Central banks around the world have been discussing the possibility of digital currencies as the use of cash continues to dwindle in lieu of electronic and online payment systems, and Canada is no exception
Two years ago, the Bank of Canada joined a study group alongside the European Central Bank, the Bank of Japan, the Bank of England, the Swedish Riskbank and the Swiss National Bank to discuss digital currencies, and it appearas as though the lessons learned are beginning to manifest at home, as the Bank has released a list of several "archetypes" of CBDC systems, otherwise known as central bank digital currencies.
The Swedish Central Bank began studying the issue several years ago and has already implemented a pilot project to deal with the country’s declining use of cash however they haven’t reached a final conclusion on whether or not to keep the project. The Bank of Canada stated in a press release in 2020 they would assess the potential for digital currencies.
Under the "centralized" archetype of CBDC, users "do not hold any state, only credentials that authorize access."
It reads: "The distinguishing feature of the centralized archetype is that the total system state is within the trust zone of, and controlled by, one entity. This entity would have the power to approve and apply each update or deny it. Users connecting to the system do not hold any state, only credentials that authorize access. An operation, such as a transaction or issuance, could be fully recorded as a change to information within the zone. In practice, a CBDC system would not be deployed as a single instance. Instead, it would replicate state, possibly to different geographic sites, for backup and availability. Nevertheless, if the instances are under a single entity’s authority, the system can be considered centralized because it preserves the essential characteristic of the total state controlled by one party."
Systems such as these have been warned against by many, including Maajid Nawaz, who spoke with Joe Rogan about this potential and the real-world terms.
Nawaz detailed the new system. "So the vaccine passport infrastructure is in place. But now we know that the vaccine doesn't stop infection or transmission but the Checkpoint Charlie exists everywhere. They bring in digital banking, central banking, digital currencies. You've got a scenario now that you're checking in and out everywhere you go, using vouchers that are programmed and you can only spend where you're told you can spend them.
"There's another word for that. That's called the Chinese social credit system. That's what it's called. And anyone who watches Black Mirror will know what I'm talking about," Nawaz said.
"So what they are telling us, and when I say they, who's they, people in power, that's the head of our economy, the Chancellor of the Exchequer, the second most powerful person other than the prime minister, and maybe the foreign secretary in the UK, right?
"He's telling us I just played it there for you. He's telling us that's what he, as the UK, the head of the G7 wants to bring in for the G7. So a scenario where, like in New York at the moment, because the passport infrastructure is in place, you bring in that digital currency, and you've got this total control.
"And if I'm speaking to you the way I'm speaking now, and my employer or government... deems me as saying or doing something inappropriate, suddenly, I can't actually pay to come here and speak to you anymore. My digital currency won't even pay for the ticket. Because it will be known that I'm coming to speak to you, 'sorry, your vouchers don't allow you to purchase that ticket to go and speak to Joe,'" he continued.
"And this is where we get into the kind of censorship that we see in social media," Rogan replied. "You can't have that kind of censorship with the First Amendment in normal discourse, but you can have that kind of censorship if you've developed a digital platform that distributes information, but it's a private company.
Rogan continued: "So think about what money is, you can spend it on whatever you want, versus this digital currency, which is essentially controlled. In a sense, like, you have free speech on Twitter, but you really don't because if you go too far, or you talk about something that they don't find appropriate, they'll just ban your account. That could be what we're looking at in terms of what we think of as free speech being social media platforms, could be what we think of as your free range ability to buy whatever you want with whatever money that you've earned."
Now, in the UK, leaders are voicing their support for the idea of a centralized digital currency. Newly appointed Prime Minister Rishi Sunak wants the UK to be a global hub for cryptocurrency and wants to move toward the creation of a digital currency for the UK.
The Guardian reported last year: "Sunak said a joint Treasury-Bank of England taskforce was being set up as part of a range of measures designed to boost the City following Britain’s departure from the EU.
Then-chancellor Sunak said at a financial industry conference that a joint task force led by Bank of England deputy governor for financial stability Jon Cunliffe and Treasury’s director general of financial services Katharine Braddick would “coordinate exploratory work.'"
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