CBDCs: From Blockchains to Tyrant’s Chains

James Wesley Rawles October 24, 2022

Today, in place of my regular Economics & Investing column, I’m posting my predictions for the nascent sovereign cryptocurrencies — now commonly called Central Bank Digital Currencies (CBDCs.)  The CBDCs will use a variant of the blockchain technology that was first created for Bitcoin. But unlike private cryptos that use a fully distributed semi-anonymous network, control of the CBDC will be centralized and monitored.

My predictions reflect my views on history, trends in governance, recognition of mankind’s sinful nature, certain chaotic variables, and some historical parallels. I may fall short in predicting some of the particulars, but I feel quite confident in predicting general trends.

Instead of attempting to predict dates and specific milestones, I’m going to describe these changes in phases. Each of these phases might take a year or more. But in the event of a world war or a global monetary crisis, the transition between phases might take just a few weeks!

Their Plans Are Progressing

As I’ve mentioned before in SurvivalBlog, the Atlantic Council publishes a frequently-updated map showing the CBDC progress of 112 countries. As you can see from the map, there are now CBDC pilot programs in place in 15 countries.

Presently, most western nations are in the early stages of CBDC adoption.

The U.S. Federal Reserve — a private banking cartel that acts as our central bank — is thankfully “lagging behind” on its planned CBDC Digital Dollar, and is still in the “study” stage.

Some nations such as Norway and Sweden have already largely done away with cash, and are using digital Euros. This, however, is an interim step, and not an actual blockchain cryptocurrency implementation. Rather, it is an extension of existing electronic cash card systems.

For a true blockchain-based CBDC, Sweden’s Riksbank has initiated a pilot project for a currency that they call an e-krona. According to the Riksbank web site, the e-krona  “can work as a complement to cash. The aim of the pilot project is to show, in a text environment, how an e-krona could look, work and be used by the general public.”

Similarly, in Germany and in the rest of the Euro Zone, CBDCs are “in development” but meanwhile the Electronic Cash (EC) Card (aka Girorcard) system is quite popular. So for now, just “studies” and “pilot programs” are at the fore. This illustrates the eagerness that some nations have to get their CBDCs launched.

The first true CBDC is the Digital Bahamian Dollar, also known as the Sand Dollar, first released in late 2020. From their web page:

“Sand Dollar is the digital version of the Bahamian dollar (B$). Like cash, Sand Dollar is issued by the Central Bank of The Bahamas through authorised financial institutions (AFIs). Sand Dollar allows greater flexibility and accessibility for residents that want to participate in financial services via either a mobile phone application (iOS and Android) or using a physical payment card to access a digital wallet. It also provides an excellent record of income and spending, which can be used as supporting data for micro-loan applications.”

Presently, Sand Dollars are restricted to use only by residents of the Bahamas, and inside their territory.

Getting back to my predictions…

Phase One: Write The Code

Most western nations are already in the early part of what I term Phase One of floating CBDCs. The vaguely publicized CBDC “plans”, “studies”, and “pilot programs” are actually periods for drafting computer code, coordinating banking agreements, and creating the infrastructures that will be needed to release CBDCs. Many agencies and departments like the SEC, IRS, SSA, and CFTC need to draft policies for handling CBDCs.

Once the code has been written for one successful CBDC launch by a major country, then it can be cloned by other countries.

Phase Two: Kill Off Private Competition

In anticipation of the rollout of CBDCs, national governments and supranational organizations (such as the UN, FinCEN, and Interpol) will enact a myriad of new regulations and taxes on private cryptocurrency holders and exchanges. They will not want private cryptos to share a slice of the pie. As I’ve written before, governments are like the Mafia. They want it all to themselves. Part of the crackdown on private cryptos will be UN sanctions on any national governments that have encouraged the use of non-government cryptocurrencies, such as El Salvador’s embrace of Bitcoin.

The crackdown on private cryptocurrencies will not eliminate them, but it will likely spell the doom of the crypto exchanges in most countries. The dearth of available exchanges and the threatened taxes will then cause a collapse in the value of private cryptos. Plan accordingly.  This is one of the reasons why I’ve never recommended holding more than 5% of your liquid wealth in crypto coins or tokens.

Phase Two will continue and possibly intensify, as CBDCs go into circulation.

Phase Three: Cascade of Adoption

In Phase Three, the rollout of CBDCs will begin, in a rapid cascade. The mass media  will be the cheering section, claiming that CBDCs will eliminate muggings and other street crimes. Their mantra will probably be something like: “All crime is retail”. Banks will work their way into the equation, offering to pay interest on CBDC deposits and offering loans. The tech giants like Amazon.com and eBay will benefit, as transactions become more streamlined. Retailers will recognize that customers will spend more with CBDCs, given the extra layer of abstraction. (Even today, buyers spend more when paying via credit card, versus handing over printed cash.)

Once a couple of major financial powers are issuing CBDCs, other nations will feel the urge and not want to miss out on the advantages of these new currencies. And they certainly won’t want to see the value of their currencies slip on the Forex.  And once CBDCs become an option, the only sure way for a country to retain an advantage on the Forex and legitimacy in the eyes of the International Monetary Fund (IMF) and the  Bank for International Settlements (BIS) is to have a CBDC of its own.

I anticipate the rollout of sovereign cryptos will outwardly appear to be sporadic, but they will actually proceed in roughly the following sequence:

First World Countries in northern Europe, except for the UK and Switzerland.

then,

Tourism-dependent nations in Oceania and offshore banking havens such as Panama.

then,

Russia and other Second World countries with strong oil, mineral, and crop  exports,

then,

The remainder of the BRICS nations.

then,

The United States and most other First World Countries — with them possibly skipping directly to a regional/multinational crypto.

then,

The UK, and Switzerland.

then,

Third World countries, led by those with any substantial oil or mineral exports,

and finally,

Countries with Islamic governments.

The unpredictable wildcards will be so-called “rogue”, disfavored, or unrecognized nations like Somalia, Argentina, Taiwan, Belarus, Syria, Myanmar, North Korea, Lebanon, Zimbabwe, and Sudan. They could chime in with new CBDCs at any stage of the game, given access to the technology and the resolve that they see it in their best interest.

Phase Four: Phasing Out Cash

Phase Four will be a period in each nation where traditional paper and coinage currencies circulate side-by-side with national CBDCs. But I predict that this phase will be short-lived in many countries, because paper currency transactions and private crypto transactions are essentially opaque to governments, whereas CBDC transactions will be 100% transparent. Governments will want both a monopoly on currency issuance and transparency for the sake of their taxing authorities. And those cannot happen unless they eliminate paper money.

I surmise that one excuse that could be cited is that contact with paper currency was spreading a pandemic.  The lessons of the past three years have taught us that all the media and government need to do is create another pandemic scare, and people will agree to almost anything. By pointing to paper currency as the vector, they will gain more rapid public acceptance of a CBDC.  Most people are sheeple, and they fall victim to propaganda with alarming regularity.

What They Will Gain

The advent of CBDCs will provide governments several advantages that would make any would-be tyrant giggle with delight:

A.) The power to inflate and/or remonetize the value of their currencies, at will.
B.) The power to track all non-cash transactions.
C.) The power to tax all non-cash transactions,  and
D.) The ability to exert coercive control over their citizenries, via selective freezing or seizing of CBDC assets, at will, at any time, for any reason. They can also limit how much an individual can spend on categories like food or fuel in any given time period. Or they can even limit the purchase of particular food items that are deemed “unhealthy”.

The latter penalties will be much akin to the People’s Republic of China’s notorious Social Credit Score system. This capricious “on/off/deduct/delete/penalize” capability to control anyone’s CBDC holdings or purchases is the ultimate tool of tyranny. Compare that to the present-day cash in your pocket, that is only subject to inflation or confiscation at border crossings.

Sadly, I can foresee that the allure of having these powers will be irresistible to the leaders of most governments.

Phase Five: Deadlines

In Phase Five, the CBDCs will begin to fully supplant paper currencies. Each nation will inevitably schedule several key dates:

  • First, the date that all government contracts, payrolls, and benefits must be negotiated in the form of CBDC — no more checks or electronic Dollar deposits.
  • Next, a date that all bank deposits must be converted to CBDC.
  • Next, a date when carrying a specified treshold of US FRN cash, foreign currency, precious metals, or gemstones out of the country becomes illegal. If you want to travel, then you will only be allowed to use a CBDC.
  • Lastly, and most crucially, a date for the repudiation of the old paper currency and coinage. Any paper currency that is not converted to sovereign crypto will thenceforth be considered null and void.

For those who engage in gray markets or black markets and are unwilling to declare their paper currency holdings, this CBDC conversion deadline will in effect be an enormous confiscatory tax on any remaining cash on The Day. Thus, the pre-announcement of the paper currency repudiation date will have a profound effect on markets, worldwide. Suddenly, everyone will realize that “the clock is ticking”, and they will rush to spend their paper currency holdings on tangibles with genuine value. These include precious metals, land, vehicles, jewelry, gemstones, firearms, and wristwatches. The price inflation rate will surely go ballistic.

Phase Six: Going Global

The grand endgame for the financial elites will come in Phase Six: replacing individual national CBDCs with a universal digital currency. For lack of a better term, this “GloboCrypto” will consolidate power not with individual nation-states, but rather supranationally, benefiting long-established banking houses and cartels. This will be the fulfillment of centuries of their scheming.

The last nations to sign up — the Islamic states — will also probably be the first to clamor to leave an international cryptocurrency agreement.

Failure to join or breaking away from a global cryptocurrency union will mirror the difficulty and legal complexity that the UK faced, with Brexit. Any nation that maintains or reintroduces a national currency will probably do so at the risk of severe trade sanctions and exclusion from credit clearing circles.

Beastly?

For those with a Christian worldview, I don’t need to remind you that a GloboCrypto would be a key enabler for a Beast System. I’m not saying that the GloboCrypto would in and of itself constitute the Mark Of The Beast, but it would most assuredly be a key enabling piece of technology to make “The Mark” practicable.

Consider these verses, from Revelation Chapter 13 (KJV):

16 And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:

17 And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.

18 Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.”

A Golden Reset: Global Currency Chaos and Reversion

The unlimited greed and quest for power by globalists will surely be checked at some point. This is because inflation of CBDCs is inevitable. With a GloboCrypto, inflation  will occur even more swiftly. The historical parallel to this can be seen in the 2008 European Sovereign Debt Crisis. This triggered the near collapse of the EU, when Iceland and the southern tier nations — most notably Spain, Italy, and Greece — all ran into trouble with their national debts. Consequently, there were rapidly rising bond yield spreads in government securities. A collapse of the EU — and of the Euro currency unit — was avoided only by the painful implementation of austerity measures, dictated by Germany and France.

In essence, a chain is only as strong as its weakest link. It is not realistic to expect that all nations in a GloboCrypto scheme will practice fiscal austerity. If anything, it will give many nations the green light to grossly overspend.  So it is very likely that the GloboCrypto will inflate and then hyperinflate, to the point of collapse.

What monetary system will rise from the ashes?  I’m hopeful that it will be one that is properly backed by and redeemable on demand in gold. That would be our only sure protection from greedy tyrants.- JWR

Note: Permission to re-post this article is granted, as long as it is re-posted in full, with all links intact, and credit given to the author (James Wesley, Rawles) and to SurvivalBlog.com.

Leave a Reply

Your email address will not be published.