Disappearance” of Digital Security Activist

One of Venezuela’s best-known security experts, Rocío San Miguel, was detained and disappeared for several days. Soon after her disappearance, her daughter, two brothers, and two former romantic partners also went missing. San Miguel is known for her research into the country’s authoritarian regime, her investigations into the people killed by state security forces, and her criticism of a Venezuelan law allowing the use of deadly force during protests. Maduro’s regime is known to freeze the bank accounts of high-profile dissidents as part of its crackdown on opposition figures — like opposition leader Juan Guaidó. In addition to financial blockades, these forced disappearances are a way to stifle dissent and create a new era of repression.

Egypt | Currency Devaluation

The United Arab Emirates (UAE) is investing $35 billion to bail out the Egyptian dictatorship and develop an area about 350 kilometers northwest of Cairo called Ras El-Hekma. This was followed by the Central Bank of Egypt (CBE) increasing interest rates by 6% and moving the Egyptian pound toward a floating exchange rate. Consequently, the currency weakened beyond 50 pounds to the dollar, marking a 40% devaluation.

The widely anticipated move secured Egypt an $8 billion loan from the International Monetary Fund (IMF), conditional on floating the currency. While this devaluation could ease government debt burdens, attract foreign investment, and boost export competitiveness, it comes at the expense of the country’s 109 million citizens, who are shouldering the brunt of the country’s economic hardships. Egypt is facing a 30% inflation rate, an inability to buy essential goods or save money, heightened political instability, and foreign currency shortages. With all this said, HRF is proud to support efforts to expand Bitcoin education in Arabic via various partners through its software development fund.

Bitcoin | 5th Largest Base Money

This week, Bitcoin hit all-time highs against numerous leading currencies, achieving record-breaking prices against 16 of the world’s 20 strongest fiat currencies. The rally moved Bitcoin past the British Pound and placed the decentralized, open-source currency as the 5th largest base money in the world. Bitcoin also surpassed the global market capitalization of silver, a metal trusted as currency for thousands of years. Users can expect volatile conditions as the world grapples with new monetary technology, but long-term trends indicate a slow and steady march of increased Bitcoin adoption globally, especially in authoritarian regimes.