And those questions will generally be “How much do you want to take? And how do you want us to give it to you?”
Oh, they’ll probably make sure the correct paperwork is filled out and procedure is followed, but substantive, as opposed to procedural, due process isn't something banks are or want to be guarantors of.
Banks are in a precarious situation re deposits.
But when all banks get hit equally by regulation, consumers would have nowhere else to go. The banks might superficially complain, but they have no financial interest in opposing surveillance.
You might be outside the US? In the US there are literally 1000s of options. And the idea that banks get all the "free money" they want from the Fed...
I don't think you should be suggesting anyone is naive with those two statements.
Also, it needs to be paid back. On top of that, they are in a competitive market where mortgage rates are very low, corporate lending rates are very low. So it's not a simple game of "free money in, high interest money out". Anyone who thinks finance is some easy game hasn't played the game.
However, banks spend billions of dollars defending large clients, going even as far as happily paying multi-billion fines to keep laundering money for the cartels.
A government agency seizing your money rather than asking a bank to do so would often be an improvement over what we have in the US today: Banks routinely freeze peoples accounts with zero due process and little recourse, through the implicit (but not legally recognized) coercion of the impossible maze of bank regulation.
When your assets are frozen directly by the government you're more likely to get access to some amount of due process-- though not always (see: civil forfeiture).
In any case, since banks absolutely never stand up against the government to protect ordinary customers (drug cartels will billion dollar scale accounts are another matter...) it's hard to imagine a CBDC being worse in this particular respect.
Can’t it be architected such that this isn’t possible without certain controls?
Maybe this is naive, but I would think that this digital currency would be designed to preserve people's rights in the same ways that current money does.
Sometimes it feels like some people imagine government working like this: Biden calls up Powell and says “Let’s take all the money from our political enemy N.N today” to which Powell replies “Yeah LOL awesome, my minions are pushing the button now”
Uh, you do realize that to politicians, enforcement looks alot like a jobs program?