JakeStarkey
10-08-2021, 01:39 PM
https://www.nationalreview.com/2021/10/bidens-beijing-style-plan-for-single-payer-banking/?fbclid=IwAR06pZrClJMTBrAnQw-E2C62E9aEa1jikMoTv_MDkCr_9Xc3h5SWocK1FPs
hina has established itself as a pioneer in yet another high-tech field: that of blockchain-based central-bank digital currencies, or CBDCs. It’s not surprising that China would embrace such a technology. What is surprising is the interest in Chinese-style CBDCs in the White House, and even among governors of the Federal Reserve.
CBDCs work by marrying the technology underlying Bitcoin with the monetary policies of traditional fiat currencies like the U.S. dollar or the renminbi. But unlike Bitcoin, whose transactions run on a decentralized network and are impossible to censor, CBDCs are wholly controlled and tracked by the government. Despite official denials, China’s digital yuan project — called e-CNY — will enable the government to achieve total financial surveillance of its population. Every time a Chinese citizen buys so much as a soft drink, the People’s Bank of China (PBOC) will know about it.
In combination with China’s “social credit” system, the e-CNY will also enable China to directly send money to, and take money from, favored and disfavored individuals. People and businesses who speak out against the government can have their bank accounts instantly wiped out and find themselves de-platformed from economic life. Note that while China had repeatedly harassed Hong Kong’s pro-democracy Apple Daily by jailing its executives, the government succeeded at censoring the newspaper only by freezing its bank accounts (https://www.wsj.com/articles/hong-kongs-apple-daily-will-close-after-government-choked-funds-11624437029).
This financial-surveillance technology is not theoretical. The PBOC has successfully piloted the technology in ten regions of Saule Omarova (https://www.nationalreview.com/corner/biden-central-planning-and-saule-omarova/), President Biden’s nominee to lead the Office of the Comptroller of the Currency, is a champion of bringing a Chinese-style CBDC to America. In a 2020 Cornell Law School paper (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3715735), Omarova wrote that adopting a full-fledged CBDC in the U.S. would enable the Fed to “fully replace — rather than compete with — private bank deposits” and to establish Fed control over “the very process of generation and allocation of financial resources, . . . directly crediting and debiting the accounts of all participants in economic activity.” That would amount to transferring Congress’s constitutional power of the purse to the unelected Federal Reserve Board.
Once the Fed has control of all Americans’ savings and checking accounts, she writes, it will be able to “function as a hybrid of a sovereign wealth fund and a private equity firm,” printing money to spend on infrastructure projects like high-speed rail. The Fed’s engorged balance sheet would empower it to short high-flying stocks, thereby signaling “to the market [the Fed’s] determination that current prices . . . are artificially inflated and accordingly best suppressed,” Omarova writes.
Not only does Omarova have allies in the Biden White House, but also at the Fed itself. Lael Brainard, the Left’s favorite to replace Jerome Powell as chair of the Federal Reserve Board, has led an initiative to explore the Fed’s ability to implement a CBDC. Brainard believes that CBDCs can “increase financial inclusion” by helping those without bank accounts deposit directly with the Fed. But the opposite is true, even if you believe that the Fed’s intentions are wholly benign.
hina has established itself as a pioneer in yet another high-tech field: that of blockchain-based central-bank digital currencies, or CBDCs. It’s not surprising that China would embrace such a technology. What is surprising is the interest in Chinese-style CBDCs in the White House, and even among governors of the Federal Reserve.
CBDCs work by marrying the technology underlying Bitcoin with the monetary policies of traditional fiat currencies like the U.S. dollar or the renminbi. But unlike Bitcoin, whose transactions run on a decentralized network and are impossible to censor, CBDCs are wholly controlled and tracked by the government. Despite official denials, China’s digital yuan project — called e-CNY — will enable the government to achieve total financial surveillance of its population. Every time a Chinese citizen buys so much as a soft drink, the People’s Bank of China (PBOC) will know about it.
In combination with China’s “social credit” system, the e-CNY will also enable China to directly send money to, and take money from, favored and disfavored individuals. People and businesses who speak out against the government can have their bank accounts instantly wiped out and find themselves de-platformed from economic life. Note that while China had repeatedly harassed Hong Kong’s pro-democracy Apple Daily by jailing its executives, the government succeeded at censoring the newspaper only by freezing its bank accounts (https://www.wsj.com/articles/hong-kongs-apple-daily-will-close-after-government-choked-funds-11624437029).
This financial-surveillance technology is not theoretical. The PBOC has successfully piloted the technology in ten regions of Saule Omarova (https://www.nationalreview.com/corner/biden-central-planning-and-saule-omarova/), President Biden’s nominee to lead the Office of the Comptroller of the Currency, is a champion of bringing a Chinese-style CBDC to America. In a 2020 Cornell Law School paper (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3715735), Omarova wrote that adopting a full-fledged CBDC in the U.S. would enable the Fed to “fully replace — rather than compete with — private bank deposits” and to establish Fed control over “the very process of generation and allocation of financial resources, . . . directly crediting and debiting the accounts of all participants in economic activity.” That would amount to transferring Congress’s constitutional power of the purse to the unelected Federal Reserve Board.
Once the Fed has control of all Americans’ savings and checking accounts, she writes, it will be able to “function as a hybrid of a sovereign wealth fund and a private equity firm,” printing money to spend on infrastructure projects like high-speed rail. The Fed’s engorged balance sheet would empower it to short high-flying stocks, thereby signaling “to the market [the Fed’s] determination that current prices . . . are artificially inflated and accordingly best suppressed,” Omarova writes.
Not only does Omarova have allies in the Biden White House, but also at the Fed itself. Lael Brainard, the Left’s favorite to replace Jerome Powell as chair of the Federal Reserve Board, has led an initiative to explore the Fed’s ability to implement a CBDC. Brainard believes that CBDCs can “increase financial inclusion” by helping those without bank accounts deposit directly with the Fed. But the opposite is true, even if you believe that the Fed’s intentions are wholly benign.