The Federal Reserves Digital Currency Plans is NOT Crypto
Back in a “San Francisco’s Innovation Office Hours” webcast in August of this year, Federal Reserve Board Governor Lael Brainard stated that the Fed has been working with researchers at the Massachusetts Institute of Technology (MIT) towards creating a CBDC codebase.
CBDC stands for “central bank digital currency”, and it’s important to note that digital currency is not the same as a cryptocurrency. Digital currencies are centralized, meaning that the currency is regulated in a centralized location.
In this case, the central bank would be the centralized location for the digital currency and therefore, they would have central authority over the currency.
This gives them the ability to stop you from sending money to specific wallets, freeze transactions on the request of the participant or the authorities, and to keep transaction information confidential.
This is very different from cryptocurrencies as the main appeal of cryptocurrencies is the fact that they are decentralized.
This means that as opposed to being controlled by the government, they are governed by the majority of the community and they are completely transparent. Everyone and anyone can see all the transactions that are made as all the information stays in the blockchain. They are regulated by their respected communities.
So, to clarify, digital currencies are almost quite literally the opposite of cryptocurrencies, and although they are portrayed as a new advanced system, they are just digital versions of physical fiat money. So, if digital currencies don’t offer much-added benefit, then why do banks want to create them? Mike Maloney believes that it really has to do with the U.S not wanting to lose control.
Mike Maloney is an investor and shares his thoughts on investments on his YouTube channel “GoldSilver (w/ Mike Maloney).” When it comes to digital currencies, he believes that their main purpose is to maintain control and his reasoning for his theory has to do with 2 acts that have been presented to the senate.
The Federal Reserves Digital Currency Plans is NOT Crypto
The first one is S.2563, the Illicit Cash Act which will compel foreign banks to comply with subpoenas for records and allowing fines for foreign banks that fail to comply. In addition, it will allow them to expand the regulation of digital currencies.
So, in other words, they want to change the regulation of digital currencies and force other countries to either comply with their rules or pay a fine. And if they refuse to pay the fine, then they can be frozen out of the monetary system. Mike Maloney describes this as America bullying other countries.
The second one is S.3571, the Banking for All Act which would require that the Federal Reserve provide digital wallets to residents, citizens, and to businesses domiciled in the U.S.
These digital wallets must provide specified banking services to “eligible persons who elect to deposit funds into these accounts, including access to COVID-19 (i.e., coronavirus disease 2019) aid payments.” The way it’s worded makes it sound like it’s something that you have the option to opt into but they might find ways to push people towards using them.
For instance, if the only way to receive benefits for COVID-19 are through the digital wallets, then you don’t really have a choice; it’s either use the wallet to access your aid or you can’t access your aid. The danger Mike Maloney sees with those two acts is that the wording of the acts leaves much to interpretation and that the timing of them are no coincidence.
For example, the Banking for All Act was presented to the senate on March 23rd, 2020. March 23rd was also the day the S&P 500 reached its lowest point and a time where there was mass panic because of the coronavirus.
Afterwards, when the Banking for All Act and the Illicit Cash Act were presented to the Committee on Banking, Housing, and Urban Affairs, they were actually both presented together on the same date, June 30th, 2020. So, on one hand, you have an act that gives the U.S the ability to change the regulations on digital currency and to force other countries to conform.
And on the other, you have an act that will allow the federal reserve provide digital wallets to everyone. The danger Mike Maloney sees in the future is that the government will try their best to nudge people to use their digital wallets and then program the wallets to control what you can and can’t buy with the money in them.
Link for the Illicit Cash Act
https://www.congress.gov/bill/116th-congress/senate-bill/2563/all-actions
Link for the Banking for All Act
https://www.congress.gov/bill/116th-congress/senate-bill/3571/all-actions
