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12/19/22: THE 12 DAYS OF C-DAY

Ron Patton | December 19, 2022

After so many stories have spread worldwide implicating Sam Bankman-Fried with the FTX scandal, the Ukrainian government, Democratic leaders, and mainstream media found a way to avoid the so-called conspiracy theories and attack crypto by providing the answer: Central Bank Digital Currency. And while debates about crypto legislation and CBDC have been playing out on Capitol Hill for years, the implementation of a cashless society is in the works. The C-Day blockchain test run by major financial institutions on December 13 went as planned but the propaganda was barely getting into the race. Tonight on Ground Zero, Clyde Lewis talks about THE 12 DAYS OF C-DAY.

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12/19/22: THE 12 DAYS OF C-DAY

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I received a message from a listener who asked me if C-Day has come and gone already and I said, yes it has but you wouldn’t have known it if you were watching the mainstream media. I am sure that most people have not been affected by it. In fact, I reported that it will come and go without fanfare because there are too many distractions that need to be reported. From nuclear fusion to the silly idea of a tripledemic.

What is the trick regarding the whole return of fear-mongering with regard to RSV, Flu, and COVID? Well, it is once again an effort to convince us that being human is a problem.

Isn’t all that is going on in the world right now have the same intention?—the “Woke Culture,” the “Cancel Culture,” the “transgender/identity” issue?

It seems that whatever “powerful demon” that likes to dabble in human cognitive dissonance has been assigned the task of doing whatever possible to make humans confused, and thus dissatisfied, with being a decent and smart adult human being.

I find it difficult not to include any advancement in technology with the “bad things.” Any of the things we could say are “good” have only been effective in providing convenience, avoidance of hard work, and the extension of life, which are not necessarily noble accomplishments.

Advanced technology is a blessing and a curse, and it certainly is going to change our lives dramatically.  We all know that it will be used in the future to track us and watch us and monitor our spending and how we do transactions

I have to admit that I had a show planned for C-day on December 13th but I held back because the media somehow found a distraction — Sam Bankman-Fried.  After so many stories have spread all over the world implicating Sam Backman-Fried. The Ukrainian government and Democratic leaders and the media finally found a way to avoid the so-called conspiracy theories and attack crypto, providing the answer: Central Bank Digital currency.

C-day went as planned, but the propaganda was just barely getting into the race.

Meanwhile under the pretext of fighting “money laundering and terrorist financing”, the European Union will be entirely outlawing all cash payments greater than 10,000 euros.

The following comes from the official website of the Council of the European Union By limiting large cash payments, the EU will make it harder for criminals to launder dirty money. An EU-wide maximum limit of €10.000 is set for cash payments. Member states will have the flexibility to impose a lower maximum limit if they wish. So this means that in some countries the upper limit could potentially be a lot lower than 10,000 euros.

But instead of framing it as a major move toward a cashless society, the EU is trying to claim that this is all about fighting terrorists.

The Minister for Finance in the Czech Republic stated the following just days before C-day:

Terrorists and those who finance them are not welcome in Europe. In order to launder dirty money, criminal individuals and organizations had to look for loopholes in our existing rules which are already quite strict. But our intention is to close these loopholes further and to apply even stricter rules in all EU member states. Large cash payments beyond €10.000 will become impossible. Trying to stay anonymous when buying or selling crypto-assets will become much more difficult. Hiding behind multiple layers of ownership of companies won’t work anymore. It will even become difficult to launder dirty money via jewelers or goldsmiths.

This has made way for the digital Euro.

The following comes from the official website of the European Central Bank…

We are working with the national central banks of the euro area to investigate whether to introduce a digital euro. It would be a central bank digital currency, an electronic equivalent to cash. And it would complement banknotes and coins, giving people an additional choice about how to pay.

How nice of them.

As they take cash away from the general population, it turns out that they have already been working on the replacement. We were warned– but the media will get around to talking about this.

Incredibly, the ECB even has the gall to claim that this new digital currency will be “like cash”…

A digital euro would offer an electronic means of payment that anyone could use in the euro area. It would be secure and user-friendly, like cash is today. As central bank money issued by the ECB, it would be different from “private money”, but you could also use a card or a phone app to pay with digital euro.

Yes, you will be able to spend it just like you can spend cash. But unlike cash, a digital euro will allow authorities to track whatever you buy and sell with it.

And this is all happening as the private cryptocurrency industry is imploding all around us.

That is why on C-day – FTX founder Sam Bankman-Fried was arrested in the Bahamas.

Again timing is everything.

Many had believed that decentralized cryptocurrencies would be the future of commerce, but global central banks were never going to allow that to happen.

Instead, it appears that they intend to force all of us onto a cashless grid in which everyone uses digital currencies that are issued by them.

Needless to say, a lot of people out there are quite wary of any moves toward a cashless society because they believe that it is part of the “end times” scenario described in the Bible.  According to one recent survey, approximately 39 percent of all Americans are convinced that we are living in the “end times” right now.

It may seem dystopian—something that only totalitarian governments would do—but there have been recent cases of asset freezing in Canada and Brazil. Moreover, a CBDC would give the government the power to determine how much a person can spend, establish expiration dates for deposits, and even penalize people who saved money.

The war on cash is also a reason why governments want to implement CBDCs. The end of cash would mean less privacy for individuals and would allow central banks to maintain a monetary policy of negative interest rates with greater ease (since individuals would be unable to withdraw money from commercial banks to avoid losses).

Now with a CBDC instead of a deposit being a commercial bank’s liability, a deposit would be the central bank’s liability.

Soon people will be offered to try the digital token option –when you are, please understand that they may even offer you money in order to try it.

I would advise against it.

The Chinese government is waging war on cash. And they are not alone. In 2017, the International Monetary Fund (IMF) published a document offering suggestions to governments—even in the face of strong public opposition—on how to move toward a cashless society. Governments and central bankers claim that the shift to a cashless society will help prevent crime and increase convenience for ordinary people. But the real motivation behind the war on cash is more government control over the individual.

On December key players in the Swiss financial industry successfully developed and tested a novel settlement mechanism for tokenized investment products on a public blockchain testnet infrastructure. A smart contract, developed by the Capital Markets and Technology Association (the CMTA), allows for streamlined processes, reduces complexity, raises security, and eliminates counterparty risks from trades. The CMTA’s proof of concept marks a milestone for the Swiss financial industry.

If you remember We reported back in August that C-day was coming when the Fed announced FedNow. FedNow will be an instant payment system and is scheduled to be launched between May and July 2023.

FedNow is practically identical to Brazil’s PIX. PIX was implemented by the Central Bank of Brazil (BCB) in November 2020. It is a convenient instant payment system (using mobile devices) without user fees and a reputation as being safe to use.

A year after its launch, PIX already had 112 million people registered, or just over half of the Brazilian population. Of course, frauds and scams do occur over PIX, but most are social engineering scams (see here, here, and here) and are not system flaws; that is, they are scams that exploit the public’s lack of knowledge of PIX technology.

Bear in mind that PIX is not the Brazilian CBDC. It is just a payment system. However, the BCB has access to transactions made through PIX; therefore, PIX can be considered the seed of the Brazilian CBDC. It is already an invasion of the privacy of Brazilians. And FedNow is set to follow suit.

Additionally, the New York Fed has recently launched a twelve-week pilot program with several commercial banks to test the feasibility of a CBDC in the US. The program will use digital tokens to represent bank deposits. Institutions involved in the program will make simulated transactions to test the system. According to Reuters, “the pilot [program] will test how banks using digital dollar tokens in a common database can help speed up payments.”

Banks involved in the pilot program include BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, US Bank, and Wells Fargo. The global financial messaging service provider SWIFT is also participating to “support interoperability across the international financial ecosystem.”

The IMF is also thinking of a way to connect different CBDCs under a single system. In other words, the IMF plans to create a PIX/FedNow for CBDCs around the globe:

Things could change as money becomes tokenized; that is, accessible to anyone with the right private key and transferable to anyone with access to the same network. Examples of tokenized money include so-called stablecoins, such as USD Coin, and central bank digital currency.

With a CBDC, it would be easier for the government to carry out expansionary monetary policies which cause misallocations of resources and business cycles and exert greater control over citizens’ finances.

People have said that they would be very reticent to do these digital transactions as they realize what could go wrong and yet the world banks were excited to see that the Christmas spirit of cashless transactions has not gone away –even in the face of a bad economy.

Many people that rushed for black Friday deals were at a minimum this year as Cyber Monday became the preferred way of buying Christmas gifts this year.

From Cyber Monday through early December, online sales remain high. However, as Christmas day comes closer, consumers are more likely to go back to stores. Indeed, in the week before Christmas, 73% of U.S. purchases and 87% of purchases are made in-store, As crunched consumers begin to fear that their online orders won’t be delivered on time. It also makes sense that those who procrastinate get to the point where they need a trip to “finish off” their shopping lists.

With cyber exchanges growing and credit cards being maxed it is no doubt that people this year paid less in cash than they did digitally.

As countries around the world rush to think through how to approach the digital transformation of the global economy, one common point is to look at the current payment system.

While most payments in the modern financial system are digital (for example, the way a central bank tabulates the number of reserves available for its member banks), cash is still a way many people choose to make payments. However, this percentage is dropping and currently represents about an 18% share of global transactions.

This was good news for those who wanted to implement the Central Bank Digital Currency or CBDC.

Jim Rickards and other economists were predicting that all of the data would be gathered by December 13th. 2022 we would see C-day where digital currencies would be offered and there would be offers to incentivize people to own and use digital tokens.

Well as we were reporting the event would not be announced in the media, and most people would be unaware of the progress of the digital moves to reduce and eventually eliminate the use of cash.

On December 13th or C-Day, the authorities made a move to distract people from their overt moves toward a cashless society. Sam Bankman Fried of FTX was arrested in the Bahamas. American prosecutors have filed unspecified charges against the FTX founder, and are ‘likely to request his extradition,’ almost one month to the day from when his company filed for Chapter 11 bankruptcy.

In the meantime, Bankman-Fried is being held in custody.

It was at this time the media finally decided to wake up and report the whereabouts of Bankman-Fried– and yet nothing was said about the money laundering that happened, the funds sent to Ukraine and the massive contributions to the democrats during the midterms.

The news of the FTX CEO’s arrest comes just hours before he was set to testify in front of the House Financial Services Committee over the $32 billion collapse of FTX.

Again, we need to understand the timing of this and why the media opted to finally recognize and report about the arrest.

It can be speculated that the arrest was to vilify cryptocurrency in favor of the CBDC.  While the attention was focused on Bankman-Fried — the moves were made to push us closer to a central bank digital currency.

The FTX debacle is just the latest and largest in a string of prominent crypto failures. Finance ministries and legislatures around the world are trying to figure out rules that can help rein in the worst actors in the field.

But while the regulators get to work, central bankers don’t want to sit on the sidelines. Cryptocurrencies and stablecoins are being used all over the world. In India, for example, nearly 10 percent of the population now owns or is planning to invest in cryptocurrency.

In the United States, it’s closer to 13 percent. Central bankers are concerned about losing monetary sovereignty and becoming blind to what is happening inside their own economies. They see a central bank digital currency as a way to evolve and compete in this changing landscape.

While the world was busy watching the collapse of crypto exchange FTX, the US Federal Reserve system made an important move.

Speaking at the Singapore FinTech Festival on November 4, a senior official from the New York Federal Reserve surprised many in the audience by announcing that for the past several months, the New York Fed has been developing a “wholesale” central bank digital currency (CBDC) designed to speed up transfers between banks around the world.

In a subsequent white paper on the project—named Project Cedar—the New York Fed explained that it has already completed stage one of testing and proved that international currency transactions could be done both quickly and safely through the blockchain.

But buried in the technical details was a revealing line on the ambitions of the project: The goal of the new network is “to reduce settlement risk in cross-border, cross-currency transactions.” The message? We see what the world is doing on CBDCs, and the United States is not going to be left behind.

According to new Atlantic Council research, the United States, thanks to Project Cedar, has moved into the development of a central bank digital currency and joined its colleagues at the European Central Bank, the Bank of Japan, and the Bank of England in making the leap forward.

All of these jurisdictions have different projects (some, such as the United States, are focused on wholesale, while others, such as the eurozone, are hard at work on a “retail” digital currency that could be used to buy an espresso).

Many of these central banks, including the Fed, have not actually decided to issue a CBDC—for that, most of the central banks will need legislative approval. And there are major privacy and cybersecurity challenges to address before most Americans open up their phones and use the digital dollar.

The final motivation is geopolitical: Russia’s invasion of Ukraine. In the ten months since Russia’s invasion, the GeoEconomics Center’s research has shown that interest in wholesale central bank digital currency has nearly doubled. A range of countries including China, India, Indonesia, South Korea, and Brazil are pursuing this new technology. So what does a land war in Europe have to do with the future of finance?

When the United States and Group of Seven (G7) responded to Russian President Vladimir Putin’s invasion, they did so not with direct military engagement but with the most sweeping set of financial sanctions ever levied against a major economy. The West froze Russian reserves, cut Russian banks off the SWIFT payment messaging system, and slapped over 6,500 individuals with sanctions—and the rest of the world took notice. In conversations we have had with central bankers, it was clear that financial sanctions made several countries think differently about the dollar. Suddenly, the possibility that any country on the G7’s bad side could be cut off from the ability to transfer funds between banks became very real. The logical move, for many countries, was to develop a backup plan. That’s where central bank digital currencies come in.

The dollar is involved in approximately 88 percent of all foreign exchange transactions. That dominance comes in part from the fact that the dollar is a stable liquid asset in demand by nearly every central bank and financial institution. But only 60 percent of official cross-border contracts are actually denominated in dollars. That’s because even when countries aren’t settling in dollars, they still use it as a trusted intermediary between other currencies. Sometimes international transactions can take days to finalize, so having the dollar as the agreed-upon conversion helps both parties manage risks and reduce costs. Technologies such as CBDCs that allow countries and their commercial banks to settle currency across borders almost instantly are changing the nature of cross-border flows of money. Last month, Hong Kong, China, Thailand, and the United Arab Emirates showed what settlements may look like in the future when they completed twenty-two million dollars in cross-border transactions on the blockchain in the first successful test of its kind.

Suddenly the United States could see the future arriving faster than it previously anticipated. If countries could settle currencies between themselves without touching the dollar, they could significantly soften the bite of sanctions. While debates about crypto legislation and central bank digital currencies have been playing out on Capitol Hill for years, up until now little concrete action has been taken.

The answer was C-Day and it has been fulfilled. The offer is now there — all we need is a crisis or incentive to make people jump at the opportunity.

More testing will be done over the next six months, and it will likely be a year before any real money is settled on a US central bank digital currency network. But the signal from the New York Fed was clear: If you are a country considering developing a CBDC, you have a new model to pay attention to.

The United States has officially made the CBDC a reality.

 

Written by Ron Patton

Comments

This post currently has 4 comments.

  1. joe

    December 19, 2022 at 9:35 pm

    THE END of bitcoin the Ponzi scams. WATCH Russia roll over Ukraine With fire bombing carpet runs then North Korea will hit Taiwan China hits Japan. india hits pak.

  2. Jimbo

    December 22, 2022 at 11:45 pm

    Gold is the ONLY asset that every central bank in the world owns, and they are steadily increasing their holdings. That should tell US something. What it tells me is that physical gold will be the backing for a new gold-stablecoin. Even as the dollar was once “backed by gold,” this new instrument will be directly convertible from a tangible physical asset into a secured digital version, and back again. Blockchain will enable scalable, decentralised transacting. And in every participating region, native currency will peg to this new cryptogenic “gold standard.”
    The only leg left is to insure digital wallets’ security by privacy to transactor, as a dollar bill user is anonymous with its purchase. The Gov’t has NO inherent or Constitutional right to monitor all financial transactions as potential crime, unless/until they deem it otherwise!

    A “free market free enterprise” economy MUST remain quintessentially private, to be Free.

    Therefore securing of users identity through anonymous privacy, while verifying same as authentic/genuine, completes the circle of returning legitimate and just power held under the auspices of our US 10’th Amendment.

Comments are closed.




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