Central Banks Don’t Care About Dictators

Finally, a report on some of the dangers of a truly digital central bank currency. It’s issued by the UN no less! Will it make any difference to the central banks attempting to make such a currency. Certainly not to the major ones.

The major central banks are interested in control of currencies. That a dictator is abusing currency is not going to change their minds about what is to be done. Nonetheless the report has been issued and circulated. It is from the the UN Economic Commission for Latin America and the  Caribbean (ECLAC).

The report, published on 1st May, says blockchain-based systems have many good qualities but can help a dictator find out a great deal about his subjects.

A CBDC would have the potential to be a very potent tool for social repression in the event that a dictator was to come to power. Under CBDC system, this hypothetical dictator would have the ability to deny participation in the financial system to political dissidents, and would also have access to a very complete picture of all entities having financial relationships with those dissidents.

This isn’t the real problem with blockchain and cryptocurrencies. The major problem is with the central banks themselves that want the ability to know about every single transaction possible and are counting on cryptocurrencies and blockchain to accomplish that task.

Heaven help us if we get to the point where transparency is so great that people cannot use cash as they choose. Already various regulations impinge on cash transactions using various guises that have proven in main to be untrue.

There can only be more upcoming and whether or not new currencies will be abused by dictators is not something big central banks will care about as they struggle to saddle the new currencies on us.

Central Banks’ Blockchain Is Not Intended to Be Anything New

The basic issue with central banks is that they have a monetary monopoly and can set interest rates where they like. They basically run money in this country and to a lesser degree around the world.

Because the Fed runs American money, that money is not free. It is controlled by a handful of people.

The Department of Defense and CIA are also involved in private markets but not specifically with money. These entities, including the Fed, likely report to even higher groups located in London’s City that are, at the very top, family conglomerates.

But in this article we will focus on fintech and money. According to Coindesk, “Bank of Japan, Bank of England, Bank of Korea, the National Bank of Cambodia, the Reserve Bank of Australia, the Hong Kong Monetary Authority, (The Peoples’) Bank of China” and others are formally starting or testing blockchain and other fintech elements.

As Coindesk also says, “In the mid-2015 … attention turned away from the potential threat of cryptocurrencies to the intriguing potential of the underlying technology.”

But Coindesk asks:

Will new tech allow it to consolidate influence over sprawling economies, reinstating monetary influence and changing the way we see banking? Or will its role end up being usurped by smart contracts and fragmented payment methods that devolve financial independence to end users?

This is getting toward the heart of the matter. Right now central bank fintech makes a pretense of creating blockchain like structures, but what is emerging is private and uses money similar to today’s money.

There’s no real effort to take advantage of the realities of blockchain. Additionally, central banks are not trying to create new kinds of money.

No matter what they say about the benefits of private money for purposes of public consumption, what central banks are actually trying to do is get rid of paper money entirely and create completely digital money.

It is money they will control just the way they control fiat money today. This has nothing to do with the beneficial elements of blockchain as a way of undoing current systemic problems.

But again we would have to make the point that the current system has been created to surround central banking and has proceed to be built up inch by inch and month by month for over a century.

Nothing that has emerged has been entirely accidental. And it is all intended to consolidate control at the very top.

Don’t be fooled by efforts of central banks to create blockchain based money. At root the money they come up with, if they come up with anything at all, will be as bad or worse than the current money.

Besides. the IMF has the next money waiting in the wings, a basket of world currencies called the SDR. It will include the yuan, the dollar and the pound but is controlled by the IMF and World bank. It is no better than what we have today. Doubtless over time it will be worse.

Quebec to Join R3

Quebec’s financial regulator, Autorité des marchés financiers (AMF), is joining the R3 Blockchain group to get a better sense of blockchain.

The regulator will see how it can better fulfill its mandate including ways to apply blockchain to its KYC (‘know your customer’) processes.

Lise-Estelle Brault, senior director derivatives oversight at the AMF, was quoted as saying “We need to build internal knowledge to have a critical eye and really understand these different use cases.”

Brault takes it for granted that KYC and other such mandates are necessary even though they haven’t been necessary in the past.

One reason might be terrorism, but terrorism is a fairly weak reed. In fact, there’s plenty of evidence that elements of United States intelligence were behind building up current terrorist groups, just as they were behind Al Quaeda.

Legislation is probably aimed at investigating Americans for purposes that actually have little to do with terrorism.

Blockchain applications are not intended to provide freedom and reduce middlemen but to reinforce the current system and make it more powerful than ever

That is the battle currently being waged and it will be long, drawn out and possibly violent (especially if you are one of the ones who has to go to jail).

The United Nations in Big Ethereum Test

The United Nations (UN) is offering coupons to thousands Jordanians using ethereum blockchain, according to Coindesk.

For about a month, coupons showing Jordanian dinars will be given to groups in refugee camps. Cashiers will use technology to “redeem the entitlements at the point of checkout.”

From the ground up, the solution was designed to scale, not just within Jordan, but beyond its borders to some of the 80 other countries served by the UN’s World Food Programme (WFP).

Some 100.000 people or more will receive coupons with all Jordanian refugees getting aid within two years.

The World Bank Helps Kenya Issue Bonds

The World Bank intends to utilize blockchain make Kenya’s financial system more successful. The World Bank wants to advance a mobile phone-bond called ‘M-Akiba’ which has already helped Kenya with $1.1m.

But Kenya now wants to market an additional $47m and is considering how blockchain can aid in the process.

The World Bank is reported as saying, “The project’s development objective is to strengthen the legal, regulatory and institutional environment for improved financial stability, access to and provision of, affordable and long term financing.”

And the Bank continues:

“The team has proposed to support them with market research on … assessing the use of fintech technology, particularly distributed ledger –Blockchain to simplify the platforms backing the system. The research is already planned … and is awaiting the approval of the PDMO.”

The World Bank is aiding government agencies such as the Capital Markets Authority and the Central Depository & Settlement Corporation in helping issue these bonds.

The question raised by these actions is why the World bank has to help at all.

Government Is as Involved With Anti-Crowdfunding as Hollywood

Coindesk says Hollywood isn’t making it easy to raise crowdfunding cash for movies.

Ideally, you should be able to raise money as you wish, but the way it takes place now, many small movies can only be crowdfunded in return for T shirts and the like.

And it’s not just Hollywood that is causing the problems but the US government through the SEC and various rules and regulations that make it hard to raise money.

The goal of Braid was to let crowdfunded projects make a profit. Both Hollywood and the US government are against this sort of thing though.

In particular Hollywood doesn’t want just anyone making movies, only those people it has picked to make them. Hollywood doesn’t want movies that challenge the corporate and government authority prevalent today.

It doesn’t want people to criticize the government especially nor point out that these days, with the enormous size of corporations, government and private entities are almost one and the same thing.

There is a word for what has happened to the US government – and Europe too. That words is fascism.

Mitzi Peirone, the director of Braid, points out quite reasonably that, “A Kickstarter movie could go on to make millions of dollars and the people that gave money in the first place wouldn’t see a return.”

She wants to change that, but the regulatory hurdles and significant.

Coindesk writes, “The whole narrative … illustrates the current difficulties in unlocking token sales as a funding mechanism for startups and projects – even movies.”

It seems as if Braid may get the funding done after all, but this isn’t the end of the regulatory road. The bottom line for funding is that the people at the top want to control it.

So no matter what moviemakers do, over time there will be still more rules and regulations.

Also pressure to make movies in a way that does not to criticize the fundamental problem, which is the conflation of government and the private sector.

Belgium Wants to Confiscate Bitcoin

Belgium has suggested removing cryptocurrencies and regulating new ones. Koen Geens, the Minister of Justice of Belgium, thinks cryptocurrencies are nothing but tools of criminals.

He said, “All of our anti-abuse legislation is based on the responsiveness of an intermediary in the financial sector and networks, like banks. The legislation we have now doesn’t include any virtual currencies because it they were no such at the time when this legislation was written. It is necessary to change the law so that we can deal with abuse with bitcoins.”

He wants to implement specific regulation that will enable the tracking and confiscation of coins. This is easier said then done however as those who have such coins are not necessarily going to admit that they are in their possession.

Thus there is a limit to what the Belgian government can do. Peer to peer transactions are notoriously hard to regulate or forbid. Some will turn in their coins if it comes to that. Others will not.

The war has begun.