Universal Cashless System...
Central banks around the world are examining the use of digital currencies.
As of recent, central banks of the U.K., Sweden, Thailand, China, and the US are studying whether there are advantages of the digital form of their fiat money.
And the answer is yes, the government and banking elites will seize even more power from the people.
Called central bank digital currencies (CBDCs), this “digital fiat” — digital money can be directly sent to people’s bank accounts. It eliminates physical cash – which is the end game for banking elites.
A CBDC gives a government complete control over its currency. This will increase their financial-surveillance over the people. When a bank fails, there will be no bank run, because people can’t withdraw their money from that bank. This means when a financial crisis strikes, it will allow governments to do “bail-ins” where the people, like it or not, will be forced to take a haircut on their deposits to save the failing institution.
And with that being said, the Executive Committee of the Italian Banking Association recently approved new general guidelines for a CBDC.
“Italian banks are available to participate in projects and experiments of a digital currency of the European Central Bank, contributing, thanks to the skills acquired in the construction of infrastructures and distributed governance, to speed up the implementation of a European-level initiative in a first nation. Since last year, the ABI has set up a working group dedicated to deepening the aspects related to digital coins and crypto-assets. Hence the 10 considerations shared by the Executive Committee,” the Italian baking association said on its website.
Here are the ten criteria for an Italian CBDC:
- Monetary stability and full compliance with the European regulatory framework must be preserved as a matter of priority.
- Italian banks are already operating on a Distributed ledger technology DLT infrastructure with the Spunta project. They are intended to be part of the change brought about by an important innovation such as digital coins.
- A programmable digital currency represents an innovation in the financial field capable of profoundly revolutionizing money and exchange. This is a transformation capable of bringing significant potential added value, particularly in terms of the efficiency of the operating and management processes. Hence the importance of dedicating attention and energy to develop, quickly and with the collaboration of all the ecosystem players, useful tools first of all for the development of the Euro area.
- Digital money needs to be fully trusted by citizens. To this end, it is essential that the highest standards of regulatory compliance, safety and supervision are adhered to.
- In particular, a Central Bank Digital Currency, thanks to the central role played by the Central Bank, represents the tool that more than any other can reconcile the needs of innovation, in line with the current reference framework of rules, existing instruments and interoperability with the analog world. The existence of such an instrument could at the same time reduce the attractiveness of instruments of comparable use but issued by private individuals or (in cases of complete decentralization) which cannot be identified, characterized by an intrinsically higher risk profile.
- With the aim of fully explaining the transformative potential of these instruments, the possibility, at the moment of study, of issuing a European CBDC intended for the public, which could represent an evolution of cash, is of particular interest. Thanks to the role of the banks, it is possible to identify technical solutions and reference models to preserve the current characteristics of cash, while introducing many benefits of the digital world (already proper to electronic payment instruments), such as the possibility of not losing the own money and, in this period of strong attention to health risk, to operate in contactless mode.
- Detailed work will lead to the identification of the distribution, conservation and exchange model of digital currencies that best fits the customer’s service needs, to maintain the effectiveness of the monetary policy transmission mechanisms and regulatory compliance. Of course, in each of these objectives, the role of banks is crucial.
- Achieving high ease of use, while ensuring full interoperability between the digital and analog world and a total level of circularity between all the players in the ecosystem, represents a success factor in the diffusion of these tools.
- Particular attention must be paid, according to the technological choices that will be adopted, to the citizens’ personal data protection profiles.
- Projecting these reflections into the future, it is possible to affirm that the availability of a CBDC will enable a series of use cases of great interest: to favor the transmission of value between peers, thus also facilitating the logic of exchange between person and machine and between machine and machine; allow the settlement of cross-border peer-to-peer transactions, mitigating the interest rate, exchange rate and counterparty risk; Promote, thanks to the programmability characteristic of these currencies, the execution of exchanges upon the occurrence of predefined conditions, ultimately reducing administrative processes.
A post-corona world has given the financial elites a window of opportunity to begin the implementation of transitioning economies into a universal cashless system:
It appears the end of physical cash is ahead.