At The Crypto Con, I have repeatedly made it clear that I believe digital currencies such as Bitcoin are nothing more than a global psy-op.
The mainstream media encourages us to believe that Bitcoin emerged thanks to the work of a single anonymous individual, the now-infamous Satoshi Nakamoto, who to date, hasn’t made a penny profit from his creation. Likewise, the same mainstream media encourages us to believe that the emergence of other altcoins, which now make up a $4 trillion+ digital currency market, has been a 100% grassroots, community-driven response to the arrival of Bitcoin.
Sadly, I’m a little cynical.
My belief is that one or more three-letter government agencies, like the CIA, are the real founding fathers of the current cryptocurrency market. It is also my belief that the gradual popularization of cryptocurrency is nothing more than a purposeful attempt to condition society to accept a completely cashless future. More specifically, a future where the majority of Western fiat currencies (the currencies we use today) are superseded by Central Bank Digital Currencies (CBDCs). The only question is, what are CBDCs, and why are they so controversial?
Central Bank Digital Currencies (CBDCs): A New Era of Financial Control
Imagine if every penny you ever spent, from womb to tomb, was traceable back to you. Now imagine that throughout your life, a sophisticated AI monitors every financial transaction you ever authorize. It knows everything about you, from your favorite ice cream flavors to the movies you watch, how often you cheat on your spouse, and even where and for how long.
Now imagine that the AI, which knows your spending habits better than you do, can restrict how you use the money you think is yours.
It can stop you from ordering takeout. It can prevent you from filling your car or using public transport. It can automatically deduct fines from your bank balance. It can even dictate how long you have to use your next paycheck before any remaining money in your bank expires. This, in a nutshell, is what CBDCs are.
As Catherine Austin Fitts, former United States Assistant Secretary of Housing, puts it, CBDCs are the complete antithesis of cash as we currently know it. Rather than being a convenient digital replacement for cash, CBDCs represent a new “control grid” form of currency, one designed to give central banks and governments unprecedented authority over how, when, and where money is used.
What Are CBDCs?
CBDCs are digital currencies. However, they couldn’t be more different from digital currencies like Bitcoin.
While there are some exceptions, digital currencies like Bitcoin are designed to be decentralized. This means that transactions process independently of banks, governments, corporations, and other central authorities. In most cases, cryptocurrency users are also solely responsible for the safe storage of the digital currency they own. As a result, digital currency balances cannot be frozen or interfered with by third parties.
By comparison, Central Bank Digital Currencies (CBDCs) are digital currencies issued by a central bank, like the Federal Reserve or the Bank of England. Moreover, unlike physical cash, which allows for anonymous transactions, CBDCs operate within a fully digital financial system, enabling central banks to track, regulate, and control every transaction.
Most people are aware that much of the cash we currently use exists solely as numbers on a computer screen. However, at present, we can still, if we choose, withdraw onscreen balances as physical cash.
Likewise, when we spend cash electronically, transactions process completely differently than Central Bank Digital Currency transactions are designed to in the future.
At present, when you swipe your card in a grocery store, your bank or credit card issuer merely validates whether you have enough credit or money in your account to cover the cost of a transaction. However, as made clear by Bo Li, former Deputy Managing Director of the IMF, future CBDC bank balances will be programmable. This means that although you may have enough money in your account to settle a grocery store bill, future transactions may be declined if you have been preemptively restricted from purchasing certain goods or services.
CBDCs Are Already in Active Development
If you are not worried about how CBDCs might one day impede your financial future, you should be. For several years already, institutions like the Bank for International Settlements (BIS), based in Basel, Switzerland, have been working with major central banks, including the Federal Reserve, to prototype and test CBDCs worldwide. This is despite assurances by the likes of the current Trump administration in the U.S. that a CBDC implementation of the dollar isn’t even open for discussion.
One Rule for You – Another for the Powers Governing You
The greatest risk that CBDCs impose on populations lies in the fact that future Central Bank Digital Currencies will likely be linked directly to individual digital identities. These are not just digital versions of passports, driver’s licenses, and national ID cards. Rather, we’re talking about centralized ID databases which verify individuals via the social media accounts they use, their medical records , their academic records, vaccine records, travel and military service records, and even workplace training records.
The goal will be to create a complete digital profile of every CBDC user to predict and augment their spending habits.
- Did you serve in the last war but later question the lack of services for veterans or even the legitimacy of the war itself? If so, you may be restricted from buying firearms or donating to certain charities or political causes because your donation might be flagged as having an unfair risk of bias.
- Are you looking to secure a loan to start a business but have a habit of indulging in junk food? If so, is there a likelihood that you will succumb to cancer or heart disease, as evidence shows your parents did or your now-public 23andMe data shows your ancestors did, before your loan is repaid?
Make no mistake: CBDCs aren’t equivalents of the digital cash you see on a screen today or the get-rich-quick cryptocurrencies you keep hearing others talk about.
Rather, CBDCs are an entirely new form of smart money, which issuing banks will always presume to know how to spend better for your benefit than you do. That said, the same rules that apply to you don’t apply to them.
In the United States alone, fiscal rules like the Federal Accounting Standards Advisory Board Statement 56 (FASAB 56), implemented in 2018, allow the U.S. federal government to obscure portions of its financial statements through secretive processes. At present, this policy sees over $21 trillion in undocumented adjustments identified in federal accounts since 1998 simply vanish into thin air.
(Keep in mind, by the way, that the U.S. is currently $31 trillion+ in debt.)
Put simply, CBDCs will give governments and central banks the ability to scrutinize and possibly restrict every penny you ever spend in the name of fighting terror, climate change, tax avoidance, election fraud, or even financial inequality. However, you will never be able to hold banks and governments accountable for holes in their own budgets, no matter how massive.
They might let you try. However, you’ll probably find all your finances frozen before you’ve had a chance to get out of the parking lot.
Programmability of Currency Is Nightmare Fuel
The idea that someone can preemptively program how you spend your paycheck every month will no doubt seem absurd to the average reader here. After all, this is something completely alien to the history of money as we know it. However, as described by Bo Li, former Deputy Managing Director of the IMF, programming how people use money is already a done deal.
Programmability, even at a basic level, allows central banks and governments to embed specific rules and conditions into the currency itself. CBDC transactions can subsequently be programmed to restrict usage to certain purposes, such as food purchases or welfare payments, or to limit transactions based on geographic location, time, or compliance with government mandates. This capability is enabled by advanced technologies like artificial intelligence (AI) and cloud computing, which allow for real-time monitoring and enforcement of these rules.
These rules can track every dollar spent, by whom, and for what purpose. Moreover, this level of control can allow authorities to freeze accounts, impose negative interest rates, or even tax accounts directly, as noted by Neel Kashkari, President of the Minneapolis Federal Reserve.
We have also seen a test run of the power of CBDCs during the COVID-era Canadian trucker protests, when the bank accounts of protesting truckers were frozen in tandem with funds meant for truckers from wider community fundraising efforts. The Canadian government effectively de-banked thousands of Canadians to prevent civil unrest, even though doing so prevented those affected from purchasing basic essentials like food, fuel, and water.
Let’s Not Talk About the Unexpected
In case I haven’t been 100% clear, there is no cash in a CBDC economy. There is no such thing as an emergency fiver or $5 note squirreled away in a home safe that you can turn to when you are broke.
In a CBDC future, physical cash is just a souvenir from yesterday. It holds no value.
One question therefore persists though: Namely, what happens to the economy during a power outage or an attack on the basic IT infrastructure that the powers that be rely on to keep the future CBDC economy running?
As it stands, the proverbial powers that be have no answer for this just yet. Make no mistake, though: if they want to see you starve, you’ll starve.