The Digital Dollar
The easiest money they ever stole.
In the age of GMO Mosquitos, AI Wombs, Nano-particles in shots & the environment and Block-Chain Technology…The Digital Dollar or CBDC, seems like a pretty tame move. However, as with the initial proposal of ATM cards and machines more than 50 years ago, there is much trepidation surrounding this newest financial, event horizon. Is the concern warranted…after all, the ATM thing went relatively well?
Three things upfront:
CBDC (Central Bank Digital Currency)…AKA…the Digital Dollar (in America) is coming and will replace paper money, in every country.
There is absolutely nothing you can do to stop it.
It’s going to SUCK!!!
I know that third one seems subjective, but I don’t believe it is. Hopefully, I will do a good job of explaining why.
As we go thorough this info…keep asking…what’s the worst that can happen?
So what it CBDC anyway?
As one would or should realize, it is a digital form of our paper fiat currency. That’s right, it is a fiat currency as well. That is to say, it literally will not be worth the paper, it’s not printed on.
While it solves many regulatory issues for Governments, it does not fix the problem of devaluation vulnerability…because like it’s paper counterpart, it isn’t backed by ANY commodities (gold, silver, etc.). Additionally, a national/global CBDC won’t possess the benefit of rarity…which is what gives Bitcoin it’s value. A CBDC, like paper currency, can be created out of thin air…but faster and easier…no printing, storing or transporting required.
You will have a digital wallet, that can be funded by the government or you, from a bank account. The Banks will probably still exist, because they are familiar to the masses and they charge fees.
Aside form the value set by the issuing Central bank, it has no value, in truth it doesn’t exist. Sound ridiculous…well it shouldn’t, we (Americans) have been operating on this model, since the establishment of the Federal Reserve. The one thing you could say about worthless paper money is, it had other uses…you could use it to start a fire or wipe your….you know.
BTW, lest you think this CBDC is just a fluke or will take years and years to happen…there are over 100 countries that are either studying, researching or testing a version of CBDC. It has launched in The Bahamas, Nigeria & the Eastern Caribbean Union. Countries testing CBDC in pilot projects include Sweden, China, Jamaica, Ukraine. India, Eurozone and the USA.
Pro’s
So we basically know what it is and isn’t. So why the push for it? There’s tons of opinions on this, but lets start with those listed by it’s advocates. They all stick to the same basic narrative, so this should be easy. The advocates include global monetary managers, the WEF, the IMF, the US Fed and various governments around the world.
Simplifying Monetary Policy Implementation
One major challenge with traditional monetary policy implementation is that it depends on intermediaries within the financial system. As wholesale CBDCs streamline the flow of funds in financial institutions, retail CBDCs establish a direct connection between central banks and the citizens that use their currency. This connection to end users effectively improves the process of implementing policies, as the central bank has first-hand knowledge of users’ needs.
Financial Inclusion
CBDCs make fund distribution much easier. They potentially provide more financial inclusion by making services available to people or regions with limited banking opportunities. With CBDCs, central banks can extend access to basic financial services without building an expensive banking infrastructure.
Efficient Cross-Border Transactions
CBDCs enable faster and more secure fund remittance between countries. This significantly reduces the transaction fees required to send and receive funds to and from citizens in the diaspora, as well as allows the transactions to be completed in seconds or minutes instead of days or weeks.
Further Deter Illegal Financial Activity
A distributed and transparent ledger makes it easier for central banks to keep track of transactions and prevent illegal activity. Moreover, where these illicit transactions occur, they are easier to trace, and could even be reversed or frozen.
Growth of the Fintech Sector
CBDCs support the growth and development of the fintech industry. With the global adoption of CBDCs, the fintech space is gradually witnessing a new technological landscape that creates new jobs and opportunities.
Basically, it’s cheaper to run and administrate; it cuts out the middleman (bank/financial institutions); it’s more secure because its regulated; the governing central bank tracks transactions via Distributed Ledger Technology (DLT); it can be frozen or charges/payments reversed; the governing central bank sets the value; it makes a currency account more available to the underserved (no banks needed) and it fosters growth in the Financial Tech sector…well because it’s tech.
Con’s
As you can imagine, there are a boat load. I’ll try and cover the big ones, but this rabbit hole goes on for miles…and rightly so.
Traceability and Lack of Anonymity
Since central banks manage CBDC transactions through a ledger, they have full control over transaction records. This method does not allow for user anonymity and is in direct contrast with the anonymous nature of most other cryptocurrencies and cash.
Threat to Privacy
Privacy is one of the key drivers behind cryptocurrency adoption. CBDCs may require that central authorities intrude on private users to monitor transactions and combat financial crimes like money laundering. No longer will there be private transactions, as everything is recorded on a ledger controlled by the country’s central banking entity.
High Risk of Cyber Attack
A central bank’s digital currency may attract malicious parties who want to swindle large amounts of money from one source. CBDCs must use top-of-the-line cybersecurity measures to prevent breaches effectively.
Seamless Integration with ESG or any Social Credit System
Since the Central Bank is the Government, any Social credit scoring system they implement, can easily be integrated into the system. Digital wallets and the spending of the digital funds in that wallet, will be regulated and controlled. Unlike paper money, which provides spending sovereignty, CBDC will me monitored, allocated and investigated…constantly.
Other Considerations
Disintermediation of commercial banks if consumers move money from bank accounts into CBDC. This could start a vicious cycle as banks raise deposit rates to attract more money. In turn, this means less bank credit extended at higher interest rates.
Since the DLT will be administrated and regulated by the government, the risk of manipulation (to hide insider trading, illegal funding/donations or purchases) by those same government officials exists.
Something I have yet to see discussed…taxation, on person to person transactions. The most common examples, of these types of transactions are Craigslist purchases…non-retail cash sales…and income. Since there’ll be no more anonymous cash, these types of transactions will come under the scrutiny of the Central Bank DLT. Will there be sales tax automatically deducted from the purchaser and an income tax charged to the seller?? It sound preposterous, until you remember the Federal government is hiring 87,000 new IRS agents. Does that sound like a system, that would let even the smallest tax opportunity slip by?
Ok so what is the worst that can happen?
I was going to write up a “Digital Currency Monday” scenario, but came across a piece on the Blaze’s website, that is far better than anything I could do. The link to their website is at the end of the story. I urge you to go read the entire article, as it provides a more in depth explanation of this issue. Note…in the story the term “Stimmie” is a euphemism for “Stimulus”. Enjoy!!
You awake to find that today is special: It’s Stimmie Day! When you roll over and check your phone, you see a notification from your FedWallet app letting you know that another $2,000 in FedCoins has just been added directly to your account by the U.S. Federal Reserve.
To be honest, part of you would love to save that money for the long term, given that things have been getting rather uncertain and actually kind of crazy lately, what with the war and the economy and all…but you can’t, since these FedCoins are coded as usable for consumer purchases only and will expire and vanish in seven days. So you’d better spend ‘em while you’ve got ‘em!
The latest PlayBox it is then. Everyone says Elden Ring 3 is the hottest VR game on the Metaverse right now, and you’ve really wanted to join in. Since you’re stubbornly old-fashioned, you decide to check it out at BezosMart on the way home from work today, before you get it delivered by drone, to your tiny apartment.
But first you begin your day as you always do, with a quick stop at the local Starbrats’ automated, no-contact drive-through latte dispensary. Opening your FedWallet app and vaguely waving your smartphone at the machine is enough to complete the transaction. $14 in FedCoins are instantly deleted from your digital account at the Fed and recreated in Starbrats’ corporate account, well before the sweet, coffee-flavored milk beverage is deposited into your eager, grasping hands.
Your morning starts to go downhill quickly, however, when you realize that your SUV is almost out of gas. You pull the old clunker, with its antiquated combustion engine, into the nearest open station you can find — it looks pretty run-down — and roll up to the pump. A dull-eyed teenager in a face mask inserts a nozzle into your vehicle and waits for you to pre-pay. You wave your phone at the pump. Nothing happens. You try again. Your phone buzzes, and you look at it. There’s a message from the Fed: “You have already spent more than the $400 maximum weekly limit on fossil fuels specified in the FedWallet User Agreement. Your remaining account balance cannot be used to purchase non-renewable energy resources. Please make an alternative purchase. Have you considered a clean, affordable New Energy Vehicle? Thank you for doing your part to build a more just and sustainable world!”
You have in fact considered purchasing a clean, affordable New Energy Vehicle. But they still aren’t very affordable for you, what with the supply chain shortages. Despite the instant credit the Fed would add to your balance when buying an electric car — plus the permanent 10% general subsidy you automatically receive, on every purchase as a BIPOC individual, thanks to the Fed’s Reparations Alternatives for Comprehensive Equity (RACE) program — the down payment on a new car would still be more than you can afford, even with your new stimmie coins.
Well, you’re not going to be able to make it to work at the warehouse on what you have in the tank. How could you be so foolish? You’re going to have no choice, but to park here and blow a bunch of money on hailing one of those sleek, incredibly expensive self-driving electric cabs, to take you there instead. But as you’re about to tap the screen to do so, you notice there’s a classic fast-food joint next door. Might as well head there first to unload a little stimmie money. Nothing makes you feel better, than a greasy breakfast sandwich.
Entering the establishment and sidling up to the old touchscreen kiosk, you order a McKraken, with extra bacon. But when you wave your phone to pay, an error message pops up again. “You have exceeded your weekly purchase limit for complex animal protein, as stipulated in the FedWallet User Agreement. Have you considered purchasing a delicious vegan or mealworm alternative? Thank you for doing your part to build a more just and sustainable world!”
This is a sandwich too far for you, during an especially hard week. “Ugh FedWallet is so f***ing lame!” you post on Twatter as you idle hungrily in front of the kiosk.
“Your message has been flagged for review,” says an immediate notification. “As a reminder, using ableist hate speech may impact your ESG score and future financing opportunities. Thank you for doing your part to build a more just and inclusive world!”
“Omg this is absurd, life was so much better before FedCoin, when we still had cash!” you post again to Twatter, unable to control yourself.
“Your account has been locked pending national security review,” says a notification from FedWallet. “As a reminder, the proliferation of false or misleading narratives which sow discord or undermine public trust in government institutions, is classified as a potential domestic terrorism offence, by the Department of Homeland Security. We value your feedback.”
You jerk awake, fumbling at your phone with trembling, sweaty fingers. Oh thank God, it was all just a terrible dream! You just dozed off while reading Rod Dreher’s blog. You can still eat all the steak and bacon you want. There’s nothing to worry about ...
But no, you’re actually reading Politico and see with horror that President Biden has just released a “sweeping” executive order directing the government to immediately begin moving to comprehensively regulate cryptocurrencies while developing a digital dollar issued by the Federal Reserve. “My Administration places the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC,” he declares, in a line probably narrated in a creepy whisper.
You are wracked by foreboding amid the sudden cawing of ravens.
https://www.theblaze.com/op-ed/just-say-no-to-central-bank-digital-currencies
Here are a few more scenarios to add to that story…
- Carbon spending - it’s not hard to imagine that this would be a category, in an ESG system. As in the story above, gas would be part of the all encompassing category. It would also include air travel; residential non-green electrical/gas use (heating-cooling-appliances, etc.) propane gas purchases and more…let your mind go wild…because the government assuredly will. If you spend your carbon allotted CBDC, halfway into the month, will they turn off your power or HVAC? We have already seen power companies throttle smart thermostats…so why not?
- As in the story above, purchases will be limited or denied, based on what you have spent or what you are trying to buy. What if you buy something that is deemed subversive…maybe visit a web site that questions the regime…could your digital wallet be frozen??
Jordan Satchel has a great post on the Federal Reserves recent moves toward a social credit scoring system, based on ESG. Read and apply it, to what we have covered here.
That was a quick and dirty explanation of a very heavy subject. I am sure I missed quite a few aspects and talking points, so please feel free to weigh in.
I would also like to hear your ideas on preparing for this eventuality.
My personal approach is the same, as preparing for the pending financial crash. Whether it be food shortages or CBDC, the barter system is going to return and I’m constantly gathering items, that have always been wanted in past crises…alcohol, tobacco, firearms, ammo and precious metals. Also, Food staples (dry goods) are high on my list.
The old adage of “prepare for the worst and hope for the best”, rings truer and truer, with each passing day.
Thank you very much.
Your hard work, clear explanation and help are greatly appreciated.
Wishing you well.
I agree, we can't stop it. As it's programmable, we will be coerced into vaccines and told what and where we can eat and shop. For people like you and me, we will be fined or punished for speaking out. It's going to be a nightmare.