The last time Americans were given a “new form of money,” the country abandoned the convertibility of dollars into gold, and the value of the fiat dollar has declined ever since. You can see on the chart below that the dollar is a pittance of its former value.
Now, the world’s central bankers are looking toward the adoption of another “new form of money”—central bank digital currencies (CBDCs). Agustín Carstens, the head of the Bank for International Settlements (a.k.a. the BIS, often called the central bank of central banks), wants to introduce CBDCs as “these new forms of money will sit at the core of the future financial system.” Coindesk.com reports:
Central bank digital currencies (CBDC) are key to innovating financial systems, and the private sector will play a major role in getting them to market, said Agustín Carstens, the head of the Bank for International Settlements.<
“Whether in wholesale form – as a type of digital central bank reserve – or retail form – as a digital banknote – it is increasingly clear, at least to me, that these new forms of money will sit at the core of the future financial system,” Carstens said in a speech at a conference on CBDCs in Basel, Switzerland on Wednesday.
Under the group’s recommendation, central banks around the world are exploring issuing digital versions of sovereign currencies. But monetary authorities will have only a limited role to play in the issuance of CBDCs compared with the private sector, according to Carstens.
“Most customer-facing services will remain in the private sector’s remit,” Carstens said. “Cyber resilience among these institutions will also be crucial to maintaining trust in the system as a whole … And this activity does not need to be done by individual organizations in isolation – we can share knowledge. In fact, collaboration between the private and public sectors is key to manage existing and emerging cyber threats,” he said.
Action Line: Your Survival Guy is not a fan of CBDCs, and you can read more about the dangers of CBDCs here. Click here to subscribe to my free monthly Survive & Thrive letter.
E.J. Smith - Your Survival Guy
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