Loading ...CENTRAL BANK OF CANADA DUMPS THEIR CENTRAL BANK DIGITAL CURRENCY — CBDC’S ARE NOT THE FUTURE — A CENTRAL BANK FIASCO THE DIGITAL LOONIE WAS A BAD IDEA RIGHT FROM THE START
FROM BOOM FINANCE
The central Bank of Canada has abandoned their plan of launching a Central Bank Digital Currency (CBDC) – The so-called Digital Loonie.
This is huge news in the world of money and finance.
BOOM has steadfastly explained for many years that dreams of electronic “digital” cash in any format are always intellectually bankrupt. But the matter is worse than that. All global central banks and their associated armies of economists while “researching” CBDC’s, have failed to see the huge economic advantages that accrue when large amounts of physical cash are in circulation, acting as a natural buffer to money created as credit.
The Bank of Canada last week made the following statement about their 5 years of planning — “The Bank has undertaken significant research towards understanding the implications of a retail central bank digital currency, including exploring the implications of a digital dollar on the economy and financial system, and the technological approaches to providing a digital form of public money that is secure and accessible”.
And the conclusion? Abandonment of the entire concept.
They could have just asked BOOM at the outset. That would have saved them a lot of effort, expense and embarrassment.
Over the last 6 – 7 years, BOOM has been a strong opponent of the concept of so called Central Bank Digital Currencies. Alternatively, BOOM has recommended increased issuance and usage of Physical Cash and has urged central banks to look afresh at the huge advantages that cash brings to any economy.
What is good about Physical Cash?
It is interest free when it is created. And it remains cost free of interest charges throughout its useful life. It is anonymous when used. It is very hard to counterfeit. It is entirely fungible (every $ 5 or $ 50 Dollar bill is identical) which embodies trust. It is an easy and trustworthy way to settle transactions. It speeds transactions in local economies. Physical cash can circulate quickly outside the banking system and thus provide an increased velocity of money. It is national money created for the people under the instructions of their representative, national government. Thus, it is sovereign money. But, most importantly, it is a strong natural buffer to money that has been created as a bank loan – credit money – which carries interest costs (because it is created as a loan) and which dominates the money supply in most modern economies. In the USA, for example, credit money is now 98 % of the newly created money supply with physical cash only comprising 2 %. This dominance of credit money dramatically favours the asset rich wealthy who always have more physical assets to offer as collateral for more bank loans compared to the asset poor middle class and working class. This causes enormous societal and economic tension. Physical cash in large volumes relative to credit money volumes is also a natural buffer against asset price inflation and CPI inflation. Holders of physical cash can see and react to price rises immediately if they have to hand over more notes and coins to settle every day transactions. This creates reluctance to accept price rises.
If you think clearly about all of the advantages to society that accrue from the circulation of physical cash, then it is obvious that all central banks and representative governments should promote and encourage increased use of physical cash.
What is bad about CBDC’s?
For a start, CBDC’s are fraudulently promoted as being innovative, special and long overdue because they are “digital”. This is dishonest, misleading and a false representation. Almost all money in circulation has been digital since computers were first used in banking way back in the 1960’s. We have had electronic, digital money for over 60 years now. It is not something “new” or “innovative”. The next problem with CBDC’s is trust. The people who live and work in the real economy where goods and services are transacted never interact with their central bankers. Most have no idea who their central bankers are or what they do. Central banks have commercial/retail banks as their clients, not the people in the real economy. So, trust between the people and the central banks simply does not exist to any significant extent. And, believe it or not, almost all central banks are prohibited by law from issuing money into the real economy and from dealing directly with the people. Last but not least, the people do not want all of their transactions tracked in real time by any central banker or by their governments. They are suspicious of surveillance. And they are becoming increasingly suspicious of the intentions of both politicians and central bankers in that regard. When there is suspicion and lack of trust, a CBDC simply cannot work. The people of Nigeria rejected their CBDC experiment wholeheartedly. The people of China have also rejected theirs.
This incredible Piece continues in the first comment
WOW EH ?
heres’s the link
a lot more amazing stuff in this report….how come we never hear this anywhere else ?
https://boomfinanceandeconomics.substack.com/p/boom-finance-and-economics-29th-september?
The Bank of Canada is ‘scaling down’ plans for a possible digital loonie
https://www.msn.com/en-ca/money/other/the-bank-of-canada-is-scaling-down-plans-for-a-possible-digital-loonie/ar-AA1r8nd0?
On 30th July, 2023, BOOM reported that the central bank governor of China, Yi Gang, admitted publicly while in Singapore that total transactions settled with the E-Yuan (e-CNY) amounted to just 1.8 Trillion Yuan since August 2022. He was then attending a meeting organised by the Monetary Authority of Singapore. His statements could not have been more public and honest. Expressed in US Dollars, that is equivalent to only US $ 257 Billion in just under 12 months. The Annual GDP of China is about $US 18,000 Billion. So, this is roughly equivalent to 1.4 % of total GDP transactions. Yi Gang also said that e-CNY in circulation was equivalent to only 0.16% of China’s M0 money supply, or cash in circulation. The people of China have essentially rejected the idea.
The Nigerian CBDC experience, called the eNaira and launched in October 2021, was much worse. During a 12 month period, the average total value of eNaira transactions was 923 million Naira per week. That sounds a lot but was only 0.0018 % of the average amount of M3 Money. The Nigerian CBDC experiment was such a disaster that the governor of the central bank, Godwin Emefiele, was eventually arrested (although there were other issues as well). On 18th June 2023, BOOM wrote — “If a central bank wanted to destroy trust in its management and create economic collapse, then this would be a perfect plan. It begs investigation. The central bank seemed to be obsessed with the idea of a “cashless” economy. And yet most Nigerians use cash every day and more than 50% do not have a bank account.”
BOOM is now calling for all central banks to abandon all efforts to introduce Central Bank Digital Currencies.
CBDC’s are an intellectually bankrupt idea and legally untenable. The whole CBDC “experiment” has been a fiasco right from the get go. Cashless economies are not something that governments or bankers should ever consider or aspire to. In fact, they are a dangerous gamble which could ultimately lead to the disruption of civil society and cause economic chaos.
This is great news. A relief actuaally. There have just been so many economic and political threats against us all lurking on the horizon that its become really depressing watching so many of them gradually coming to fruition aganst the collective will of the people. If some of the worst ideas die it cannot come soon enough. I would like to see the idea of 15 minutes cities be relegated to the dumpster as well. And then 5G removed from our cities and towns. One step at a time!
Hear hear …but this is a HUGE Victory..alas the Central banksters saw a huge backlash and or complete apathy towards these freakish things and are backing off
It takes a big majority….so thats what we will show them
The bankers think they run the world – well it’s nice to see countries giving them the big middle finger to their cbdc’s. Now let’s do it with everything else they are proposing.