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Digital Dollar Is Closer Than You Think

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The Digital Dollar Is Closer Than You Think

 

In October 2020, China’s central bank embarked on a project that will change the nature of money forever…

It announced a special type of lottery…

The prize?

Free cash in the form of its new digital-only currency – the electronic Chinese yuan, or e-CNY.

The People’s Bank of China put 10 million yuan – or roughly $1.5 million – up for grabs in the southern city of Shenzhen.

Two million Chinese citizens applied. And 50,000 got a “red envelope” that deposited the digital-only currency through a government app on their phone.

For centuries, Chinese people have gifted money to each other in red envelopes. Some say the tradition dates to the Han dynasty about 2,000 years ago.

But these red envelopes were digital.

To use them, you simply downloaded the app and registered with the government. Then you could spend your digital cash with merchants across the city.

Since then, China’s central bank has been busy promoting this new digital cash…

Replacing Physical Cash

It’s rolled out pilot programs in two dozen other cities… paid government workers in e-CNY… and used the new currency to subsidize transport costs for students.

During the 2022 Winter Olympics in Beijing, it even pressured U.S. companies operating in China, including McDonald’s and Nike, to allow customers to use e-CNY.

It’s easy to see why China’s totalitarian regime wants to replace physical cash with digital-only transactions. It massively increases its surveillance and tracking powers… And totalitarian governments value control above all else.

In a world where all cash is digital and the government controls the payments system, no transaction – no matter how small – goes unnoticed.

What’s harder to understand is why America’s central bank, the Federal Reserve, is laying the foundations for a similar system.

A U.S. dollar version of China’s digital-only currency isn’t far off.

The “Curse of Cash”

U.S. financial elites have been making the case against cash for years.

Take Kenneth Rogoff. He’s a professor of economics at Harvard and the former chief economist of the International Monetary Fund.

In 2016, he published a book called The Curse of Cash. In it, he argues that the government should phase out physical cash from society.

Why?

To Rogoff, cash is something to be done away with. It aids criminals and people who want to evade the taxman. Here’s his solution…

All paper currency is gradually phased out, beginning with all notes of $50 and above, then the $20 bill, leaving only $1, $5, and (perhaps) $10 bills.

In the ideal world for Rogoff and financial elites like him, governments will oversee all cash transactions.

Physical cash payments will no longer be available… Because the government will no longer mint coins or print dollar bills.

Rogoff says this will stop criminals from stashing their ill-gotten gains in stacks of $100 bills.

But it will also kill off financial privacy.

Want to pay your gardener in cash? Or the babysitter? Or loan money to a friend in need without anyone knowing?

Forget about it. Only digitally traceable transactions will be allowed.

Is Financial Privacy Coming to an End?

A pioneering computer scientist named Paul Armer sounded the alarm back in the 1970s.

Armer headed the computer science departments at the RAND Corporation think tank and at Stanford University in the 1950s and 1960s.

And in June 1975, he issued a chilling warning about what would happen to our privacy if governments ditched physical cash and moved to a purely digital system.

In a talk at Stanford University titled “Computer Technology and Surveillance,” he warned such a system would become a powerful surveillance tool for the state.

And it’s worth taking seriously. Armer was astoundingly prophetic. He predicted the internet a decade in advance.

As he told folks who attended his talk at Stanford…

Five or ten years from now, most computers will probably be attached to a network or be reachable via a telephone number. And most will probably adhere to a standard protocol.

The official birthday of the internet is January 1, 1983. That’s when we adopted a protocol called TCP/IP. This allowed computers to communicate with one another on a network.

So Armer was almost eight years early on that call.

He also predicted a world in which almost everything we use contains a computer chip…

There will be several microprocessors in every car; trucks will probably have one at each end of every axle; there will be one in most appliances, and there will be one pasted on the back of every typewriter. I am sure there are countless uses that we don’t even dream of today.

But what worried him most was the idea of using computer networks for payments.

Armer compared what would happen to 1984

In George Orwell’s novel, a totalitarian superstate rules over a world in which individualism and independent thought are persecuted as “thoughtcrimes.”

Privacy and freedom are forbidden. The state controls citizens’ lives through ever-present surveillance.

And Armer believed electronic payments – what he called an electronic funds transfer system, or EFTS – would be a powerful and dangerous surveillance tool. As he put it…

Suppose for a minute all transactions over $10 must go through [the EFTS]. Thus the system not only collects and files a great deal of data about your financial transactions – and that means a great deal of data about your life – but the system knows where you are every time you make such a transaction.

Today, we’ve mostly forgotten this warning…

But governments haven’t given up on their dream of creating a surveillance state.

That’s why more than 100 countries around the world are putting plans in place for digital-only currencies.

That includes NewZealand and the US.

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2 COMMENTS

  1. The Fed just announced it will introduce its “FedNow” Central Bank Digital Currency (CBDC) in July. CBDCs grease the slippery slope to financial slavery and political tyranny. While cash transactions are anonymous, a #CBDC will allow the government to surveil all our private financial affairs. The central bank will have the power to enforce dollar limits on our transactions restricting where you can send money, where you can spend it, and when money expires. A CBDC tied to digital ID and social credit score will allow the government to freeze your assets or limit your spending to approved vendors if you fail to comply with arbitrary diktats, i.e. vaccine mandates. The Fed will initially limit its CBDC to interbank transactions but we should not be blind to the obvious danger that this is the first step in banning and seizing bitcoin as the Treasury did with gold 90 years ago today in 1933. Watch as governments, which never let a good crisis go to waste, use Covid-19 and the banking crisis to usher in a new wave of CBDCs as a safe haven from germ-laden paper currencies or as protection against bank runs.

    https://slaynews.com/news/biden-admin-digital-cash-key-duty-federal-reserve/

    The Philippines has recently announced that children who are four years old or younger can now register for the country’s digital ID system, which is called the Philippine Identification System or PhilSys.
    Meanwhile, starting in the last quarter of 2024, the government of the Cayman Islands has proposed a plan to issue eIDs, which are physical and electronic identity cards, to adults and children of all ages.

    https://www.sgtreport.com/2024/03/digital-ids-are-being-rolled-out-to-toddlers-and-children-in-the-philippines-and-cayman-islands/

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  2. Regardless of what we or our oppressors would like to happen human nature dictates that in the absence of an acceptable official currency then an unofficial one will develop.

    Whether it is silver ingots or canned sardines I know not but anyone who stockpiles quantities of the new exchange medium is going to make a killing.

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