The Fed Just Launched the Digital Dollar
The Federal Reserve is launching a pilot program for the new central bank digital currency along with 12 currencies in which major banks such as any US bank in Mellon City Wells Fargo and a few other banks are together in a 12-week pilot program for the new digital dollar.
The innovation center here and the New York Federal Innovation Center is the center that's been looking at central bank digital currencies for a while now and they've been giving speeches periodically about what they've found and what they're looking for saying, we need Congress to do things On this, we want Congress to legislate it but it looks like they're taking a giant step forward and it's no coincidence that this is happening amid the most epic Ponzi scheme.
The most likely cryptocurrency crash in history up to this point and possibly in the future as well with the FTX crash right now. Blockchain transactions are so low, this news highlights the fact that there are still real-world use cases for this technology, no all it does is it proves it's only been waiting.
Just looking for a perfect opportunity to take advantage of the fraud they caused by printing a lot of money and then they allow it by not stopping criminal behavior that is actually already criminal you don't need extra regulation for this jump On the off chance that imposing tyranny and test pilots try it on unsuspecting citizens this doesn't mean there's a real-world use for this or should I say that doesn't mean there's a free market desire or demand for it obviously if.
They force this on a lot of people who would use it but that doesn't mean that people would choose to use it if given the choice so we see banks like City HSBC MasterCard Wells Fargo they will all be in on this experiment The project is going to be called the Organized Responsibility Network and that's a good name for it this is probably going to be a test of the greatest liability of American freedom in the history of our country.
so the question is why now؟
We obviously know the end game about central bank digital currencies but the reason they're doing this particular test is to test how banks use dollar tokens in a common database accelerating payments just last 12 weeks and at the end of 12 weeks they'll get together and talk about their findings To her when they announced this on Tuesday they said they would explore an interoperable network for wholesale digital central bank digital money operations.
On a shared multi-entity distributed Ledger banks will participate in the experiment by issuing tokens and settling transactions through simulated central bank reserves now that's a whole lot of terms so let's break it down into an interoperable network of wholesale and commercial central bank digital money for banks really what we're doing here is there are two main layers in our current financial system there are banks and banks hold people's money now banks also have their own money which is held by the central bank so the central bank0. Acts as a bank to other banks and banks obviously act as banks to everybody else so this is just saying the same thing because you know kind of a parallel test program with the new currency and that's shown here where it says run on shared.
distributed multi-entity ledger.
So we talked about the differences between cbdc and something like Bitcoin it's basically a ledger which is just a list so Bitcoin is a public list that anyone can go and look at all the transactions that have ever been Looking at all the wallets that have any amount of Bitcoin in them it's a public ledger anyone wants to go see it cbdc will be just like this private ledger is talking about so only selected entities and people in groups get access to view or use
Ledger to see the list and so in this case it would be the participating banks and the central bank would issue the tokens and settle the transactions by simulating central bank reserves, I'm still looking for info on that because it's pretty sparse so far, but what? It looks like it's a test program that individuals won't be participating in, and it looks like the banks, the central bank, the Federal Reserve, and the New York Center for Innovation are going to run this pilot program.
- software as a simulation test besides the current transactions so they are parallel and they will simulate the real transactions but they will all be included in their simulation and they won't actually use this with the people involved and cause.
- The reason they do this is to test the technical feasibility that leads to the legal viability and commercial viability of distributed ledger technology again a whole lot of terms here so let's break down the technical feasibility of that.
- I mean are we smart enough and capable enough to be able to pull this off because there's no simple job here and to be able to roll out cbdc to the population and really make it work number one you just have to be.
- They're able to get the technicalities out of it and that's quite an accomplishment to achieve and then you know one of the reasons this is important is because it's very difficult to implement and so all they do with that is.
- Just doing that is the main thing is to see we've built these do they work in a very small isolated simulation they're basically going to be bug testing and I would imagine a lot of this has to do with a KYC small cash counter.
- Patriot Act money laundering laws to learn how these types of laws and regulations apply to the distributed ledger between banks, participating banks, and the central bank to know how to process this information and keep it secure and.
- It's common and maybe it makes law enforcement easier I would imagine that would be the ultimate goal because instead of having a bunch of separate ledgers that each bank manages on its own and that's the way it works now and then they do a bulk settlement at the end of the day instead.
- To do all of that you have one shared ledger that everyone can participate in it's a lot easier to track transactions to track individuals moving money to watch tax evasion to watch money laundering happen to look for.
- Terrorist financing and things like that and so if everybody's using the same ledger, I would imagine one of the end goals is to make law enforcement for these things easier rather than more complex and it makes sense for us to make business sense.
business to pursue something like that and the short answer to that is really quiet because a central bank digital currency means that every individual and every institution of every business is going to have a live account
With a central bank rather than just a bank so you get past the banking layer of the system it's all centralized so the question is what do the banks do the answer is they act as the plumbing of that financial system that acts as the nodes in that network because
They're not needed for banking and deposits anymore it's all shifted to the central bank so now they have to be just the infrastructure of the system the answer is of course business applicability here otherwise they'll stop
In existence and then finally here's the important thing the New York feds said the project could potentially extend into multi-currency operations and regulated stablecoins and as I said in the beginning in the midst of the most epic
Crash and fraud in cryptocurrency history With the FTX crash and Sam the banker freed you to know he's probably on The Run even though now he seems to say he's not on the run lo and behold this whole thing is unraveling before our eyes
I say hey this can exist side by side and extend to regulated stablecoins I said from the start the reason they refrain from trying to regulate this space is that they know if they hang around long enough there will be an epic meltdown because they are there
It was so much money that was out there that it attracted so much fraud that they wanted it to fall apart so people beg to organize once everything starts to fall apart you attack the people who bring you down Organize a few stablecoins and bring them into the new system along with the new cbdc and in case you doubt how risky a central bank digital currency is about the current test they start this 12-week test
They said programmable US dollars may just be needed to support new business models and provide a basis for much-needed innovations in financial settlements and infrastructure projects like this could be expanded to take
A broader view of opportunity at the end of the day central bank digital currencies are programmable money which means whoever controls that money can program how it works they can cause any transaction they want
If it happens they can stop any transaction they want from happening they can reverse any transaction that has already been made which can add to your account a thousand dollars say spend it in the next 30 days or lose it they can add money to your account and
Suppose it can only be spent in businesses that are owned by certain groups based on which class we decide it can say people are stocking X Y and Z so we introduce a new tax to make this item more expensive to reduce demand
They can set limits on spending anything saying once you reach a certain amount to spend on these categories you stop working for the rest of the month that money is programmable and the extent of the tyranny just stops at
The will of the person in control and the more powerful a tool like this has the more power-hungry people it attracts so hopefully the technical feasibility part they are testing falls on their face and they
I realize how incompetent they are in facing some of these complex issues and can't stand on their own two feet as always,
thank you very much and I look forward to your articles and comments.
