Bank of international settlements chief talks “absolute control”
|The General Manager for the Bank of International Settlements – the central bank of central bankers – is planning for “absolute control” of the money we all spend.
Augustin Carstens recently gave a talk entitled “Cross Border Payment: A Vision for the Future” in which he outlined the problem as central planners see it, as well as their solution.
“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.”
Carstens views CBDC, Central Bank Digital Currency, as a tool for eliminating privacy and for central bankers to force citizens to use currency exactly when, where, and how they are told.
Dozens of central banks around the world are working on CBDCs, including the Federal Reserve. The effort represents a major escalation in the War on Cash.
It is one thing to discourage people from using cash.
It is something else entirely to introduce digital money which gives bureaucrats the power to monitor and control the spending of everyone who adopts it.
Novel ideas are already being floated. For example, the Federal Reserve could issue stimulus funds with an expiration date, forcing people to spend rather than save.
Officials could limit spending to certain geographic boundaries, and thereby impose a restriction on travel. They could pick winners and losers, favoring some merchants or industries or crushing others.
The only fly in the ointment is that mistrust in government is rising quickly in the US. Getting people who fear giving officials that much control and who care about privacy to adopt the new digital money could be a challenge. Many will actively seek alternatives, such as Bitcoin or gold.
Central banks and governments do have some powerful levers to pull.
It is easy to imagine government transfer payments being converted to digital currency. Social Security, Medicare, welfare, food stamps, and other benefits could be paid using the new CBDC.
Government could also insist vendors and contractors take payment exclusively in the new token.
We can also expect plenty of assurances from people like Carstens. They will promise to be fair and protect people’s liberty. They will say the goal is to make central bank policy work better for everyone. They will also insist they are trying to protect society from criminals, tax cheats, money launderers, and terrorists.
The only question is whether the public will buy what central bankers are selling.
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