– Part Two of ‘The Four Pillars of Control’
Author: Steve Barker
This is the second article in a series of four entitled ‘The Four Pillars of Control, where IT specialist and director Steve Barker explains what he identifies as the key areas of our lives where these technologies are planned to be used …
Pillar 2: Central Bank Digital (CBDC)
CBDCs are simply state-regulated digital money, and even two years ago, Rishi Sunak in his then capacity as Chancellor of the Exchequer was keen on them being introduced. Since then, with Rishi having moved one address along Downing Street, the Bank of England has published articles on its plans to introduce a Digital Pound. Across the pond, our friends in America are exploring the same, with the introduction of the affectionately named Biden Bucks.
According to the Bank of England, CBDCs like the Digital Pound will solve many problems. They will be totally safe and secure, and will prevent illegal activities including theft, money laundering, fraud, and tax avoidance/evasion. We’re told it will also be energy efficient and will allow our financial transitions to become frictionless.
In common with established cryptocurrencies such as Bitcoin, CBDCs will need a digital address to identify each person’s virtual wallet, which would be the DID outlined above. It is there that any similarity with Bitcoin ends; Bitcoin was built on the concept of decentralisation, and it is beyond the power of any individual or group to change its implementation, conversely, as the name suggests, CBDCs would be entirely under the control of the central banks, and therefore the state.
Modern economics has become a battle against inflation. Since the removal of the gold standard, central banks and governments have three levers they can pull to control inflation: interest rate changes, the creation of new money through quantitative easing and policy changes, both nationally through taxation, and internationally through trade tariffs and controls.
It is my view that the efficacy of these levers is waning, as evidenced through the current cost of living crisis which is impacting the entire developed world, and the inability to stop inflation. CBDCs provide a fourth lever allowing more effective control by, for example, applying expiry dates to certain sections of the monetary system. What better way to stimulate spending than to literally have a use-by date on people’s money?
It would be possible for certain digital wallets to be switched off entirely (a feature Justin Trudeau would have found extremely useful a few months ago), and it goes without saying that every transaction made using a CBDC would be fully transparent to the state.
Going further down the rabbit hole, CBDCs could be used to further globalise production, forcing smaller companies unable to benefit from economies of scale out of business through increasing transaction and infrastructure costs. My guess is that the hardware needed for vendors to support CBDCs would be leased rather than purchased.
The Bank of England press release is quick to point out that if introduced, CBDSs would not replace cash, and that they would prevent the further adoption of new forms of money that pose risks to the UK’s financial stability, referring of course to Bitcoin. Can we really trust these claims?
– Steve Barker
In the next article Steve Barker explains his third pillar of control … Universal Basic Income (UBI).
– Paul Heaney, March 2023
Link to previous article: ‘The Four Pillars of Control – Part 1: Digital Identity (DID)’ ‘The Four Pillars of Control’ – The Brighter Times
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