News/Commentary

Digital currency is already here. You were warned.

November 17, 2022 | | Print Article

Just as conservatives have long predicted would eventually happen, the United States government has begun taking the first steps necessary to establish a digital currency.

Specifically, a number of banking giants — including Citigroup, Mastercard, and Wells Fargo — are teaming up with the Federal Reserve to run a 12-week “proof of concept” (PoC) program to test an “interoperable digital money platform” known as the Regulated Liability Network.

“The 12-week PoC will test a version of the RLN design that operates exclusively in U.S. dollars where commercial banks issue simulated digital money or ‘tokens’ – representing the deposits of their own customers – and settle through simulated central bank reserves on a shared multi-entity distributed ledger,” according to a press release.

“The PoC will also test the feasibility of a programmable digital money design that is potentially extensible to other digital assets, as well as the viability of the proposed system within existing laws and regulations,” the press release notes.

The announcement has provoked fire and fury because critics are certain this RLN is just short for central bank digital currency (CBDC), i.e., a digital dollar.

Speaking on his radio show this Wednesday, conservative commentator Glenn Beck noted that he’s been warning about the rise of a CBDC for ages.

“We told you this was coming how many years ago. Everyone denied it. Every single member of the press has been denying this. They’ve been saying it’s a conspiracy theory. All of this. We told you years ago that this was coming. Now they started, as of yesterday, their 12 week digital dollar pilot. What does that mean? Don’t go to MSNBC, because they’re not going to tell you,” he said.

Listen:

So what does this mean?

While it depends on who you ask, there is a growing concern that it could mean the government being able to more easily silence and punish dissidents, which incidentally is exactly what Chinese President Xi Jinping is reportedly planning.

“The most notable and troubling CBDC in development is the Chinese digital yuan. The pinnacle of digital authoritarianism, this digital currency would be linked to a social credit score that gives the Chinese government instant knowledge and control over its citizens’ finances. The digital yuan will increase the ability of the Chinese government to silence dissidents and control speech,” according to The Hill.

Pretend that all your “money” is being stored as a digital currency. Now imagine that the government institutes a vaccine mandate but you refuse to abide by it. In a CBDC-centered society,  the government could simply disable your digital “money” until you comply. Something similar happened in Canada last year, albeit with just regular bank accounts for the time being.

“In an attempt to squash the voices of those who disagree with his preferred policies, Canadian Prime Minister Justin Trudeau froze the bank accounts of protesters. The widespread use of a CBDC would increase the ability of petty tyrants to control the finances of their citizens and silence voices of dissent,” The Hill notes.

And so, just to be clear, the government can already silence dissidents by disabling bank accounts. A CBDC would only further simplify the process.

So if not a CBDC, then what? Cash perhaps.

“Traditional cash payments provide consumers with a wide range of benefits from privacy to personal autonomy. Physical cash is the only form of payment that does not require a third party such as electricity or an internet provider,” FreedomWorks a conservative and libertarian advocacy group, notes.

In the meantime, congressional Republicans have been doing their part to prevent a CBDC from posing a threat to their constituents.

“U.S. senators Chuck Grassley (R-Iowa), Ted Cruz (R-Texas) and Mike Braun (R-Ind.) have introduced a bill to ‘prohibit the Federal Reserve’ from issuing a digital dollar that could be sent straight to users,” CoinDesk reported in April.

“The untitled bill, introduced by Cruz last Wednesday, would block the Federal Reserve from offering ‘products or services directly to an individual,’ maintaining accounts for individuals or issuing CBDCs to people,” according to CoinDesk.

With this bill, a CBDC could still be created, BUT the Federal Reserve would not be directly involved in it, meaning a little bit more safety and privacy for consumers.

Vivek Saxena
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