Why CBDCs Must Be Terminated Before They Go Live
Iain Davis
March 6th
In Part 1
we noted that "money" is no more than a medium of exchange. If we
cooperate in sufficient numbers, we could create an economy based upon
an entirely voluntary monetary system. We don't need banks to control
our exchange transactions and modern Distributed Ledger Technology (DLT)
has made voluntary exchange on a global scale entirely feasible.
We contrasted the true nature of “money” with the proposed Central
Bank Digital Currencies. CBDC is being rolled out across the world by a global public-private partnership . What we call money is actually fiat currency conjured out of thin air by central and commercial banks. Even so, CBDC is nothing like “money” as we currently understand it.
Prior to the pseudopandemic, fiat currency circulated in a split-monetary circuit.
Only commercial banks could access a type of money called “central bank
reserves” or “base money.” In late 2019, the global financial
institution BlackRock introduced a monetary plan that advocated “going
direct” in order “to get central bank money directly in the hands of
public and private sector spenders.”
We discussed how the idea of putting “central bank money” directly
into the hands of “private sector spenders” is precisely what that new
CBDC based IMFS is designed to achieve. But CBDC will accomplish far
more for the global parasite class than merely revamp its failing “debt” based IMFS.
If it is universally adopted, CBDC will afford the bankers complete
control over the our daily lives. The surveillance grid will be
omnipresent and every aspect of our lives will be engineered.
CBDC is the endgame and, in this article, we will explore how that game will play out.
If we allow it.
Contrary to the stories we are told, central banks are private corporations.
These private corporations operate a global monetary and financial
empire that is overseen and coordinated by the Bank for International
Settlements (BIS).
The BIS does not come under the jurisdiction of any nation state nor
intergovernmental organisation. It is exempt from all “law” and is
arguably sovereign over the entire planet. As its current monetary system power-base declines, it is rolling out CBDC to protect and enhance its own power and authority.
While a “most likely” CBDC “platform” model has emerged, there is, as
yet, no agreed single technical specification for CBDC. But, for the
reasons we discussed previously,
it is safe to say that no national model will be based upon a
permissionless DLT—blockchain or otherwise—and all of them will be
“interoperable.”
In 2021 the BIS published its Central bank digital currencies for cross-border payments report. The BIS defined “interoperability” as:
The technical or legal compatibility
that enables a system or mechanism to be used in conjunction with other
systems or mechanisms. Interoperability allows participants in different
systems to conduct, clear and settle payments or financial transactions
across systems
The BIS’ global debt based monetary system is “tapped out” and CBDC
is the central bankers’ solution. Their intended technocratic empire is
global. Consequently, all national CBDCs will be “interoperable.”
Alleged geopolitical tensions are irrelevant.
The CBDC Tracker from
the NATO think tank, the Atlantic Council, currently reports that 114
countries, representing 95% of global GDP, are actively developing their
CBDC. Of these, 11 have already launched.
Just as the pseudopandemic initiated the process of getting “central
bank money” directly into private hands so, according to the Atlantic
Council, the sanction response to the war in Ukraine has added further
impetus to the development of CBDC:
Financial sanctions on Russia have
led countries to consider payment systems that avoid the dollar. There
are now 9 cross-border wholesale CBDC tests and 7 cross-border retail
projects, nearly double the number from 2021.
That this evidences the global coordination of a worldwide CBDC project, and that the BIS innovation hubs have
been established to coordinate it, is apparently some sort of secret.
China’s PBC, for example, is a shining beacon of CBDC light as far as
the BIS are concerned:
improving cross-border payments
efficiency is also an important motivation for CBDC work. The
possibilities for cross-border use of retail CBDC are exemplified by the
approaches in the advanced CBDC project in China
The People’s Bank of China (PBC) has been coordinating its CBDC cross-border payment development through the m-Bridge CBDC project run by the BIS’ Hong Kong innovation hub.
Supposedly the Central Bank of the Russian Federation (CBR – Bank of
Russia) was suspended by the BIS. All we have to substantiate this claim
is some Western media reports, citing anonymous BIS sources, and an ambiguous footnote on a couple of BIS documents. Meanwhile, the CBR is currently listed as
an active BIS member with full voting rights and no one, either from
the BIS or the CBR, has made any official statement in regard to the
supposed suspension.
The CBR’s cross-border CBDC development is based upon two of the
three BIS m-Bridge CBDC models and it is testing the “digital ruble” with the PBC .
As the PBC is BIS m-Bridge development “partner,” alleged suspension or
not, there is no chance that the “digital ruble” won’t be interoperable
with the BIS’ new global financial system.
The Society for Worldwide Interbank Financial Telecommunication
(SWIFT) provides the world’s most pervasive encoded inter-bank messaging
system. Both central and commercial banks, as well as other private
financial institutions, use SWIFT to securely transmit transaction data.
There are a number of SWIFT alternatives. For example, the CBR
developed its parallel System for Transfer of Financial Messages (SPFS)
in 2014 which went live in 2017. A number of Russian banks have also been using the PBC’s China International Payments System (CIPS).
CIPS was developed by the PBC in partnership with SWIFT, and both the PBC and the CBR started collaborating in earnest on a potential SWIFT replacement as a result of the Western monetary sanctions imposed upon the Russian Federation.
None of the various communication layer technologies are financial
systems in and of themselves, but they enable banks, trading platforms,
clearing houses, payment processing systems and all the other elements
of the global financial system to communicate with each other. For CBDCs
to be successful they need to be interoperable both with these systems
and with each other.
Interoperability also extends to existing fiat currencies and other financial assets, such as mortgage backed securities and exchange traded funds (ETFs).
These assets, funds, currencies and securities, etc. can be
“tokenised.” As can practically any physical or virtual asset or
commodity.
Hidera, a distributed ledger technology company that uses the
hashgraph based DLT—a blockchain alternative—is backed by a number of
wealthy global corporations. The company explains the asset tokenisation (or tokenization) process:
Asset tokenization is the process by
which an issuer creates digital tokens on a distributed ledger or
blockchain, which represent either digital or physical assets. Suppose
you have a property worth $500,000 in New York, NY. Asset tokenization
could convert ownership of this property into 500,000 tokens — each one
representing a tiny percentage (0.0002%) of the property. The
possibilities are endless as tokenization allows for both fractional
ownership and proof-of-ownership. From traditional assets like venture
capital funds, bonds, commodities, and real-estate properties to exotic
assets like sports teams, race horses, artwork, and celebrities,
companies worldwide use blockchain technology to tokenize almost
anything.
The ability to trade tokenised assets internationally in any market,
using CBDC, will facilitate the creation of a new CBDC based IMFS.
Futhermore, digital “tokenisation” means anything can be converted into a
financial asset.
For example, the BIS’ Project Genesis tokenised “government green bonds.” The World Bank explains “green bonds”:
A bond is a form of debt security. A
debt security is a legal contract for money owed that can be bought and
sold between parties. A green bond is a debt security that is issued to
raise capital specifically to support climate related or environmental
projects.
Using CBDC’s added “smart contract” functionality, Project Genesis
appended “mitigation outcome interests” (MOIs) to their green bond
purchase agreements. When the bond matured, in addition to any premium
or coupon payments from the bond itself, the investor received verified
carbon credits. The carbon credits are also tradable assets and they
too can be tokenised.
Tokenised assets, traded using the CBDCs that central banks create
from nothing, will generate almost limitless permutations for the
creation of new markets. Subsequent profits will soar.
This “financialisation of everything” will further remove an
already distant financial system to from the real, productive economy
the rest of us live in. Needless to say, “interoperability” is a key
desired “feature” of CBDC.
The BIS published its Project Helvetia report
in December 2020 which demonstrated proof of concept for the settlement
payment for “tokenised assets” using CBDC. SWIFT subsequently published
the findings from its Connecting Digital Islands: CBDCs modelling experiment in October 2022.
SWIFT’s stated objective was to link various national CBDCs to
existing payment systems and thereby achieve “global interoperability.”
SWIFT was delighted to report:
These new experiments have
successfully demonstrated a groundbreaking solution capable of
interlinking CBDC networks and existing payments systems for
cross-border transactions. Interlinking is a solution to achieve
interoperability This solution can provide CBDC network operators at
central banks with simple enablement and integration of domestic CBDC
networks into cross-border payments
In its associated press release, SWIFT announced:
Swift has successfully shown that
Central Bank Digital Currencies (CBDCs) and tokenised assets can move
seamlessly on existing financial infrastructure – a major milestone
towards enabling their smooth integration into the international
financial ecosystem.
Whatever CBDC design national central banks adopt, no matter which
inter-bank payment system they access—be it SWIFT, CIPS or some new
communication layer—global interoperability is assured. Thus many
different CBDCs can form one, centrally controlled International
Monetary and Financial System that will transact in near instantaneous real time.
Control of this CBDC system will also mean the centralised global
power to limit or block payments, target users, redirect funds, enforce
purchases, trade assets, add contracts, tax at source and generally
exploit any of the other endless range of “functions” CBDC is capable
of. In near instantaneous real time.
Jon Cunliffe, Bank of England (BoE) Deputy Governor for Financial Stability, launching the UK’s proposal for a “digital pound,” said:
There is scope for innovation to
generate further efficiencies in payments, allowing for faster and/or
cheaper payments. The digital pound could also complement existing
financial inclusion initiatives, for example if it were able to provide
for offline payments.
In its 2021 document on the Digital Ruble Concept, the CBR said that it had developed its Russian Ruble in response to:
growing demand from households and
businesses to improve the speed, convenience and safety of payments and
transfers, as well as for cost reduction in the financial sphere.
The claimed advantages of cost saving, efficiency, speed ,
convenience, financial inclusion, improved resilience, financial
security and so on, are trotted out time and time again. All of it is
part of a dangerous and completely disingenuous sales pitch deceiving
you into accepting your own monetary slavery.
Further on, the CBR reveals what has really spurred its development of the “digital ruble:”
smart contracts may also be used to
mark digital rubles, which will allow setting conditions for spending
digital rubles (e.g. defining specific categories of goods/services that
can be purchased with them) and tracing the entire chain of movement of
the marked digital rubles. Digital ruble settlements do not provide
for the anonymity of payments.
The digital ruble might initially seem more “convenient” but it is
also designed to enable the the Russian central bankers to identify
exactly who is buying what, anywhere in the country at any time. It will
also empower them to set the “contract” conditions which will determine
what Russians can buy, when and from whom. The central bankers will
decide what “choices” Russian CBDC users are allowed to make.
We should not be duped by the faux rationales offered by the
proponents of CBDC. Despite all the cosy rhetoric from the likes of the
CBR and the BoE, the real objective is to enhance the global power and
authority of bankers. As far as they are concerned, this power will know
no bounds.
For instance, Cunliffe added:
there are broader macro-economic and
geopolitical issues that need to be considered. The Bank of England is
working actively on these issues with international counterparts through
the Bank for International Settlements Committee on Payments and Market
Infrastructures (CPMI), through the G7, the G20 and FSB and through
close cooperation with a small group of advanced economy central banks.
Don’t be surprised that the central bankers consider geopolitics to
be within their remit. Their stated intention to “actively” work on
geopolitical “issues” has no “democratic” mandate whatsoever, but so
what? They don’t care, why should they? Who is paying attention? Must of
us are too busy worrying about feeding ourselves and paying our energy
bills.
The fact that bankers have long been able exert inordinate influence over geopolitics, economics and society has always been to our detriment. If we continue to neglect our duty to defend each other and ourselves, and if we blindly accept CBDC, the bankers’ power and authority will be immeasurable.
In 2020, the Russian Federation government amended its legal code with the “Law on Digital Financial Assets” (DFAs). The amendment regulated “non-cash ruble” DFAs. The CBR soon added its commercial bank partner Sberbank to the list of financial institutions authorised by the CBR to issue DFAs. In December 2022 Sberbank launched its “gold backed ” DFA offering “tokenised” gold.
Since 1971, when central banks finally abandoned any semblance of gold standard,
many have lamented the supposed loss of fiat currency’s “intrinsic
value.” The possible added “intrinsic value” of CBDC is apparently
enticing some to now welcome CBDC and, thereby, their own enslavement.
The Russian and Iranian governments have already proposed a possible gold-backed CBDC “stablecoin” for interoperable cross border payments. “Interoperability” suggests it could be “backed” by Sberbank’s tokenised gold DFA.
If this sounds suspiciously like a shell game that’s because it is. Nonetheless, some are convinced and have extolled the alleged virtues of this “gold backed” CBDC.
It makes no difference if CBDC is backed by gold, oil, nuclear
weapons or unicorn horns. All claims of its advantages are nothing but
CBDC flimflam.
No matter how it is spun, the brutal fact is that CBDC affords an
unimaginable degree of social control to those who program it. From our
perspective, unless we have completely taken leave of our senses,
nothing warrants taking that risk.
The BoE is among the central banks to reassure the public that it
won’t “implement central bank-initiated programmable functions.”
Elsewhere, it also claims that is a public institution, which isn’t true. So we have little reason to believe anything the BoE says.
Not that it matters much, because the BoE assurances given in its
CBDC technical specification don’t provide any reason for optimism:
Central bank-initiated programmable
use cases are not currently relevant to the Bank and HM Treasury’s
policy objectives for CBDC.
Perhaps “not currently” but it is reasonable to suspect that policy
enforcing programmable CBDC may well become “relevant,” don’t you think?
Especially given that the BoE adds:
The design of a UK CBDC must deliver
the Government and Bank’s policy objectives. Over the longer term,
innovation and evolving user needs may mean a broader range of CBDC
payment types could be offered. For example, offline and cross-border
payments could support public policy objectives.
As if this mealymouthed squeamishness wasn’t bad enough, the BoE then goes on to suggest we should welcome their dream of a stakeholder-capitalism CBDC Wild West:
he Bank would aim to support
programmable functionality These functionalities would be implemented
by PIPs and ESIPs, and would require user consent. PIPs could implement
some of these features, such as automated payments and programmable
wallets, by hosting the programmable logic . But other features might
require additional design considerations. he Bank would only provide
the necessary infrastructure to support PIPs and ESIPs to provide these
functionalities. An automated payment could be particularly useful in
IoT use cases. PIPs could host their own logic that triggers a
payment.
If the BoE don’t “currently” feel the need to program your “money,”
how about handing control over to HSBC, Barclays, Mastercard or PayPal?
They will program your CBDC to “deliver the Government and Bank’s
policy objectives” instead. Undoubtedly adding some lucrative “contract
logic” of their own along the way. What could possibly go wrong?
Let’s say EDF Energy is your energy provider. You could let
BlackRock, working in partnership with the manufacturers it invests in,
exploit the IoT to program your washing machine to automatically pay for
your energy use by deducting your “money” from your CBDC “wallet”,
subject to whatever “contract logic” BlackRock has agreed with EDF
Energy.
If you run a small UK business you could let your bank automatically deduct income tax from
your earnings and pay it directly to the Treasury. No need for the
inconvenience of self-assessment. CBDC will be so much more
“convenient.”
Of course, this will be entirely “optional,” although it may be a
condition of opening a business account with your bank. In which case
your CBDC “option” will be to work in a central bank managed CBDC run
business or don’t engage in any business at all.
How does that all sound to you? Because that is exactly the “model”
of retail CBDC that the BoE are proposing. So are nearly all other
central banks because CBDC is being rolled out, for all intents and
purposes, simultaneously on a global scale.
As noted in Part 1, the real nightmare CBDC scenario for us is programmable retail CBDC. In its proposed technological design of the disingenuously named “digital pound,” the BoE revealed that “retail CBDC” is exactly what we are going to get.
The BoE claims that CBDC is essential to maintain access to central bank money. This is only “essential” for bankers, not us.
It also alleges that its digital pound model has been offered to the
public merely for “consultation” purposes. Yet it has only offered one,
very specific CBDC design for our consideration. The only question
appears to be when we will adopt it, not if.
The usual flimflam, talking about inclusion, cost savings, offering
choice and yada yada, peppers the BoE’s statements and documents. The
BoE also lays out its retail CBDC panopticon.
The UK’s CBDC won’t initially target everyone. Speaking about the design of the digital pound, Jon Cunliffe said:
We propose a limit of between £10,000
and £20,000 per individual as the appropriate balance between managing
risks and supporting wide usability of the digital pound. A limit of
£10,000 would mean that three quarters of people could receive their pay
in digital pounds, while a £20,000 limit would allow almost everyone to
receive their pay in digital pounds.
If working people are “paid” in CBDC they won’t actually have any
“choice” at all. The low paid and those reliant upon benefits payments
will have no option but to use CBDC. The independently wealthy, for whom
£20,000 is neither here nor there, won’t.
Cunliffe’s comments highlight the possibility that savings can also
be limited in the brave new CBDC world. He clearly suggests that those
on low incomes won’t be able to hold more than CBDC-£20,000 and will
perhaps be limited to as little as CBDC-£10,000.
Unsurprisingly, the UK’s CBDC won’t be based upon a permissionless
DLT that could potentially grant anonymity, but rather upon, what the
BoE calls, its “platform model.” The BoE will “host” the “core ledger”
and the application layer (API) will allow the BoE’s carefully selected
private sector partners—called Payment Interface Providers (PIPs) and
External Service Interface Providers (ESIPs)—to act as the payment
gateways.
The PIPs and the ESIPs will be “regulated,” and will thus be
empowered on a preferential basis by the central bank. If CBDC becomes
the dominant monetary system, as is clearly the intention, by
controlling “access to the ledger,” all user transactions—our everyday
activity—will be under the thumb of a public private-partnership led, in
the UK, by the BoE.
While the majority of British people don’t have anywhere near £10,000 in savings,
the ability to control the amount we can save, and the rate at which we
spend, is a tantalising prospect for the central bankers. Add in the
ability to specify what we can spend it on and it’s their dream ticket.
The BoE wishes to impose the most oppressive form of retail CBDC
possible, but they aren’t alone. The Russian CBR’s model is one among
many others that are just as tyrannical. The Russian’s CBDC is also
constructed upon a “platform” model that is uncannily similar to the
UK’s.
Just like British citizens, Russian’s behaviour will be monitored and
controlled by their private central bank and its partners through their
CBDC “wallets.” The CBR’s “Model D” CBDC is also a “a retail two-tier model with financial institutions as settlement participants.”
The CBR states:
Digital rubles are unique digital
codes (tokens) held in clients’ electronic wallets on the digital ruble
platform. The Bank of Russia opens wallets for financial institutions
and the Federal Treasury while financial institutions open wallets for
clients on the digital ruble platform. Only one digital ruble wallet is
opened for a client.
Every Russian business and private citizen will each have one CBDC
wallet allocated to them by the CBR. Russian commercial banks will
enable the “client onboarding” to speed up adoption of CBDC. The
commercial banks and other “financial institutions” will then process
CBDC payments and act as payment intermediaries on the CBR’s Model D
“platform.”
The People’s Bank of China (PBoC) and the Reserve Bank of India (RBI)
are among those considering programming expiration dates into their
CBDC’s. This will ensure that Chinese and Indian CBDC users can’t save
and have to spend their issued “money” before it expires and ceases to
function. Thereby “stimulating” economic activity in the most “going
direct” way imaginable.
The BoE proposes exactly the same in its model of digital pound. The
BoE is reluctant to concede the use of its CBDC to enforce policy.
Instead, it has devolved this power to its commercial banks “partners”
which the BoE will then control through regulation:
A range of programmable features
might be enabled by providing API access to locking mechanisms on the
core ledger. This enables PIPs and ESIPs to facilitate more complex
programmable functionality off ledger. The funds would be locked until a
pre-defined condition has been met. The PIPs and ESIPs would host
contract logic on their own infrastructure, but would instruct the
release of funds via API to the core ledger. If the set conditions are
not met, all locks would have an expiry time where the funds are
released back to the original owner.
The BoE public-private partnership could, for example, program its
CBDC with an expiry date. The PIPs or the ESIPs could then modify the
program adding “more complex” conditions through their own “contract
logic” infrastructure. For example, the BoE could specify that the CBDC
your “wallet” will expire by next Wednesday.
A PIP or ESIP could add some contract logic to ensure you can only
buy Italian coffee—before next Wednesday. This could be enforced at the
point of sale in any retail setting (off ledger).
This is a silly example, but don’t be fooled into believing such an
excruciating degree of oppressive control isn’t possible. Programmable
CBDC, probably programmed by AI algorithms, is capable of enforcing an intricate web of strictures over our everyday lives.
Just as you can send an encrypted message to anyone else on the same
message app, so CBDC “smart contracts” can be tailored to the precisely
prescribe what you can or cannot do with your “money.”
The infamous quote, from a salivating BIS general manager Agustín Carstens, reveals why central bankers are so excited about CBDC:
We don’t know who’s using a $100 bill
today and we don’t know who’s using a 1,000 peso bill today. The key
difference with the CBDC is the central bank will have absolute control
on the rules and regulations that will determine the use of that
expression of central bank liability, and also we will have the
technology to enforce that.
We can look to other influential central bankers to appreciate what
kind of “rules” central banks might choose to “enforce” by exercising
their “absolute control.”
Bo Li, the former Deputy Governor of the Bank of China and the current Deputy Managing Director of the International Monetary Fund
(IMF), speaking at the Central Bank Digital Currencies for Financial
Inclusion: Risks and Rewards symposium, offered further clarification:
CBDC can allow government agencies
and private sector players to program to create smart-contracts, to
allow targetted policy functions. For example welfare payments ,
consumptions coupons, food stamps. By programming, CBDC money can be
precisely targeted what kind of people can own, and what kind of use
this money can be utilised. For example, for food.
Nigeria has already launched its eNaira retail CBDC. The Nigerian central bank and the BIS have immediately used it as a tool to roll out Digital ID:
Universal access to eNaira is a key
goal of the CBN , and new forms of digital identification are being
issued to the unbanked to help with access. When it comes to anonymity,
the CBN has opted to not allow anonymity even for lower-tier wallets.
At present, a bank verification number is required to open a retail
customer wallet.
The French central bank—the Banque de France—hosted a conference in September 2022 where US and EU central bankers decided that their retail CBDC would also force Digital ID upon
users. Indeed, all central banks have effectively “ruled out” any
possibility of “anonymous use” of their programmable money.
Most central banks and other
observers have, however, noted that the potential for anonymous digital
currency to facilitate shadow-economy and illegal transactions, makes it
highly unlikely that any CBDC would be designed to fully match the
levels of anonymity and privacy currently available with physical cash.
Once we have no option but to use CBDC nor will we have any but to
accept Digital ID. We will be fully visible on the grid at all times.
Currently if the state wishes to lockdown its citizens or limit their movement within 15 minutes of their homes they
need some form of legislation or enforceable regulation. Once CBDC
linked to Digital ID, complete with biometric, address and other
details, they won’t.
They can simply switch off your “money,” making it impossible to use
outside of your restriction zone. Potentially limiting you to online
purchases made only from your registered IP address. CBDC will ensure
your compliance.
It is no use imagining that “they wouldn’t do that.” They already
have, in our so-called liberal democracies. Numerous private payment
providers have removed access from those who, in their view, have expressed to wrong opinion.
When Canadians exercised their legitimate right to peaceful protest
and their fellow Canadians chose to offer their financial support to the
protesters, the commercial banks worked in partnership with the Canadian state to freeze protesters accounts and shut down their funding streams.
CBDC will make this a matter of routine, as targeted individuals are
punished for their dissent or disobedience. It stretches naivety to
wilful ignorance to believe that it won’t. We cannot afford to ever use
CBDC.
The whole point of CBDC is to control the herd and enhance the power
and authority of the parasite class. CBDC is a social engineering tool
designed to establish a prison planet. Unless you want to be a slave,
there is no legitimate justification for CBDC. Submitting to CBDC
enslavement truly is a “choice.”
Please share these articles. It is absolutely vital that as many
people as possible understand the true nature of CBDC. We cannot rely
upon the state or the mainstream media for anything approaching
transparency or honesty on the subject. With regard to our potentially
calamitous adoption of CBDC, they are the enemy.
Fortunately, if we decide to resist there
is no reason why we have to succumb to using CBDC. In order to
construct better systems of exchange that will render CBDC superfluous,
we have to come together in our communities. It won’t be easy and there are no simple solutions or one right answer but one thing is certain.
We cannot afford to ever use CBDC.
Source: https://iaindavis.substack.com/p/central-bank-digital-currency-is-359?publication_id=1149422&isFreemail=true
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