“How Do We Weaponize This Against The Vulnerable,” Asked Everyone

Last Updated on: 24th June 2024, 03:24 pm

Reading about a concept called purpose-bound money, a few things come to mind.

1. I’d love to know how much investment cash was fleeced out of people who didn’t realize they were financing the invention of the gift card.
2. It sounds like a privacy nightmare by design.
3. Assuming they haven’t already, how long is it going to take for governments, especially the sorts who don’t mind making it known that they’d rather the disabled or those on welfare didn’t exist, to figure out that this can be used to make their lives even worse?

   “Here’s your criminally inadequate benefits cheque for the month, Charlie. Remember, it only works at Shoppers Drug Mart. You know their slogan: If they ain’t got it, you don’t either.” No, you can’t trade it for cash. You’ll spend that foolishly. You’re poor, remember? You don’t know what you need. You don’t know how to use money. You’re lucky you’re even getting this. Now shut up before we claw it back even more.”

As the tide of enthusiasm for cryptocurrency ebbs, new forms of digital currency are emerging, including something called purpose bound money (PBM) – digibucks that can only be spent in certain ways coded into them by their issuers, or would only change hands under certain conditions.
The core idea of PBM is that its issuer can stipulate what the digicash is used for, who it can be transferred to, daily spending limits, and even give it a use-by date. The number of constraints imposed on the instruments can be many or none.
Amazon, for example, has imagined PBMs could mean “payments to register once conditions like payment on delivery are met.”
Another example of PBM was shown at this year’s Singapore Fintech Festival. Attendees who set up a wallet were issued digital vouchers that could be redeemed for items like food at around 200 merchants.

Nitin Gaur, managing director at State Street Digital and industry podcaster, told The Register that while gift cards work within the closed system of a business, something like a purpose-bound CBDC is issued by a sovereign government.
“The government can control the purpose of it, and that’s one of its intentions,” Gaur told The Reg, suggesting that the most likely use of PBM is government disbursements.
“It’s a good use case,” he adds.

MAS has its own ideas about use cases, which include things like contractual agreements, commercial leases, e-commerce, and philanthropy.
For instance, a buyer pays for goods, but the merchant doesn’t get the money until the goods are delivered. Or a security deposit is made on a property lease and kept in that form until it is returned. If there is any dispute over damages to the home, the money is held over until that dispute is settled. Or a financial donation to a soup kitchen for supplies may only be spent on groceries.