[Yesterday, your regular editor Nickolai Hubble reported on China’s CBDC launch and the terrifying implications. The thing is, our cryptocurrency and tech expert Sam Volkering was one step ahead. Only a few weeks ago, he published a briefing on what was coming and what to do about it. He’s given permission to republish part of that message here. I think you’ll enjoy be fascinated by it.]

I foresee a once-in-a-lifetime monetary shift on the horizon.

One that will allow governments to enforce a new level of surveillance and control on your wealth.

The Mises Institute says this shift will give “central banks more control than they had before with all the disastrous consequences such control brings…”

One think tank advised US congress it would be “one of the worst financial ideas of recent times”…

And Bill Campbell, portfolio manager at the $141 billion fund DoubleLine, calls it a “monetary Pandora’s [Box]”.

So what is this shift?

My research suggests some governments are on the cusp of a rollout of central bank digital currencies (or CBDCs, as they are known).

Now, let me be clear: CBDCs are completely different from the “digital cash” that’s on your Visa or Mastercard.

And they have nothing to do with cryptocurrencies, either.

With central bank digital currencies, the clue is in the name.

They will be a mass centralisation of power into the hands of central bankers and governments.

Giving control of your money… directly to the government and the Bank of England.

Under a CBDC-dominated regime, instead of having a bank account with your private bank, you will have an account with the central bank. And you’ll use a digital currency issued directly into your bank account, by the central bank.

This has huge implications.

See, whilst I’m no lover of the traditional banking system, they do perform one crucial function for the man on the street.

They’re a sort of “shield” between us and the central bank. First, they protect us from the government manipulating any of the money in your bank account. Second, they protect us from the government seeing what you do with your money.

But in a world where everyone has a bank account with a central bank, that shield is removed completely.

It puts the central bank in control of your wealth…

Allows it to see exactly what you’re doing with your wealth…

And paves the way for a whole new level of surveillance and overreach…

Limitless control over your money

The first thought that comes to mind is the potential end of the cash economy.

Under a CBDC monetary order this money would have nowhere to escape…
The “Shadow Economy” would cease to exist.

But that is just the tip of the iceberg.

CBDCs would usher in the beginning of something I call “designer money”.

A tool they could use to stimulate – and manipulate – the economy as they see fit.

If they wanted to give the economy a boost, they could simply place a “timer” on your savings. Forcing you to spend 20%, 30% or more of your money, before it disappears.

Or they could implement different interest rates for different groups of people. Generous rates for those they want to please. And negative rates for those whose votes don’t matter.

But it gets worse…

Limitless control over your behaviour

CBDCs could also give way to the impending spectre of social credit scores.

Picture this…

A world where your bank account is interlinked with your legal, employment and medical history… your marital status… your web history… and any other data they can get their hands on.

A world where the government uses a financial stick and carrot to incentivise you to behave how they want you to…

Think this sounds too farfetched? Too dystopian?

It’s already in use today, in China.

China has already excluded 100 million people from using public transport to fly across the country using social credit. And it’s already launched trials of its CBDC in four of its cities.

Now, you may think all the controls I have mentioned are too extreme – too fringe – to ever be enforced in free society.

But, the truth is, bad financial ideas have a funny way of catching on.

We saw that with negative rates… quantitative easing (QE)… cash controls… helicopter money… Modern Monetary Theory (MMT)… the list goes on.

All ideas that were once considered radical.

But once they are piloted in one country, they have a nasty habit of being unilaterally adopted.

And the fact is…

This is not limited to communist China.

Governments around the world are already in the midst of making the shift to CBDCs.

  • The Bank of England is designing its payment settlement service to be able to support CBDCs. In fact, it recently published a 56-page discussion paper on its website evaluating the benefits and risks of CBDCs.
  • The chairman of the US Federal Reserve admitted it has teamed with MIT to “[develop] a hypothetical central bank digital currency.”
  • And German state-owned broadcaster Deutsche Welle recently reported “The [European Central Bank] has announced plans to develop a form of [the euro].”
  • Sweden, Japan, Switzerland, The Bahamas, The Philippines, Turkey, Hong Kong, Thailand, South Africa, Australia and Singapore are all piloting or working on CBDCs.

What’s more, according to the Bank for International Settlements, 80% of the world’s central banks are investigating CBDC’s potential.

We find ourselves at a crossroads…

Where we may have to choose between participating in a system that could enforce restraints on our privacy and liberty.

Or to take at least some of your capital and participate in a different kind of system.

One that values those virtues.

As Newton once said: “for every action there is an equal and opposite reaction.”

And whilst governments and central banks around the world may think they are about to initiate their own monetary reset…

I believe the reaction to that will be a different kind of reset…

In fact, the market… and the people… are already reacting.

A revolution is already underway.

And I recommend you become part of it. 

Sam Volkering
Editor, Southbank Investment Research