THE BIS AND DIGITAL “CURRENCY”

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by Joseph P. Farrell, Giza Death Star:

(This week, due to company, I am on a reduced blogging schedule, and accordingly, there will be blogs today and Wednesday, and no blogs Tuesday, Thursday, or Friday. Thank you for your understanding and patience. )

G.B. spotted this article, and offered a few tangential but important comments. Essentially, it’s an “update” to the Bank of International Settlements’ plans to roll out digital currency, ultimately to replace cash:

BIS Innovation Hub: The Gradual March To Central Bank Digital Currency Continues To Advance

Essentially, there are two important points to note. Firstly, various central banks are already engaged in a limited roll-out of digital currencies:

The initial phase of the project saw Hub’s opened up in Switzerland, Hong Kong and Singapore. An operational agreement was signed with the Hong Kong Monetary Authority in September 2019, followed by an agreement with the Swiss National Bank in October. The Hub in Singapore began operations in November.

With phase one completed, the BIS have now moved into the second phase which they warned was going to happen when the Hub first launched. Accompanying the release of this year’s Annual Economic Report, the institution announced that the Hub is expanding to new locations in both Europe and North America.

Over the next two years, the Bank of England will be opening a centre, along with the Bank of Canada, the European Central Bank and four Nordic central banks (Sweden, Denmark, Norway and Iceland). A ‘strategic partnership‘ will also be formed with the Federal Reserve System.

East and West may appear divided in the geopolitical sphere, but in the world of central banking they are very much united behind the common goal of the Hub.

As the BIS outlined in a press release, the expansion will ‘allow Innovation Hub to spur central bank work across multiple fintech pillars‘. General Manager Agustin Carstens confirmed that the ‘new centres will expand our reach significantly and help create a global force for fintech innovation‘.

The second, and much more important point to note, is that the goal is both to digitize liquid assets and cash and essentially free this digitized currency from any connection to tangible and real assets, and to incorporate the “unbanked” or “underbanked” population of the world, some billion and a half people, into this system:

What central banks (in line with state legislatures) are not going to do is simply outlaw cash when CBDC’s become available. I believe what they want is for banknotes to dwindle to a level where they can make the argument that the servicing costs of maintaining the cash infrastructure outweigh the amount of cash still in circulation and being used for payment.

An Access to Cash report published in the UK last year warned that because of bank branch closures and the decline of ATM’s, Britain’s cash network was at real risk of collapsing. Introduce a CBDC into the equation and you can see how cash will soon be deemed nonviable. Those who might opt to use cash over a digital currency would eventually have no other option than to transfer their money into a CBDC.

One of the main goals of global planners is to target what they call the ‘unbanked‘ or the ‘underbanked‘. In other words, those who exist largely outside of the financial system and trade anonymously. The BIS Annual Report declared that 1.7 billion adults and hundreds of millions of firms ‘are tied to cash as their only means of payment‘. That is one fifth of the world’s population that central banks are seeking to bring into their world – a digital only construct in which the only alternative is a life of destitution.

Essentially, the central banking fraternity will want to be able to pinpoint the abolition of cash on the advancement of technology and the changing payment habits of the consumer, thereby taking the emphasis off themselves.

With regards to changing consumer behaviour, the unproven fear perpetuated throughout the media that cash could transmit Covid-19 has successfully managed to undermine cash to the point where a large swathe of people have stopped using it. The latest statistics from Link show that in the UK transaction volume is down 47% on this time last year.

Over time, central banks will be able to use a sustained reduction in demand for cash to their advantage. As Yves Mersch of the European Central Bank mentioned in May, ‘if our customers, the people of Europe signalled a change in payments behaviour, we would want to preserve their direct link to the ultimate owner of our currency by maintaining their access to central bank liabilities‘.

There are three problems here.

Firstly, notice where the earliest trials of digital currency were held: Hong Kong, Switzerland, and Singapore. As G.B. noted in the comments of the email accompanying the article, each place has been a hub of massive financial scandal and fraud in recent years. And as I and Catherine Austin Fitts have repeatedly warned, a move to a digital currency is a move to something which, in effect, is not a currency at all, simply because of the implied ability of central banks, at the push of a button, to modify the value of that currency at will. Say you leave your place of work with 15,000 digibooboos being deposited in your account. On your way home, you decide to stop and get some groceries. But Mr. Central Banskter needed some extra digibooboos to cover his margin calls, which amount to just a few quadrillions of digibooboos, so he decides simply to create more digibooboos at the push of a button. By the time you arrive at the checkout lane in the grocery store, the robocashier informs you that your grocery bill, which just a few seconds ago might have cost a mere 200 digibooboos, now comes to 14,000 digibooboos, leaving you to ponder whether or  not to buy your groceries and figure out  how to pay your mortgage (which, incidentally, is also digitized along with the title to your house), or abandon your purchase of mystery 3d-printed meat and GMO potatoes, and pay your mortgage (pronto!) before it too becomes too expensive to pay. You decide to do the latter, and rush to the nearest morgautpaycen (mortgage automated payment center), which informs you that, woops, your mortgage payment is now 15,500 digibooboos. Frantic, you try transferring money from your savings account to your transactions account, only to be told that Microsh*t corporation is interrupting the transaction to update the morgautpaycen system (and your “vaccine tatoos”) with the latest updates; please standby, this will take just a few minutes, and do not cancel the transaction. By the time this has ended, a line has formed, and you make the transfer and rush home, only to find the robosheriff has arrived and repossessed your home. In fact, it’s already been sold and people are already moving into it.

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