Tag Archives: Central bank digital currencies

Your Money AND Your Life, by Edward Snowden

If they can track every cent you receive or spend, how much freedom, if any, do you have left? From Edward Snowden at edwardsnowden.substack.com:

Central Banks Digital Currencies will ransom our future

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“Programmable Digital Currency”: The next stage of the new normal? by Kit Knightly

Who says governments can’t innovate? They’re always thinking of new ways to rip you off. From Kit Knightly at off-guardian.org:

The war on cash’s endgame is here: money replaced by vouchers subject to complete state control.

Building on the bitcoin model, central banks are planning to produce their own “digital currencies”. Removing any and all remaining privacy, granting total control over every transaction, even limiting what ordinary people are allowed to spend their money on.

From the moment bitcoin and other cryptocurrencies first emerged, sold as an independent and alternative medium of exchange outside the financial status quo, it was only a matter of time before the new alternative would be absorbed, modified and redeployed in service of the state.

Enter “Central Bank Digital Currencies”: the mainstream answer to bitcoin.

For those who have never heard of them, “Central Bank Digital Currencies” (CBDCs) are exactly what they sound like, digitized versions of the pound/dollar/euro etc. issued by central banks.

Like bitcoin (and other crypto), the CBDC would be entirely digital, thus furthering the ongoing war on cash. However, unlike crypto, it would not have any encryption preserving anonymity. In fact, it would be totally the reverse, potentially ending the very idea of financial privacy.

Now, you may not have heard much about the CBDC plans, lost as they are in the tangle of the ongoing “pandemic”, but the campaign is there, chugging along on the back pages for months now. There are stories about it from both Reuters and the Financial Times just today. It’s a long, slow con, but a con nonetheless.

The countries where the idea progressed the furthest are China and the UK. The Chinese Digital Yuan has been in development since 2014, and is subject to ongoing and widespread testing. The UK is nowhere near that stage yet, but Chancellor Rishi Sunak is keenly pushing forward a digital pound that the press are calling “Britcoin”.

Other countries, including New Zealand, Australia, South Africa and Malaysia, are not far behind.

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How we know that Bitcoin is a force for good, by Mark Jeftovic

Private cryptocurrencies like Bitcoin are the antidote to Central Bank Digital Currencies. From Mark Jeftovic at bombthrower.com:

Cryptos are the antidote to repressive Central Bank Digital Currencies

Yesterday I wrote up why I don’t think any kind of China-style ban on Bitcoin and cryptos would be tenable in (so-called) liberal democracies here in the West. It referenced an earlier piece that described the threefold governance structure I see competing for relevance over the coming decades.

Somebody linked to those in the comments from a Tom Luongo piece (which I rather enjoyed enough to subscribe to his newsletter) but when I read through some of the other comments around Bitcoin, how it’s a globalist Trojan horse for surveillance capitalism and social credit I realized I needed to get a piece out to speak specifically to this aspect of future governance.

I cover this a lot in The Crypto Capitalist Letter, in fact it’s a pillar of our macro economic thesis (which you can download free here). It all comes down to the differences between real crypto currencies like Bitcoin, Ethereum, Dash, Monero, et al and coming Central Bank Digital Currencies (CBDCs), like China’s Digital Yuan, like the coming FedCoin, and anything else that will be issued by central banks, directly from governments or even in conjunction with Big Tech platforms.

There are the two main types of digital money that will co-exist in the future.

Each type of digital money corresponds to a governance mode of the future. Which type of this money you make your own or your business’ financial centre of gravity will have an outsized impact on whether you live in the future as a neo-Feudal serf or as a sovereign individual.

Each one has its own fundamental architecture, and the governance and economics that result from those architectures reflect the governance models of the mode that is built on them. This is critical and builds on what I’ve been writing about for  years now, drawing on the work of relatively obscure commentators like Vincent Locascio and Steven Zarlenga. The latter who wrote in his Lost Science of Money, whoever controls the monetary system, controls society.

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Central Bank Digital Currencies: A Future of Surveillance And Control, by Ronan Manly

The only thing scarier than vaccine passports are Central Bank Digital Currencies. Undoubtedly the two will merge. From Ronan Manly at bullionstar.com via zerohedge.com:

One of the most potentially far-reaching trends in the financial landscape right now is the imminent roll-out of Central Bank Digital Currencies (CBDCs), and the parallel attacks which central bankers are waging on private digital currencies and tokens as they tee up the launch of their CBDCs.

First some clarifications. While the majority of central bank issued currencies (fiat currencies) in existence around the world are already in digital form, a fiat currency held in digital form is not the same as a Central Bank Digital Currency (CBDC).

What is a CBDC?

A CBDC generally refers to electronic or virtual central bank (fiat) money that is created in the form of digital tokens or account balances which are digital claims on the central bank. CBDCs will be issued by central banks and will be legal tender.

Many CBDCs that are being researched and developed employ Distributed Ledger Technology (DLT), with the recording of transactions on a blockchain.

However unlike private cryptocurrencies which use a permissionless and open design, CBDCs that use DLT will use permissioned variants (deciding who has access to the network and who can view and update records in the ledger). See here for a discussion of permissionless vs permissioned blockchains.

CBDCs – The antithesis to decentralized private cryptocurrencies and tokens

Critically, as the name suggests, CBDCs will be centralized and governed by the issuing authority (i.e. a central bank). So, in their design and structure, CBDCs can be viewed as the very antithesis to decentralized private cryptocurrencies and tokens.

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Welcome to the Central Bank Hotel, Once Inside You Can Never Leave, by Mike “Mish” Shedlock

As a step towards totalitarianism, Central Bank Digital Currencies are right up there with mandatory vaccines. From Mike “Mish” Shedlock at mishtalk.com:

Central bank digital currencies are on the way. The German Central Bank just embraced a digital euro. Let’s discuss the risks.

Hotel Fedafornia3Fintech and Global Payments

Jens Weidmann, president of the Bundesbank, Germany’s central bank gave the opening speech at the digital conference “Fintech and the global payments landscape – exploring new horizons

Exploring a Digital Euro

The title of Weidmann speech was Exploring a Digital Euro.

Emphasis mine with my thoughts in braces [ ]

Paper money, for instance, was first introduced in China about a thousand years ago. This innovation eventually transformed the payments system. Today, digitalisation is on the cusp of overhauling payments.

Central banks have to work out how to respond to this challenge. One possibility is the issuing of central bank digital currencies (CBDCs). According to a survey by the Bank for International Settlements (BIS), the share of central banks conducting work on CBDC for general or wholesale use rose to 86% last year. Many of them have made significant progress.

Two months ago, the Eurosystem launched a project to investigate key questions regarding the design of a CBDC for the euro area. The aim of the investigation is to prepare us for the potential launch of a digital euro. Experiments have already shown that, in principle, a digital euro is feasible using existing technologies.

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Central Bank Visions of Absolute Control, by MN Gordon

The “potent director” fallacy is ascribing powers to someone or to a group that they don’t really have. Perhaps the most widespread one is the idea that central banks control economies. They don’t. From MN Gordon at economicprism.com:

There’s not much you can do in the year 2021 that doesn’t leave a digital trail.  The collusion of big tech and big government has assured this.

Still, there does remain one simple way to elude the busybodies.  In fact, one of the last ways to preserve some level of economic privacy is to pay with cash.

Because when you pay with cash the authorities cannot monitor and track what you buy.  They don’t know if the cash you pulled from the ATM was stuffed in your mattress, or used to buy groceries or ammo or silver coins.  What’s more, the authorities don’t like this.

The control freak central planners want to know what you are buying, and where and when you are buying.  They also want to know how much you spend down to the very last cent.  A digital dollar, coupled with the abolition of cash, would allow them to do this.  Moreover, it would provide them the ability to have full control over every transaction you make.

For example, if a purchase falls outside of the parameters established by the digital dollar’s monitoring algorithm, it could be cancelled on the spot.  Should an attempted purchase not align with the buyers social credit score it would not go through.  Are you overweight?  Then no glazed donuts for you.

To be clear, digital dollars would have nothing to do with cryptocurrencies or decentralized finance.  Rather, digital dollars would be issued by the Federal Reserve and would allow the Fed to monitor and control every transaction you make.

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Banking faces seismic changes, by Alasdair Macleod

The major banks’ business is shifting to more lending to government and less to the private sector. From Alastair Macleod at goldmoney.com:

The role of commercial banks in the global economy is changing, with lending to governments and their agencies now more important than lending to goods and services industries. It is a trend which is due to continue.

The new Basel 3 regulations seem set to encourage this trend, despite retail depositors being accorded a stable funding status. Central bank digital currencies are anticipated to augment and perhaps replace non-financial business credit over the next five to ten years.

But the increasing financialisation of commercial banking brings the risk of tying its future firmly to a financial bubble. And with price inflation on the increase, it is only a matter of very little time before that bubble bursts.

This article looks at some of the implications for commercial banking of Basel 3, CBDCs and the changing economic role of commercial banks.

Introduction

The introduction of both Basel 3 banking regulations and central bank plans for digital currencies will affect commercial banks’ priorities and their role in the overall financial system. Basel 3, particularly with regard to the application of the net stable funding ratio (NSFR), will change banking priorities by imposing standardised risk factors across the industry, and central bank digital currencies (CBDCs) threaten to cut the banks out of their intermediary role between central banks and non-financial users of money and credit.

Few members of the public think positively about the banks and their cartel, so popular opinion is unlikely to shed many tears if CBDCs displace them. Ever since the goldsmiths in London began in the seventeenth century to take in deposits upon which they paid six percent, with the agreement that they were not trustees of the money but proprietors of it, banking has contravened the spirit of Roman law by taking in deposits and using them as they please, without depositors fully realising the arrangement. This breach of “natural” law was originally a ruling by the Roman juror, Ulpian (170—228 AD), later codified by the Emperor Justinian (527—565 AD).

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Controlling All Money Is Necessary in Order for the Ruling Class to Dominate the World, by Gary D. Barnett

A totalitarian monetary system will be a necessary part of the surveillance apparatus of a totalitarian regime. From Gary D. Barnett at lewrockwell.com:

“The Federal Reserve System is not Federal; it has no reserves; and it is not a system at all, but rather, a criminal syndicate.”

~ Eustace Mullins

Money has been said to be the root of evil, but that is not exactly correct. The root of all evil lies in the hearts of men, and those that control the money and monetary systems are able to control humanity, and in the process create and perpetuate evil. Money itself is like any other useful tool or commodity in that it allows for trade, commerce, and wealth to prosper. Money is normally only used for evil and immoral purposes when rulers and governments, state criminals in other words, gain a monopoly on the issuance, taxation, and control of it, and use it to control others. This cannot happen in a truly free society, but then, free societies no longer exist.

When men succumb to criminal behavior in order to gain illegal wealth, whether in the private or ‘public’ sector, it is a felonious act, but when the most powerful seek to gain control over the entire monetary system, it is for the purpose of gaining total control over entire populations. This is what is happening now in this fake Covid fraud, which is leading to a reset and complete restructuring of all monetary systems. Make no mistake about it; this is about power and control, and it should be understood that without control over the money, control over the people is not possible. That is why this effort to digitize every transaction, eliminate cash, manipulate and possibly seize precious metals, and to control and regulate all crypto currencies, is so vital to the powerful criminal syndicate called the ruling class, and so devastating to the rest of society.

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Beware Of A Central Bank Digital Currency, by Daniel Lacalle

A central bank digital currency has none of the advantages of either paper currencies or non-central bank issued cryptocurrencies. There is nothing to like about the idea. From Daniel Lacalle at dlacalle.com:

In recent weeks Jerome Powell at the Federal Reserve and Christine Lagarde at the European Central Bank have commented on the likelihood of implementing digital currencies in the next years. The positives have been well explained. More transparency, ease of use and lower cost.

The European Central Bank has stated that “a digital euro would guarantee that citizens in the euro area can maintain costless access to a simple, universally accepted, safe and trusted means of payment. The digital euro would still be a euro: like banknotes but digital. It would be an electronic form of money issued by the Eurosystem (the ECB and national central banks) and accessible to all citizens and firms. A digital euro would not replace cash, but rather complement it. The Eurosystem will continue to ensure that you have access to euro cash across the euro area. A digital euro would give you an additional choice about how to pay and make it easier to do so, contributing to financial inclusion alongside cash”.

In the United States, many voices call for a digital dollar to compete with China’s yuan. However, the US dollar is already the world reserve currency, it is used in more than 80% of global transactions while the yuan is used in less than 4%, according to the Bank of International Settlements (the total is 200% as each transaction involves two currencies), and most payments and transfers are already electronic. The euro is the second most used currency and is also mostly through electronic transfers. One can say that the US Dollar and the euro are already “digital”.

All this sounds good. So, why should we worry about a central bank “digital currency”?

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