What Banks Have Planned For Us With CBDC
Global Banking System Preparing For The CBDC
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What Banks Have Planned For Us With CBDC
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FULL VIDEO TRANSCRIPT
00:01
cryptocurrency’s continued adoption has
00:03
turned up the heat on governments around
00:05
the world
00:06
their reckless money printing has only
00:08
added fuel to the fire and now they’re
00:11
rushing to develop their central bank
00:13
digital currencies before it’s too late
00:16
today i’m going to explore a recent
00:18
report which reveals what features
00:20
cbdc’s will have how governments plan on
00:23
rolling them out and what implications
00:26
this could have for cryptocurrency
00:32
[Music]
00:35
now i hate to make you wait but i need
00:37
to set the record straight
00:39
financial advice is great but you won’t
00:41
find any here mate
00:43
this video is only meant to entertain
00:46
and educate
00:47
if this is the first time you hear my
00:49
dank rhymes my name is guy and this
00:51
channel is where fiat comes to die
00:54
that’s because the coin bureau contains
00:56
the highest quality content about crypto
00:58
which is fiat’s archenemy if you didn’t
01:00
already know
01:02
coins tokens news reviews exchanges
01:05
tutorials and regulations are just a few
01:07
of the languages i speak
01:09
if this is the kind of knowledge you
01:11
seek subscribe to the channel and ping
01:13
that notification bell to build your
01:15
financial physique
01:17
i value your time which is why i’ve left
01:19
timestamps below that you can use to
01:21
skip ahead to any interesting topics you
01:23
find
01:24
if you watch until the end though that
01:26
would be mighty fine
01:28
so that’s all you need to know about me
01:30
so let’s dig in to some cbdc’s
01:34
the report i’ll be discussing today was
01:36
put together by the bank of
01:38
international settlements now for those
01:40
unfamiliar the bank of international
01:42
settlements or bis is the quote bank for
01:46
central banks and its primary role is to
01:48
facilitate coordination between central
01:51
banks around the world
01:53
over the last few years the bis has been
01:55
hammering out a template for central
01:57
bank digital currencies
01:59
and if the name didn’t give it away well
02:01
central bank digital currencies or
02:03
cbdc’s are digital currencies issued by
02:06
their respective central banks duh
02:10
note that cbdc’s are not crypto
02:13
currencies by any stretch of the
02:15
definition
02:16
this is because cbdc’s are centralized
02:19
permissioned and offer next to no
02:22
privacy
02:23
cbdcs are completely controlled by
02:26
central banks and the governments they
02:28
are beholden to
02:29
almost every central bank is working on
02:32
a cbdc of its own and seven of these
02:34
central banks have been actively helping
02:36
the bis hammer out a cbdc template
02:40
these are the united states federal
02:42
reserve the european central bank the
02:45
bank of england the bank of japan the
02:47
swiss national bank the bank of canada
02:50
and the swedish central bank
02:52
back in october 2020 these seven central
02:55
banks and the bis published the first of
02:58
many reports about what cbdc’s will look
03:01
like
03:02
the second cbdc report came out on
03:05
september the 30th and that’s the one
03:07
i’ll be covering today
03:09
this report contains even more details
03:11
about what cbdc’s will look like and
03:14
it’s divided into three parts
03:16
system design and interoperability
03:19
user needs and adoption and financial
03:22
stability implications
03:24
the authors provided a short six-page
03:27
summary of their three-part cbdc report
03:29
and there are a few interesting points
03:31
in the summary which were seemingly not
03:33
mentioned in the three sections of the
03:35
report
03:36
the very first thing worth pointing out
03:38
is the most important and that’s that
03:40
everything you’re about to hear applies
03:41
to a public or retail cbdc
03:45
now this is a small but insanely
03:47
significant detail because central banks
03:50
governments and select institutions will
03:52
use their own so-called wholesale cbdc’s
03:56
a wholesale cbdc template is also being
03:59
hammered out but one thing is clear as
04:01
day
04:02
regular folks like us will use a
04:04
completely different digital currency to
04:06
the people in power
04:08
let that sink in
04:10
now another concerning detail that can
04:12
be found at the end of the very first
04:14
page of the report summary and that is
04:17
quote cbdc’s would be likely to have
04:19
wide-ranging impacts on public policy
04:22
issues beyond a central bank’s
04:23
traditional remit
04:26
this seems to imply that cbdc’s will be
04:28
used to enforce public policy mandates
04:31
which are not financial in nature
04:34
but wait there’s more quote
04:37
different users and needs would need to
04:39
be defined and addressed in the system’s
04:41
design
04:42
and quote central banks might consider
04:45
measures to influence or control cbdc
04:47
adoption or use this could include
04:50
measures such as access criteria for
04:52
permitted users
04:54
this suggests that even retail cbdcs
04:57
will have different rules for different
04:59
groups of people
05:00
now if you’re starting to feel upset
05:02
don’t worry the bis and these central
05:04
banks know that quote there might be
05:06
some measures that may face obstacles to
05:08
public understanding and acceptance
05:11
i’ll tell you how they plan on helping
05:13
you understand and accept these terms
05:14
and conditions in just a moment
05:17
but first let’s start with how these
05:19
cbdc’s will be designed
05:22
much of how cbdc’s will be designed has
05:25
to do with what roles the current
05:27
financial intermediaries will play in
05:29
such a system
05:31
for starters quote central banks would
05:33
be the only entities entitled to issue
05:35
and redeem a cbdc and would bear the
05:37
ultimate responsibility for the design
05:39
of the cbd system and the operation
05:41
slash oversight of the core ledger
05:45
now although central banks could
05:47
theoretically cut out all existing
05:49
financial intermediaries the report
05:51
stresses the importance of partnering
05:53
with the private sector simply because
05:55
the central bank can’t possibly recreate
05:58
much less maintain the same
06:00
infrastructure on its own
06:02
if it helps here’s an image of what the
06:04
financial system looks like now in most
06:06
countries
06:07
and here’s what a cbdc-based financial
06:10
system would look like according to the
06:11
report
06:13
as you can see the exact role each party
06:15
plays here is not entirely clear but the
06:17
report notes that quote if the central
06:19
bank were to play too operational or
06:21
dominant a role in the ecosystem private
06:24
intermediary participation could be
06:26
curtailed
06:28
given that private financial
06:29
intermediaries are going to be a part of
06:31
the picture this means cbdc’s will need
06:34
to be interoperable not just
06:36
internationally but also domestically
06:38
with their existing infrastructure
06:40
because this will likely cause a lot of
06:43
technical issues the report recommends
06:45
limiting the number of financial
06:47
intermediaries that are allowed to
06:48
operate
06:49
also quote
06:51
approval processes for new
06:53
intermediaries or certain services and
06:55
strong oversight could help mitigate
06:58
technical issues
06:59
meaning the central bank will decide
07:01
exactly which financial intermediaries
07:04
are allowed to operate
07:06
when it comes to privacy quote full
07:08
anonymity is not possible as central
07:10
banks would design cbdc systems to meet
07:13
anti-money laundering and combating the
07:15
financing of terrorism requirements
07:18
thankfully your data will be safe
07:20
because quote the central bank would
07:22
have no commercial interest in end user
07:24
data and may be better placed than a
07:26
commercial entity to commit to a minimal
07:29
use of such data
07:31
what a relief
07:33
now the report also brings up the
07:35
infamous travel rule put in place by the
07:38
fat f which means that every cbdc
07:40
transaction above a certain amount would
07:42
be automatically tracked
07:44
if you don’t know what the fat f is and
07:46
what it’s got planned for crypto in the
07:48
coming weeks be sure to watch my video
07:50
about that using the link up in the top
07:52
right
07:54
i digress
07:55
the next part of the report briefly
07:57
touches on the interoperability
07:59
requirement for cbdc’s and notes that
08:01
quote the essential foundation of
08:04
interoperability would be
08:05
standardization which would allow
08:07
compatibility
08:09
the last thing the report mentions about
08:11
interoperability is quote a cbdc could
08:14
be introduced with an explicit policy
08:17
goal to catalyze a migration of national
08:19
standards to eg an internationally
08:22
promoted standard
08:24
put differently cbdc standards will be
08:27
global
08:28
i for one cannot wait
08:31
this brings me to the moment you’ve all
08:33
been waiting for and that’s the part of
08:35
the bis report that explains how central
08:38
banks and governments can convince us
08:40
plebs to adopt their cbdc’s make sure
08:44
you’ve got enough popcorn
08:46
it starts off by not so subtly admitting
08:48
that the main reason why central banks
08:50
are developing cbdcs is because of
08:52
cryptocurrency adoption
08:55
quote
08:55
without continued innovation and
08:57
competition to drive efficiency in a
08:59
jurisdiction’s payment system users may
09:02
adopt other less safe instruments or
09:04
currencies potentially leading to
09:06
economic and consumer harm
09:08
even though central banks can see the
09:10
writing on the wall the report seems to
09:13
imply that rolling out cbdc’s too
09:15
quickly could do more harm than good
09:18
this is fleshed out more in the third
09:20
part of the report which i’ll get into
09:22
later now ironically the report
09:24
acknowledges that quote technological
09:26
innovation has been transforming the
09:28
markets for retail payments at pace over
09:30
recent years with many new payment
09:32
methods platforms and interfaces
09:35
evolving to become faster cheaper and
09:37
safer
09:38
the logical conclusion of this kind of
09:40
statement would be to allow this kind of
09:42
payment innovation to continue but
09:44
apparently the bis and its banker
09:46
buddies believe this is better done in a
09:49
different way
09:51
now the report then outlines the three
09:53
ways by which cbdc adoption can be
09:55
achieved by fulfilling unmet user needs
09:58
achieving network effects and not
10:01
requiring everyone to buy a new computer
10:03
or phone
10:04
how exactly cbdc’s fulfill unmet user
10:07
needs is detailed a little later on and
10:09
according to the bis the main selling
10:11
points here are security low cost high
10:14
liquidity programmability and privacy
10:19
sorry
10:20
now in terms of achieving network
10:22
effects the report suggests quote cbdc
10:25
design could choose to emphasize
10:27
peer-to-peer functionality in order to
10:29
facilitate adoption this recommendation
10:32
is based on existing research on the
10:34
adoption of digital currencies but i
10:36
don’t think the authors realize that
10:38
they’re not exactly comparing apples
10:40
with apples here
10:42
not requiring everyone to buy a new
10:44
device is pretty self-explanatory though
10:46
it comes with its own set of issues
10:48
related to performance because the most
10:50
widespread technologies are the most
10:52
basic
10:53
as the report goes on it starts to
10:55
detail some more manipulative ways of
10:57
achieving cbdc adoption namely quote
11:00
incentivize consumer use of cbdc by
11:02
disbursing social benefits and transfers
11:04
to individuals in cbdc and quote
11:07
allowing consumers to pay their taxes in
11:09
cbdc may also provide a stable concrete
11:12
example for consumers to use cbdc
11:16
on page 11 the report provides a sort of
11:18
rubric for various cbdc marketing
11:21
campaigns targeting consumers with
11:23
different pain points and needs
11:25
the funny thing is that one of these
11:26
consumer archetypes is a person quote
11:29
who does not want commercial banks to
11:30
know his or her identity or track his or
11:33
her spending
11:35
naturally the best solution to this
11:37
issue is to give all that information
11:39
directly to the central bank instead
11:45
now i reckon the ideal middle ground
11:47
would be to offer both transparency and
11:49
compliant privacy the way secret network
11:51
does and you can learn more about that
11:54
using the link up in the top right
11:57
so this leaves just one part of the bs
12:00
report sorry bis report and that’s the
12:02
financial stability implications of a
12:04
cbdc
12:06
here we see the first mention of
12:08
cryptocurrency when the report notes
12:09
that quote stable coins are only just
12:12
starting to be developed and we’ll need
12:14
to satisfy regulators that they are safe
12:17
well i guess they missed the memo that
12:18
stable coins have been around for years
12:20
and their users know which ones are safe
12:22
and which ones are less safe
12:25
then the report goes on to claim
12:27
something so ridiculous that it pains me
12:29
to even repeat it
12:31
quote
12:32
unlike central banks issuers of stable
12:34
coins are not banned by principles to
12:37
design products that would coexist and
12:39
interoperate with other forms of money
12:41
or to promote ongoing innovation and
12:43
efficiency
12:45
this is categorically false as far as
12:48
i’m concerned
12:49
stable coins like usdt and usdc are
12:52
available on more than a dozen different
12:54
blockchains and it’s in their economic
12:56
interest to be as interoperable as
12:58
possible
12:59
stablecoins are literally leagues ahead
13:02
in interoperability terms of any cbdc
13:05
heck even visa has managed to test usdc
13:08
as part of its own payment
13:10
infrastructure
13:11
and then the truth comes out quote
13:14
significant stablecoin adoption and the
13:16
potential consequent fragmentation could
13:18
result in excessive market power and the
13:20
type of deposit disintermediation
13:22
described as a risk for cbdc issuance
13:26
this officially confirms that
13:28
stablecoins are seen by central banks as
13:31
a risk to the rollout of a central bank
13:33
digital currency they’re also hyper
13:36
aware that quote the actual introduction
13:38
of cbdc’s could be some years away
13:41
in the interim providers of private
13:43
money and tokens are expected to
13:45
continue developing and expanding their
13:47
service offerings
13:48
and because central banks can’t possibly
13:50
catch up the only way they can slow
13:53
stable coins down is through regulation
13:55
which is probably why we’re seeing
13:57
headlines like these all over the place
14:00
though the next part of the report is
14:02
quite technical in nature my
14:03
interpretation is that central banks
14:05
know that cbdc’s can’t compete with
14:08
stable coins because they can’t offer
14:10
the same yields on savings you find in
14:12
d5
14:13
as i mentioned in my video about
14:15
fidelity’s views on cryptocurrency
14:17
yields are something that wealthy
14:19
investors and institutional investors
14:21
crave and their influence could just
14:24
protect stable coins from harsh
14:26
regulations
14:28
page eight of the third leg of the bis
14:30
report is where things get really
14:32
interesting
14:34
besides the fact that the projected
14:36
adoption of cbdc’s in g20 countries is
14:39
between four and twelve percent cbdc’s
14:41
could pose a huge threat to the
14:43
financial system via the banks
14:46
to understand why we must go back in
14:49
time
14:50
when the stock market started crashing
14:51
in the lead up to the great depression
14:53
people scrambled to withdraw all their
14:55
money from their bank accounts only to
14:57
find that their banks didn’t have their
14:59
money because it had all been lent out
15:02
these bank runs caused the banking
15:03
sector to collapse and this is what
15:05
ultimately caused the great depression
15:08
the fdic was created shortly afterwards
15:11
to make sure that banks always had
15:12
enough cash on hand to make sure bank
15:15
runs could never happen again
15:17
however the bis report highlights the
15:20
fact that a cbdc would be seen as a safe
15:22
haven by many investors during a time of
15:25
crisis meaning they would move their
15:27
money out of the banking system and into
15:29
the central bank
15:31
this would lead to a collapse of the
15:33
banking system like it did a hundred
15:35
years ago
15:36
now even if this collapse doesn’t happen
15:39
the report admits that in a cbdc system
15:41
quote a common theme is that maintaining
15:44
bank profitability levels could be
15:46
challenging
15:47
the report actually gives a series of
15:49
recommendations for how private banks
15:51
could mitigate the punch to their
15:53
pocketbooks and the potential collapse
15:55
it could cause and they are laughable to
15:58
say the least
15:59
of all the side effects the report says
16:01
a cbdc could have on the banking system
16:04
one of them caught my eye quote
16:07
the introduction of a cbdc by the
16:09
central bank could cause a reduction in
16:11
commercial bank deposits which would
16:13
consequently translate into more
16:15
expensive credit lines
16:17
in plain english cbdc’s could make loans
16:20
more expensive and that means it could
16:21
become next to impossible for the
16:23
average person to buy a house or other
16:25
valuable assets
16:27
say it’s almost like you’ll own nothing
16:30
and be happy
16:32
where have i heard that one before
16:36
anyways the same run on the bank risk
16:39
exists with stable coins and you could
16:41
argue that it’s already begun
16:43
the 120 plus billion in stable coin
16:46
market cap didn’t come from nowhere it
16:49
came from bank balance sheets
16:52
after highlighting these risks and
16:54
others such as cbdc’s potentially
16:56
replacing government bonds as the
16:57
primary safe haven asset among investors
17:00
the report explains how central banks
17:02
can use their omnipotence to prevent
17:05
these scenarios from playing out
17:07
quote
17:08
quantity-based safeguards would restrict
17:10
the use of cbdc through imposing hard
17:13
limits on the transfers and or holdings
17:15
of
17:16
cbdc and quote limits could also be
17:20
applied varyingly for different cbdc
17:22
account holders
17:24
better yet quote such limits could be
17:26
imposed on a permanent basis or on a
17:28
transitional basis
17:30
in other words if the economy starts
17:32
crashing and everyone runs to cbdc’s to
17:35
protect their wealth the central bank
17:37
will prevent them from doing that to
17:39
prevent the crash investors be damned
17:42
now the bis report concludes that quote
17:45
a material shift from bank deposits to
17:47
cbdc if the holdings of cbdc’s by
17:50
individual users were left unconstrained
17:52
could have a non-trivial long-term
17:55
impact on bank lending and
17:56
intermediation
17:58
well where do i sign up
18:02
as terrifying as this bis report is it
18:05
reveals just how difficult it will be to
18:07
roll out such a dystopian system and i
18:10
would argue it’s next to impossible
18:12
this is simply because there’s no way to
18:14
introduce cbdc without eating into the
18:17
bottom line of the banks and financial
18:19
intermediaries
18:20
they would sooner side with crypto than
18:22
let that happen and i have a strange
18:24
feeling that this could be the outcome
18:26
of the introduction of a cbdc
18:29
there is also no way in hell that the
18:32
average person would adopt a cbdc
18:34
without being forced and the moment you
18:36
start to use force to mandate something
18:38
you claim is good it becomes clear that
18:40
it’s well not
18:43
this begs the question of why central
18:45
banks would go through all this trouble
18:47
to create what is likely to be a
18:49
piss-poor payment method
18:51
well i reckon the answer is that this
18:53
isn’t their actual goal and the evidence
18:55
is easily found in the design of what
18:57
they’re building
18:58
cbdc’s are nothing short of a tool for
19:01
total control and every single stated
19:03
benefit and feature only exists to
19:05
entice people into this totalitarian
19:08
scheme
19:09
as the report itself admitted there are
19:11
already numerous financial technologies
19:13
that can do everything cbdc’s can and
19:16
more
19:17
most of these financial technologies
19:19
have come from cryptocurrency and i find
19:21
it odd that the report didn’t mention
19:23
any cryptocurrencies besides stable
19:26
coins
19:26
now on that note it didn’t mention the
19:28
word blockchain either i suppose the bis
19:31
doesn’t want to draw any more attention
19:33
to cryptocurrencies
19:35
it would be a real tragedy of any of the
19:37
governments reading the report got the
19:39
idea of adopting bitcoin like el
19:41
salvador did
19:42
other countries are likely to follow
19:44
suit especially since it’s much easier
19:46
to plug into a financial system that’s
19:48
been proven to be secure and reliable
19:50
rather than build a new one from the
19:52
ground up
19:53
it looks like they won’t have any other
19:56
choice either because fiat currencies
19:58
are losing value and credibility by the
20:00
minute
20:01
this might actually be what the central
20:03
banks want though after all the only way
20:06
they could possibly convince anyone to
20:08
adopt their cbdcs is if their existing
20:10
fiat currencies are worthless
20:13
even then the crash could happen much
20:15
quicker than they anticipated and their
20:17
cbdc’s are far from being ready to fill
20:20
that void
20:21
now it sounds crazy but we could end up
20:24
with a scenario where the only kind of
20:26
money left with any value are select
20:28
cryptocurrencies and china’s digital un
20:32
i think we all know which one the world
20:34
would pick
20:35
that’s just my theory though and i’m
20:37
keen to hear yours so what do you think
20:40
of these cbdc’s
20:42
drop me a comment down below and be sure
20:44
to share this video to make sure your
20:46
friends and family stay in the know
20:48
i’ve got a whole bunch of other videos
20:50
on the go and i also have another
20:52
channel besides the coin bureau
20:54
coin bureau clips is where you can see
20:56
everything that happens here behind the
20:57
scenes you can find me on twitter tiktok
21:00
and instagram too i’ve been verified on
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the first two and if you know how i can
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finally get verified on instagram that
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would be cool
21:08
i even got verified on telegram so
21:11
you’ll be able to join knowing you’re
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not going to be scammed
21:15
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21:25
want to rep the coin bureau brand
21:27
you can find your way to all these
21:29
resources and more using the links just
21:31
below me
21:32
don’t get lost thank you so much if you
21:35
stuck around it’s been a pleasure as
21:37
always i’ll see you again before you
21:39
know it
21:44
[Music]
21:50
you