June 28, 2021
We talked last week about the building chatter about central bank backed digital currency (CBDC).
The Fed told us last month that they would be publishing a report this summer on the prospects of a digital dollar. Earlier this month, the topic of CBDCs was addressed at the G7 meetings. Two weeks ago the Senate Banking committee held a hearing, with expert witnesses arguing the benefits of CBDCs.
And over the weekend, the head of the Bank for International Settlements (the BIS, a consortium of the world’s top central banks) presented the case to American economists. In fact, the BIS has become the promoter of CBDCs as “the future of the monetary system.”
So, what would it mean to you and me?
It would mean a cashless society.
As the BIS report acknowledges, at the wholesale (or institutional) level, digital currency already exists. So the disrupted parties in this new digital monetary system would be small business and “retail” (i.e. the people).
Perhaps the biggest negative is that every transaction in your daily life would be recorded and traceable. I suspect most would not find this so appealing — but it looks like it’s coming.
Keep in mind, the BIS consists of 63 central banks around the world (including every major central bank). And they say that almost 90% of them are having discussions on a digital currency regime.