Hello all. Scholar here again for another important CBDC update. Before we start I wanted to share a recent WIN for CBDC Watch.
It seems we have rattled some very large and powerful cages…
This week’s post will provide clarification on the current CBDC playbook and the games the central banks and governments are playing to “lighten” the introduction of CBDCs, with some updates on the Digital Pound (Britcoin) and Digital Euro coverage.
The term “CBDC” has become a matter of focus and disgust with private citizens who have become familiar with the matter. We are now officially at the point where CBDC has become a bi-partisan issue becoming increasingly politicized. In the US you can see this with Sen Cruz, DeSantis, Emmer, and Noem. As well as presidential candidates Robert F Kennedy Jr (D) and Vivek Ramaswamy (R) who both plan to run in 2024.
Sen Elizabeth Warren recently launched an Anti-Crypto campaign and has spoken in favor of CBDCs. Although, a small minority lead the opposition, they have given central banks enough reason to adjust course and to diminish any negative perception of drawbacks to a CBDC.
In general you can find conservatives and libertarians will likely stand against CBDC, and liberals likely to be favorable toward a CBDC. Although there a plenty of arguments for any political ideology to stand against a CBDC.
Remember, in the end it will ultimately be CBDC vs Crypto. While everyone is distracted by the "current thing" the central banks and your government are hard at work developing a CBDC for you.
Digital Pound “Britcoin”
Rishi Sunak, Prime Minister of the UK, has lead the UK on a straight path toward enhanced CBDC development. The development for the Digital Pound started initially in 2021 when a CBDC Taskforce was established in April 2021, just 2 months before the below article was published.
Back in 2022 they began their work with MIT, who also aids the development of the Digital Dollar and Digital Euro. 2 months ago in February the Bank of England released the Digital Pound consultation paper.
The motive now is to establish trust in a Digital Pound and walk back any of the “enforcement” language that has been (rightfully) associated with the CBDC project(s).
The BoE has put together a 30 person team for the project, BoE head Andrew Bailey has walked back the previous statements from 2021 and just last month he said “Britcoin” would coexist with cash, not replace it. Bailey simply reverted back to older talking points and narratives in an effort to calm the distrust. Last year they ran a similar play with trying to create buzz around terms like “optional data sharing elements” in “privacy centric” CBDCs.
Make no mistake though, 100 countries (95% of global economy) actively working on CBDC developments involving 90% of all central banks, the BIS, IMF, and World Bank developing CBDCs. All G7 nations, and 18 of the G20 are developing CBDCs.
The coordinated effort is clear. Development of CBDC is a global effort, just because there won’t be a one-size fits all CBDC doesn’t mean one CBDC will be better than any others.
By the end 2023 another 15 - 20 CBDCs are expected to move toward a pilot. Big projects like the Euro, Pound, and Dollar are moving along faster now as a result. However, since the USD is involved in ~80% of international trade, they stand to benefit from moving slowly as well.
Digital Euro
As mentioned on here, the recent updates from the European Central Bank (ecb) show the Digital Euro pilot could be released by Q4 2023. The projects motions forward were established in May 2022 when Christine Lagarde publicly announced her “full backing of the Digital Euro”.
Last Sept the ECB announced a partnership with Amazon to help develop the infrastructure & design of the Digital Euro. The timeline for the Digital Euro shared below.
As part of the resistance and opposition to CBDC, the citizens of the Netherlands have held protests against the Digital Euro ending 2022. Some holding signs and shouting “Defund the State, Buy BTC” and “CBDC is Digital Jail” as part of their efforts.
The head of the ECB, Christine Lagarde recently announced in Oct the path forward with the Digital Euro will be:
CBDC is a necessary defense mechanism for EU global positioning and security for the $EURO
CBDC can be used to prevent/enforce an agenda with monetary policy, security, and various policy objectives… aka Digital enforcement.
Back in November of 2022 Christine Lagarde announced that legislation detailing privacy features and the legal status of the digital euro will be released soon. Again, it is likely their big announcement in October will include setting a date for the launch of a Digital Euro pilot.
Causes for Concern + Importance of Self-Sovereignty
Every day crypto continues to grow larger and larger, self-custody become much more important. A CBDC will not be seen as a “foreign object” for most people. After conducting my CBDC interviews with Nigerian citizens and speaking with Chinese, Canadian, and American citizens, they all say 9/10 people will not outwardly oppose a CBDC. Nobody wants to “worry about money”.
The only thing is see potentially changing this is the politicization of CBDCs via elected leaders/politicians. However, that still doesn’t justify believing “politicization” will change anything. Not even using it will make anyone feel any different about “money”. Not even the current biometric payment authentications on payment apps with Facial and Finger scanning scares anyone off.
Using it it will be no different than using currently available financial applications like ApplePay, or WeChat. For example, the eCNY in China is integrated in with their current financial applications. Users pay in eCNY with AliPay and WeChat Pay.
The path forward from here looks very obvious. In 2023 like stated earlier in this that 15-20 countries will be moving in significant fashion toward their CBDC ambitions. Russia just launched their pilot last week, and were “far behind” in 2020.
Moving toward the cashless society shows how critical and crucial that self-custody and ownership is going to be in a world where your freedom to transact is gone.
Practicing self-custody has immense benefits, but it comes with serious responsibility. Anyone looking to acquire crypto assets should have a hardware wallet.
Wrapping Up
FEDNOW, CBDC, whatever it is..Hopefully people don’t believe a central bank is going to allow a token based system where users can find ways to remain anonymous. Surveillance, “security” is the focus. Anonymity is antithetical to the entire point of a CBDC. CBDCs will be more of an account based system where Digital ID integrations will be the fundamental layer.
Moving forward, I will be launching another paid post involving research and coverage on how deep any Ethereum involvement goes on CBDC.
Jan 13, 2022: Payments giant Visa teamed up with Ethereum scaling firm ConsenSys to help central bank digital currency (CBDC) networks bridge the gap with traditional financial institutions.
Customers will eventually be able to use their CBDC-linked Visa card or digital wallet anywhere that Visa is accepted globally
Catherine Gu, Visa’s head of CBDC