The Chilling Reality of CBDCs.
Updated: Sep 21, 2022
FedNow pilot. On August 29, 2022, the federal reserve announced that by next summer, they will begin the FedNow pilot, with over 120 companies signed up to participate in this pilot program, including every major bank.
"Today, with the FedNow launch date in sight, we are pleased with the collaboration and dedication our pilot participants have brought to advance modern payments in America," said Esther George, president and CEO of the Federal Reserve Bank of Kansas City and executive sponsor of the FedNow program.
V1 of CBDC. This is the rails for a new CBDC. Historically, banks used to issue notes for gold, and it was a challenge to redeem at any other bank besides the bank where your gold was deposited. As people began to travel more, banks began communicating with each other and batching transactions each day to settle the totals at the end of the day. The system still works this way today, but with modern technology like crypto, payments can be instant with instant settlement. There’s no gold in the vaults anymore, so why are we acting like there still is? With modern technology we can have instant 24/7 settlement.
Ripple is actively marketing to global governments to use its private ledger for CBDCs, and the ripple army is expressing excitement at the prospects of a US CBDC. However, just like they lied in the past about several non-existent use-cases, this seems to be another fabrication by the ripple army.
Why roll the CBDC out in baby steps? If something as drastic and tyrannical as this was rolled out overnight, everyone would reject it. With baby-steps, people may not notice what’s happening,
CBDCs are the opposite of Bitcoin. Where Bitcoin has a public ledger and can’t be altered, it’s decentralized, transactions are irreversible, identity is not linked to the wallet address, and its control is spread amongst a network of users around the world. No one party can change the rules or the supply, unless everyone else in the network agrees. The 21 million cap makes it a deflationary asset.
CBDCs are dangerous. CBDCs, however, are the exact opposite, they can be created out of thin air with no supply cap. It's a private ledger based system that will be linked to each person’s identity - maybe even via a microchip system. It will allow the central bank to easily expand or restrict the monetary supply. With this programmable money, it can be added to people’s wallets easily in the form of universal basic income or other welfare checks, and it can also be deducted for any kind of parking ticket, or tax. Every purchase you make will be recorded, if you buy a gun/bitcoin/a book in 2025, and that thing becomes illegal in 2026, your wallet could be turned off until you comply by turning in that certain asset to the government. Likewise, it will make forced medical procedures “in the name of public safety” a lot easier to enforce. If climate change continues on its current trend, the CBDC will allow the government to cap its people’s spending on activities that it deems high ESG risks, like steak dinners, or traveling.
Resist. This type of tyranny and control should be resisted with every fiber of our society, however as we recently saw from the pandemic, most people trust the government and will line up for a free donut to comply with whatever they are told on the news.
Swift. - As if the 105 countries already exploring CBDCs weren't bad enough, imagine a global system with just one overarching dictator. The [USA based] Swift system is seemingly building just that. If each central bank uses a different technology for their CBDC, Swift has highlighted the risk that the system will be fragmented, which could cause friction in overseas payments.
Banks will fail. While all this development is underway, the banks have to be a bit worried that they are about to become obsolete. Warren Buffett sold a lot of his bank stocks, except for Bank of America.
The Bitcoin threat. Notably, the Bitcoin network is not one of the 120 corporations signed up to participate in the Fed Now pilot. Bitcoin poses a major threat to the CBDC because it’s already distributed globally and people have been buying it for the past 12 years. It may not ever become a mainstream currency, but hopefully it will be accepted on a barter system even after the CBDCs roll-out.
ESG narratives. Today the Biden Administration’s office of Science and Technology released an interagency report stating that people are dying due to climate related deaths - caused by heat waves, loss of forests, wildfires, flooding, damages to roads and bridges, and harm to the ecosystems that sustain people. They calculated the climate change damage for 2021 to have cost taxpayers $145 billion, and blamed climate change for reducing the GDP by up to 10%. Their goal is to reduce GHG emissions by 50% by the year 2030 and to prioritize environmental justice.
To achieve this goal, the Environmental Protection Agency and Department of Energy are tasked with providing technical assistance to the crypto asset industry to develop effective, evidence-based environmental performance standards for the responsible design, development, and use of environmentally responsible crypto-asset technologies. These should include standards for low energy intensities, low water use, noise generation, clean energy use. If these measures prove ineffective, the Administration should explore executive actions to eliminate the use of high intensity consensus mechanisms for crypto asset mining.
Wartime HODL. If or when a war happens, the state will grab as much power as it can, and personal liberties and private sector interests will be pushed aside in favor of wartime efforts. In previous wars, there were shortages of milk, bread, butter, sugar, and labor. There was also a ban on gold, and rules implemented that forbade people from sending gold or money overseas.
With a CBDC, these kinds of state interests can be implemented with ease.
The time to buy Bitcoin is now, while you still can. Once your assets are frozen or converted to CBDC, you may not be able to exit the system.
By Sasha Hodder, Crypto Attorney & Bitcoin Enthusiast