It looks like Bitcoin has made the central bankers at the BIS a little bit nervous. BIS General Manager Agustin Carstens has been a pretty harsh critic of cryptocurrency, but now it appears that the BIS may be designing their own Central Bank Digital Currency (CBDC).
Both Carstens and IMF head Christine Lagarde have been beating the drum for a new kind of currency in recent months. The nature of modern money lends itself to digitization, and it looks like the global central banks may be on the cusp of launching new kinds of digital money.
The Opposite of Bitcoin
From the looks of it, it is fair to say that CBDC’s will be the opposite of Bitcoin. Instead of allowing people to deal with each other on a peer-to-peer basis, a CBDC would eliminate commercial banks, and give the central banks total control over the global money supply.
From the BIS’ final quarterly report of 2017:
Like cash, a CBDC could and would be available 24/7, 365 days a year. At first glance, not much changes for someone, say, stopping off at the supermarket on the way home from work. He or she would no longer have the option of paying cash. All purchases would be electronic.
The report goes on the say that:
This (new CBDC) could be based either on digital tokens or on accounts. That would mean that you and I could open bank accounts directly with the central bank…From here, differences start to emerge. A CBDC is not necessarily anonymous, like cash. And unlike cash, it could pay or charge interest.
So basically, the global central banks would become the only entities that were allowed to issue money, and people would have to use the system. Also, all transactions could be recorded, and cash would be a thing of the past.
Maybe This isn’t a Great Idea?
There is a long history of power-mad people who create systems that give absurd amounts of control to a few people. Central banks arguably have way too much power as it is. CBDCs would amplify that power, which is probably a bad idea.
Also, just look at Agustin Carstens.
Seriously, Google his name.
Does that look like the kind of guy you want controlling the entire global monetary system from a giant tower is Switzerland?
Bitcoin was founded on the idea that central banking has gone way too far. Now the central banks are using the Bitcoin boom to sell an idea that would further consolidate their control over the world economy.
Perhaps there will be a bull market in pitchforks and kerosene coming down the line. It’s never too early to stock up!