Banks Starting To Realize CBDCs Are Not To Their Benefit

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Central Bank Digital Currencies are coming. This is something that is not likely to reverse course. All countries of any size are looking into the feasibility of bringing them out. This is headlined by China which already ran a number of trials with the new currency.

CBDCs are the establishment's response to cryptocurrency. This is a digital currency but in no way reflects what cryptocurrency is trying to accomplish. It is another attempt to give more power to a historically corrupt group of individuals.

These currencies, although they have the words "central bank" in them, are not really favoring that group. Instead, this is a move that enhances government personnel, i.e. politicians and bureaucrats. It is a dangerous road to head down since that just hands more power to people who have shown themselves to be apt to abuse said power.

Instead of creating a more decentralized system like cryptocurrency initiates, CBDCs will simply consolidate power into fewer hands.

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Presently, developed countries have monetary and fiscal policy separated. While the line is blurring, it is still there. Plus, there is a commercial banking system that is completely separate from the government. They handle most of the financial policy that is implemented, as spelled out by market forces, regulations, and laws enacted.

Giving the government CBDCs is like making Dr. Mengele the head of healthcare. More power in the hands of psychopaths is never a good thing.

This is something that the banking industry is just starting to realize. Analysts at Morgan Stanley concluded that banks would see an 8% reduction in deposits if the ECB adopted a digital Euro. This is because a portion of deposits would be held in digital wallets, controlled by the ECB.

Essentially, this is the beginning of the end for the banking system as we know it. While many might feel that is a good thing, be careful what you wish for. As bad as the banks are, the alternative in this instance is much worse.

Most banks make their money from deposits. That is the core of their business. People put their money in the bank while receiving some form of interest. This is then either lent out or invested in interest paying assets that provide a return greater than what the depositor receives. The difference, of course, is the banks profit.

The 8% figure is just a start to what the banks would see. Over time, it is easy to envision a greater amount of the money supply being in the digital form. This would remove deposits from the banking system and place them in the digital wallets.

Here is the dilemma: as bad as the bankers are, politicians and bureaucrats are much worse. The former operates in a manner to make money. Their corruption is fairly straight forward and does not change. Plus, they will defend their interest against government intrusion. Ironically, often, these interests coincide with the general public.

Governments tend not to operate that way. Handing them programmable money is very dangerous.

Here is an example. The bold is my emphasis.

The analysts’ estimates were based on a “bear case” scenario where all euro area citizens above the age of 15 sent 3,000 euros ($3,637) into a digital euro wallet controlled by the European Central Bank. As previously reported, this amount could be a theoretical limit of total CBDC holdings by residents, according to ECB executive board member Fabio Panetta.

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While the highlighted statement is in reference to the amount that is held as compared to the regular EURO, it does emphasize the power that is being erected. What if this meant that each person could only hold 3,000 EURO? In other words, if one did not spend the money, it would be lost.

Here is where we see the power shift. Monetary policy is handled by central banks who, as part of their approach, set the base interest rate. This is done in an effort to stimulate or cool down economic activity.

CBDCs simply move that power to the political establishment. For example, if the government decided it wanted negative interest rates, it simply could instill a 2% reduction of each account yearly. Thus, instead of making $2 on $100 deposited, one would lost that same amount. Does anyone think the politicians would resist getting their hands on that money? Therefore, we could see savings go away.

Of course, it gets worse. This is programmable money so the government could decide what you spend it on. That is a feature that has not really been experimented with yet in the cryptocurrency industry but it is there. All monies can be programmed with time lapse, usage restrictions, and anything else that is coded in there.

With governments, we can easily forecast, depending upon who is in power, how this can be done. Want to get an abortion? Fine except you can't pay for it. How about buying ammunition for those guns? Nope that is gone. Prefer to donate to a religious organization? Better give them furniture because the money transfers will be denied. Do you like to give to the RNC, DNC or your favorite political candidate? That could be "censored".

Or how about anything on this list:

  • cigarettes
  • alcohol
  • fatty foods
  • natural medicine
  • environmental groups
  • certain books or music downloads
  • particular speakers or content creators

Ultimately, CBDCs will eliminate the need to outlaw much of anything. Simply program the money so they cannot receive it. Unlike today, no court order is required.

This is the power that the governments are looking at amassing.

Then we see the matter of taxes. This is something that could be instant. From the second a transaction takes place, the tax can be removed. Just consider how much money that would remove from economic activity and put in the hands of government. Sure, when one does the yearly return, the money can be refunded. However, that money is not available to the individual or entity for that time period.

Hence, the push towards CBDCs by governments is not as much about the elimination of cash as it is control and the reduction of the banking system. This move will put all monetary policy in the hands of politicians, something that is far more dangerous than in the hands of central banks. Couple that with the fact that policies are implemented by bureaucrats who are unelected and we see how bad this really is.

Of course, the banking system is just starting to wake up to the fact this is not good for them. Perhaps it is time the general population started to realize how bad it is for them also.


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44 comments
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Hopefully people will resist CBDCs and it will just push more people into cryptocurrency.

At least there is one place on earth where Bitcoin is legal tender and as a result there will never be a CBDC. Hopefully there will be more places soon.

Any nation that accepts a CBDC will destroy itself.

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At least there is one place on earth where Bitcoin is legal tender and as a result there will never be a CBDC. Hopefully there will be more places soon.

There will be.

Any nation that accepts a CBDC will destroy itself.

Or destroys its people. Of course, the psychopaths in control do not care about that.

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That's quite a sad scenario but one that's definitely possible. I really hope we will never see CBDCs as a reality.

As stated in many posts of mine, I consider cryptocurrency becoming a currency and being used as such as much more important for us than it could be as an ever expanding asset.

There's still time to create ourselves a system that would take most of that malicious power away from the governments.

If those entities will end up with that much power in their hands, life in the current society will be a living hell.

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I really hope we will never see CBDCs as a reality.

I would say that is false hope. It is going to be a reality, bet the ranch on that.

The key is for us to keep innovating and providing an alternative to what is being develop by the governments. This is how we can counterbalance what they are doing.

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Today we have tether fud, I cant wait for the new CBDC fud :D

Banks will become a thing of the past.

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It does appear to me the banks are going to be destroyed, or at least many of them, by the governments. While crypto is a threat, the governments will make them obsolete a lot quicker.

Perhaps then we can shift people from the government wallets to crypto.

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A different form of dictatorship. I heard even the Nigerian Government is now considering CBDCs. The existence of CBDCs will do a lot of harm to cryptocurrencies.

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The existence of CBDCs will do a lot of harm to cryptocurrencies.

It puts a great deal of power in the politicians and bureaucrats hands.

Far too much in my opinion. The banks are bad but this is worse.

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This could be a good thing though it might get the bank lobbies on board with establishing policy for things like BTC and other alts. They might want to fast track all of that to cut this off at the pass.

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I wouldn't count on that. That is akin to opting for death by knife as opposed to gunshot.

Do not forget, crypto is designed to replace banks. So they are not better off by being in this camp either. There are no friends for them here.

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I don't see any easy way out of this then....

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The central banking model has been tarnished forever. Many of these centralized units can be created but the mainstream market won’t use them. However, it is good to put this info out into the community. There are power hungry people in all facets of society. Most don’t have our best interest at heart.


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I agree. The problem is the CBDC is not central banking as much as government. And I have a feeling that model is going to stick around a bit longer than the central bank.

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Nice can't wait for the tether fund

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We has one way to resolve this problem: buy BTC and hold for 5 years. Invest on Hive ecosystem and make more avaliable networking on blockchain decentralized. The next 10 years are move transformation society. The money is the energy that you make with you life. Thanks for more this best post.

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I would say that you are right. Individuals getting involved in crypto is a way around all of this. The more active the crypto community and the greater the economic impact of that, the harder it is to take down.

Since crypto is tied to technology, and not financial, we are going to see a massive explosion as compared to what the centralized entities are doing.

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I think banks want to jump on the crypto hype train in their own way but I doubt they are serious about it

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They are between a rock and a hard place. No matter what they do, they are screwed. Crypto is no more a friend to them than governments.

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Is a future where one can on and off ramp cryptocurrency in decentralized way a possibility?
That is the future I long for!

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I would say to fiat, no. When you deal with the government's form of money, you have to deal with the government.

However, it all changes when crypto is accepted for goods and services on mass scale. Then, instead of changing your crypto for fiat, you simply use it for stuff you need.

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Programmable money-- which is what the CBDCs are has the features listed in the original post, and one more: expriration dates.

If it wanted, a central bank could specify that "money" issued "today" becomes worthless 90 days later. This is so that people could spend that money in an effor to stimulate "the economy". The central bank will say that is to avoid the hoarding of money as well as to avoid a bank run. What is left unsaid is that savings would take a big hit.

This odious feature, along with the others mentioned in the original post, cannot be good for people holding CBDCs. Unfortunately, that means everyone of us.

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Yep. That could be part of it. Of course, so could crypto. That is part of the innovation that hasnt been tried. How about a layer of crypto involved in projects that is temporary? Use that as a way to incentivize people to try a platform or do something in the near term.

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It is the biggest issues with CDBCs because all the power is in the government. People can just be completely cut off since things are moving digital.

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To think that I was so happy to read that some central banks were already implementing the new system and that our corrupted country is running a one year project in order to tailor the CBDC system to their liking before implementing it. I thought that this would give added legitimacy to crypto which could benefit Hive and other coins.

Now after reading this, I realize that we are in trouble, as much that you mention will most defintely take place here.

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Now after reading this, I realize that we are in trouble, as much that you mention will most defintely take place here.

I am not sure we are in trouble. The reality is that crypto is still spreading and growing. It is not going away. This is outside the reach of the governments and they know it (or maybe they are so arrogant they dont know it).

We are going to see a massive paradigm shift in the next couple years I believe. People are going to wake up one day and realize this is everywhere.

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Oh they know my friend. The taxman here has recently released new crypto laws and all crypto transactions must be included in one's tax return forms. It is regarded as income and the government wants their slice.

I just hope that they leave our charity out of their deliberations, as it is tough here.

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If what you said is correct that means it is not for the general public development or added advantage to crypto currency but rather a way to take control crypto currency monopolies it to there personal advantage.


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They are not involved in cryptocurrency since that is permissionless. It is outside of their control. Hence they create something that is within their control: CBDCs.

This gives them programmable money without the hassle of trying to deal with non-government money.

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a true nightmare... but the adoption of BTC of El Salvador as legal tender is a silver lining. It doesn't have to be this way, but we have to fight for a better future

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That is a step forward. There are others steps being taken. Each expansion of platforms and technological advancement only helps things.

This is a battle that is being fought on many fronts, most of it technological.

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Always the knew Banks/financial institutions will put up with one last fight in a bid to still retain power and control.

We can only hope this plan of there's get resisted by the masses and people embrace true decentralization.


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They are not having to take on the governments. So they have the same problem as many nations faced, fighting wars on two fronts. That usually does not end well.

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Well said. I agree on everything, but one. CBDC or Crypto, or any other means we should have that cap on individual wealth. 3000Euro is a bit low, but I see no purpose of one person having millions of dollars or euros.

As the meme said:

Once you reach 1 million net worth you get a badge or trophy "Congratulations, you won capitalism" and any additional income would go to charity.

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Disagree completely.

That point of view has been used in the deaths of hundreds of millions of people. Basically it is a cancer that should be stamped out.

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which one? not allowing people to hoard multibillions for themselves or giving the excess to charity?

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I must admit, I was initially excited by CBDCs because they would lighten the resistance of people to crypto but on close inspection, it looks like it might even be anti crypto.

Assuming your theory is correct and government take steps to program money, they will even go as far as preventing people from putting money into exchanges and will tax the hell out of you.

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Of course it is anti-crypto. Crypto means freedom, borderless and permissionless. That is not something that government wants.

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Another point to add that I didn't see mentioned: time limited money.

Ive read reports of China talking about issuing stimulus CBDC money that has a time expiration limit.

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