CBDCs

The path to digital slavery

It’s past midnight, I’m reading an article on Substack on central bank digital currency. For the last few days I’ve been trying to wrap my head around how money works, what the proposed movement towards Central Bank Digital Currency means, and what implications does it have practically.

What sparked my interest was the claim that CBDCs are ‘programmable’, i.e. they can be programmed so that the transactions will go through only if certain conditions are met. These conditions could relate to the carbon footprint of the product, or the political views of the persons involved, or anything else under the sun. As of now, I can spend my money on whatever I want. The money doesn’t care what it is being used for. But with CBDCs, or so I had heard, transactions can easily be made conditional. One can imagine the power this will confer on governments and banks to arm-twist people and make them comply with whatever the agenda of the day is - be it forced vaccinations as it was during COVID or be it for reducing the ‘carbon footprint’. (Imagine, you go to to refuel your car, but you cannot because you have exceeded your diesel quota for the month.) This is also the point of the author, and he convincingly demonstrates based on original documents from the BIS that this is indeed the case; that the conglomerate of central banks, financial institutions and governments worldwide have every intention to build in this conditionality into transactions involving CBDC.

In other words, they get to tell you how you spend your money, where you can spend it on, or if you can use it at all.

As I was reading, one code snippet caught my attention. This is a hypothetical snippet provided by the author which checks if a transaction involving a CBDC passes certain tests, and the transaction is completed only if these tests are passed:

function validateTransaction(payment) {
    let validations = [
        carbonValidator.check(payment.product),
        laborValidator.check(payment.supplier), 
        healthValidator.check(payment.consumer),
        politicalValidator.check(payment.context)
    ];
    
    return validations.every(v => v.passed);
}

I got curious and put it in ChatGPT to get information from a different perspective. The response was, to say the least, very interesting. Here is the response from ChatGPT:

######################################################

You said:

can you tell me what this code does and which language it is:

function validateTransaction(payment) {
let validations = [
carbonValidator.check(payment.product), laborValidator.check(payment.supplier), healthValidator.check(payment.consumer),
politicalValidator.check(payment.context) ];
return validations.every(v => v.passed);
}

ChatGPT said:

This code is written in JavaScript (or TypeScript, since both share this syntax).

Here’s what it does, step by step:

---

🧠 Purpose

It defines a function called validateTransaction that checks whether a payment is valid based on several validators (carbon, labor, health, and political).

---

🔍 Detailed Breakdown

function validateTransaction(payment) {

• Defines a function named validateTransaction that takes one argument: payment (likely an object containing transaction details).

    let validations = [
        carbonValidator.check(payment.product),
        laborValidator.check(payment.supplier), 
        healthValidator.check(payment.consumer),
        politicalValidator.check(payment.context)
    ];

• Creates an array named validations.

• Each item in the array is the result of calling a .check() method on a different validator object.

• Each validator checks a different aspect of the payment:

  • carbonValidator checks the product (e.g., carbon footprint or environmental impact).

  • laborValidator checks the supplier (e.g., ethical labor practices).

  • healthValidator checks the consumer (e.g., health safety).

  • politicalValidator checks the context (e.g., sanctions or political risks).

Each .check() presumably returns an object, something like { passed: true, reason: “ok” }.

    return validations.every(v => v.passed);
}

• The function checks if every validation result in the array has a truthy passed property.

• If all four validators return passed: true, the function returns true.

• Otherwise, it returns false.

---

✅ In summary

Language: JavaScript
Function: Returns true if all validation checks pass, otherwise false.
Concepts used:

• Array literal []

• Arrow function v => v.passed

• Array.prototype.every() to ensure all checks succeed

---

Would you like me to show how this function might behave with example payment data and validator objects?

You said:

yes

ChatGPT said:

Perfect 👍 — here’s an example that shows how validateTransaction might behave in practice.

---

🧩 Example setup

Let’s imagine this is our payment object:

const payment = {
  product: { name: “Eco T-shirt”, carbonScore: 12 },
  supplier: { name: “FairWear Ltd”, laborCertified: true },
  consumer: { name: “Alice”, healthClearance: true },
  context: { country: “Germany”, sanctions: false }
};

Now suppose we have four validator objects, each with a .check() method returning an object that includes a passed property.

const carbonValidator = {
  check(product) {
    return { passed: product.carbonScore < 20 };
  }
};

const laborValidator = {
  check(supplier) {
    return { passed: supplier.laborCertified === true };
  }
};

const healthValidator = {
  check(consumer) {
    return { passed: consumer.healthClearance === true };
  }
};

const politicalValidator = {
  check(context) {
    return { passed: !context.sanctions };
  }
};

---

🧮 When you call the function

const result = validateTransaction(payment);
console.log(result);

Here’s what happens internally:

ValidatorCheckPassed?carbonValidatorproduct.carbonScore < 20 → 12 < 20✅ truelaborValidatorlaborCertified === true✅ truehealthValidatorhealthClearance === true✅ truepoliticalValidator!context.sanctions → !false✅ true

Since all four checks return { passed: true },
validations.every(v => v.passed) → true.

So:

console.log(result); // → true

---

⚠️ Example where one check fails

If the product had a higher carbon score:

payment.product.carbonScore = 45;

Then carbonValidator.check() returns { passed: false },
and the final result would be:

validateTransaction(payment); // → false

---

Would you like me to rewrite this example in TypeScript with explicit types (so you can see how it would look in a typed setup)?

You said:

is this the idea behind CBDC?

ChatGPT said:

Excellent question, Bhaskar — and yes, in a broad conceptual sense, this code touches on an idea similar to what could underpin a Central Bank Digital Currency (CBDC) transaction validation system, though it’s a simplified and abstracted example.

Let’s unpack that clearly 👇

---

💡 The Connection to CBDCs

CBDCs (Central Bank Digital Currencies) are state-issued digital money — programmable, traceable, and often subject to automated rules about how, when, and where funds can be used.

The code you shared:

function validateTransaction(payment) { ... }

is a simplified representation of how “programmable validation” could be applied to digital transactions.
In a CBDC or regulated payment system, similar logic could determine whether a transaction is allowed before it is finalized.

---

⚙️ Parallels with CBDC logic

Validator in the codePossible CBDC equivalentPurposecarbonValidatorEnvironmental compliance rulesPrevent CBDC from being used for high-carbon goodslaborValidatorEthical sourcing checkDisallow payments to blacklisted or non-compliant suppliershealthValidatorConsumer protectionVerify that certain goods meet health/safety standardspoliticalValidatorSanctions and jurisdictional rulesBlock transactions involving sanctioned entities or regions

A CBDC system could embed these checks directly in the payment protocol, rather than relying on banks or intermediaries to enforce them manually.

---

🧠 The concept: “Programmable Money”

The key idea your code demonstrates is programmable compliance — where each transaction runs through validators before being approved.

That’s one of the most debated features of CBDCs:

• Pros: Enables automatic enforcement of laws, transparency, and precise policy tools (e.g., limiting subsidies to specific sectors).

• Cons: Raises concerns about privacy, surveillance, and government control over individual spending behavior.

---

⚖️ In summary

• ✅ Your code represents a simplified model of programmable validation — a concept directly relevant to CBDC infrastructure.

• ⚙️ Each “validator” mirrors a regulatory rule or policy filter.

• 🚨 In real CBDCs, such checks would run within smart contract layers or centralized regulatory engines, integrated with identity systems (KYC/AML).

---

If you want, I can show you a more realistic CBDC-style pseudocode, illustrating how central banks could embed such “policy validators” into digital currency transactions. Would you like that?

You said:

Sure

ChatGPT said:

Excellent 👍 — here’s how the same idea could look when adapted into a CBDC-style pseudocode that mirrors how programmable money might work in a central bank–controlled digital payment system.

---

💳 CBDC-Style Transaction Validation (Conceptual Example)

function processCBDCTransaction(transaction) {
    // 1. Identity & Sanction Checks
    if (!KYCValidator.check(transaction.sender) ||
        !KYCValidator.check(transaction.receiver)) {
        return { status: “rejected”, reason: “KYC/AML validation failed” };
    }

    if (SanctionsValidator.isSanctioned(transaction.receiver.country)) {
        return { status: “rejected”, reason: “Sanctioned entity or region” };
    }

    // 2. Policy-Based Spending Rules
    if (PolicyRules.isRestrictedCategory(transaction.category)) {
        return { status: “rejected”, reason: “Restricted spending category” };
    }

    // Example: Subsidy or stimulus targeting
    if (transaction.currencyTag === “greenCBDC”) {
        if (!SustainabilityValidator.check(transaction.merchant)) {
            return { status: “rejected”, reason: “Not a certified green merchant” };
        }
    }

    // 3. Carbon, Ethical, or Contextual Validation
    let checks = [
        CarbonValidator.check(transaction.product),
        LaborValidator.check(transaction.supplier),
        PoliticalValidator.check(transaction.context)
    ];

    if (!checks.every(c => c.passed)) {
        return { status: “rejected”, reason: “Contextual policy validation failed” };
    }

    // 4. Transaction Limit or Expiry Rule
    if (transaction.amount > Limits.getMax(transaction.sender)) {
        return { status: “rejected”, reason: “Amount exceeds limit” };
    }

    if (transaction.expiryDate < now()) {
        return { status: “rejected”, reason: “Expired digital currency” };
    }

    // 5. Final Authorization
    Ledger.record(transaction);
    return { status: “approved”, reason: “All validations passed” };
}

---

🧠 What This Demonstrates

ConceptExplanationKYC/AML checksEnsures users are verified and not involved in money laundering.Sanctions rulesBlocks payments to prohibited entities or regions.Policy-based controlsGovernments can enforce “programmable” conditions (e.g., spending limits, subsidies, restrictions).Special-purpose tokensA CBDC could have different “types” — e.g., green subsidies, food aid, etc., that only work in approved contexts.Time-based validitySome CBDC tokens could expire to encourage spending rather than saving (e.g., economic stimulus design).

---

⚖️ Philosophical Reflection

This approach enables granular monetary policy automation, but also raises deep questions about:

• Autonomy: Should every transaction be pre-approved by a rules engine?

• Privacy: Who sees the context of your spending?

• Governance: Who defines or updates the validators?

Your original code captures the essence of this tension beautifully: a clean technical model that’s powerful — but, depending on its use, could either enhance integrity or limit freedom.

---

Would you like me to extend this into a visual architecture diagram — showing how these validators fit into a full CBDC system (with central bank, users, and policy modules)?

##################################################

So, the ChatGPT response is not substantially different from that of ESCAPEKEY’s. And of course, anyone can reach out to the original documents and read them for oneself.

Make sure to read the original article by ESCAPEKEY:

The Financialisation of Compliance