NY Federal Reserve begins digital currency simulations after crypto collapse
The Federal Reserve Bank of New York Tuesday launched a 12-week program simulating the use of central bank digital currency (CBDC) alongside major banks.
A Central Bank Digital Currency (CBDC) is a digital currency issued and governed by a central bank. In the case of the United States, a CBDC would be a digital currency issued and controlled directly by a Federal Reserve bank.
CBDC is like cash, which is backed by the Fed and whose value is manipulated by the Fed’s monetary policies.
However, whereas cash transactions are anonymous, CBDC transactions are not, confirmed Federal Reserve Chairman Jerome Powell.
The Biden administration has been aggressively pursuing the creation of a CBDC. In March, Joe Biden signed an Executive Order which tasked his cabinet and various federal agencies with developing a framework for a CBDC and submitting related proposals.
The Biden regime also went after cryptocurrencies, which are not under government control, saying in September that they “pose real risks”. The government, however, will step in to “protect consumers, investors, businesses, financial stability, national security and the environment” by regulating digital assets and introducing a CBDC.
The purpose of Tuesday’s CBDC simulation project, according to the New York Federal Reserve, is “to explore the feasibility of an interoperable network of digital central bank liabilities and commercial bank digital money using distributed ledger technology.” The project will use simulated data.
Participating banks include BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank and Wells Fargo.
The project comes just days after FTX, the world’s third-largest cryptocurrency exchange worth over $30 billion, suffered a sudden collapse and was forced to declare bankruptcy. FTX’s 30-year-old founder Sam Bankman-Fried, formerly a Democrat megadonor second only to George Soros, lost his entire $15 billion fortune in two days.
The Biden administration even plans to launch a propaganda campaign against digital assets such as cryptocurrency.
“The Financial Literacy Education Commission (FLEC) will lead public-awareness efforts to help consumers understand the risks involved with digital assets, identify common fraudulent practices, and learn how to report misconduct,” read a fact sheet published by the White House.
The White House also tasked the Department of Commerce with “establishing a standing forum to convene federal agencies, industry, academics, and civil society” to regulate digital assets.
“Together, these recommendations comprise the first, ‘whole-of-government approach’ to regulating the industry,” crowed CNBC excitedly.
The White House made a point of listing the benefits of a CBDC, which include the government’s ability to control it.
“A potential U.S. CBDC could also help preserve U.S. global financial leadership, and support the effectiveness of sanctions. But a CBDC could also have unintended consequences, including runs to CBDC in times of stress.”
What CBDC research and experimentation appear to show is that it will be nigh on impossible to issue such currencies outside of a comprehensive national digital ID management system. CBDCs will therefore likely be tied to personal accounts that include personal data, credit history and other forms of relevant information.
