The Government Just Took this Big Step Closer to Controversial “Fedcoin”
From Birch Gold Group
We are living in strange times…
Conflict with China is by far one of the single biggest threats to the dollar. So it’s worth paying attention to, because, as the last Cold War proved, it can escalate rapidly and persist for decades.
But there is another threat to the dollar that is being developed on our own shores – and by our own central bank.
Just six months ago, the idea of a centralized digital currency in the U.S. was discussed by officials as a mere plan. Fed Governor Lael Brainard went as far as to admit that it could eventually replace the dollar.
Fast forward to today, and in a speech titled “An Update on Digital Currencies”, Brainard is now suggesting that the plan could materialize much sooner than they had ever led us to believe.
From the speech, we get an idea of how far the Fed’s plan has come, now in the experimentation phase of development:
We have been conducting in-house experiments for the last few years, through means that include the Board’s Technology Lab, which has been building and testing a range of distributed ledger platforms to understand their potential opportunity and risk. This multidisciplinary team, with application developers from the Federal Reserve Banks of Cleveland, Dallas, and New York, supports a policy team at the Board that is studying the implications of digital currencies on the payments ecosystem, monetary policy, financial stability, banking and finance, and consumer protection.
“Distributed ledger platforms” describe the foundation on which a “Fedcoin” system could be built.
In collaboration with MIT, Brainard also noted that the Fed is now “live testing” a digital currency in a simulated environment to use “as needed”:
The Federal Reserve Bank of Boston is collaborating with researchers at the Massachusetts Institute of Technology in a multiyear effort to build and test a hypothetical digital currency oriented to central bank uses.
So while we likely won’t see “Fedcoin” next year, we are very clearly much closer to implementation.
The Dollar And Your Privacy Are Both In Jeopardy
Any time the federal government creates or gets involved in a major system, the results are almost always bad or ineffective.
Now the Fed is taking on the payment system at the root of everything. Once anything like Fedcoin gets implemented, it could replace the dollar, and Americans will be a short step away from a cashless society.
Robert Wenzel offered a strong warning about the current “update” from Brainard’s speech in a recent blog post:
The update is not good news for privacy advocates who don’t want to see all their money transactions tracked by the government… There is little doubt that such a digital Fed money will have the capability to track all transactions.
Wenzel’s warning means that wherever you shop, whatever you spend your “Fedcoin” on, even if you travel and spend money – in all those situations you could be tracked. Any cash flow between services or products could also be controlled by the government.
In other words, this “update” from the Fed seems to indicate their sincere interest in changing the way money changes hands in the future.
How far in the future remains to be seen, but it sure seems like the U.S. is closer to the first major overhaul of the monetary system (and your private life) in decades.
Whoever Has the Gold and Silver Makes the Rules
Cash could be a thing of the past in the future. Who knows how something like Fedcoin could mess with your retirement?
It’s a good idea to consider other options to protect your retirement with a tangible asset that can’t be converted into digital form.
Precious metals like gold and silver continue to hold value and have for thousands of years. And because they are physical assets, you can’t be tracked as you could if Fedcoin moves even closer to becoming reality.2020, digital currency, economic policy journal, fedcoin, federal reserve, sovereign man