I think CBDCs will drive most cryptocurrencies and stablecoins out of business. To explain, a CBDC is official currency issued by a central bank. For example, the Digital Yuan is official Chinese currency issued by the People’s Bank of China (PBOC).

Big FinTech and Silicon Valley are using hysterical lies about dystopian technology to sabotage the Federal Reserve’s efforts to modernize America’s financial system.

Social media and podcasts are full of hysterical claims that the Federal Reserve’s new payments platform, the FedNow Service, is a dystopian plot to strip Americans of financial freedom. I think these lies are a deliberate smear campaign to stop financial technology (FinTech) modernization and preserve high profits for large corporations.

Disgustingly, the attacks on FedNow are coming from both sides of the political aisle. Over at Breaking Points (normally a good anti-corporate media outlet) James Li warns us about DYSTOPIAN FedNow Central Payment System Explained.*

A deleted tweet warns about “destruction of the dollar.” I consider this claim nonsense because the US dollar is the basis of the Fed’s power. These people claim the Fed will destroy itself which is loony.

Y Combinator’s Hacker News warns “A dystopian digital currency as CBDC will come after FedNow.” CBDC refers to a Central Bank Digital Bank Currency. To explain, a CBDC is an official cryptocurrency a central bank such as the Federal Reserve issues.*

What is FedNow?

FedNow is the Federal Reserve’s answer to PayPal and Apple Pay, an instant payments platform that connects banks, the Federal Reserve System, and consumers. Technologically, FedNow is not new or revolutionary. Instead, FedNow replicates private services such as PayPal, Apple Pay, Zelle, and Venmo.

I think FedNow threatens big banks, FinTech, and Silicon Valley because it could process instant payments without fees. Hence, companies such as PayPal (PYPL), Apple (AAPL), Visa (V), MasterCard (M), and JPMorgan Chase (JPM) cannot make money off the system.

FedNow threatens these giants because it could replace their payments infrastructure with a public service. To elaborate, today’s financial technology system is a network of private roadways full of tollbooths. Theoretically, FedNow could eliminate the tollbooths and turn the network into a public highway system anybody can drive on for free.

Predictably, the toll road owners want to keep their monopoly. Hence they are trying to kill FedNow in the cradle. Consequently, propagandists are spreading the lie that FedNow is a totalitarian plot against Americans’ freedoms.

The lie usually sounds like this “FedNow is dystopian because it will allow the Uncle Sam to track all of your financial transactions.” These claims are bullshit because the federal government already tracks electronic financial transactions.

The Dystopian World Financial Tracking is Already here

A federal law, the USA Patriot Act of 2001, requires all US banks to follow strict Know Your Customer (KYC) rules. These KYC rules include the Customer Identification Program (CIP) and Customer Due Diligence (CDD).

For example, CIP requires financial institutions to identify all customers. Moreover, the Patriot Act requires financial CDD on all customers and report “any suspicious or unusual activity to federal authorities.”

Consequently, banks have to collect the names, birth dates, and Social Security numbers of many customers and give that data to the Financial Crimes Enforcement Network (FinCEN). FinCen is a federal agency that collects, analyzes, and disseminates intelligence about financial transactions.

Notably, FinCen has been operating since 2016 and it is harvesting your financial data now. Hence, the federal government has been tracking and monitoring your financial transactions for seven years and collecting data about them.

Thus, the dystopian world of transaction tracking the online fear mongers are ranting about is already here. Hypocritically, the self-appointed guardians of financial freedom don’t attack FinCen or demand its abolition. Instead, they just attack FedNow.

Hence, Big Finance does not care about your privacy or your freedom. Banks and FinTech companies are already happily tracking your financial transactions and sharing that data with Uncle Sam.

Cynics will say Big Finance wants to track your financial transactions so they can sell your data. Hence, Big Finance is becoming Big Data which is a far greater threat to your freedom than FedNow.

Remember,voters have some control over FedNow because we elect the President who appoints the Fed’s directors and Congress which approves Fed policy. We have no control over the executives of large corporations such as PayPal (PYPL).

Tracking isn’t the threat Big Finance fears. The threat is competition from a cheaper and more reliable Federal Reserve Payments system. The fear is that PayPal, Apple Pay, Venmo, and Big Banks’ Zell cannot compete with FedNow. Hence, they want to kill it now.

Moreover, Congress could easily write federal regulations that keep companies from harvesting FedNow data. Hence, Big Data has a powerful incentive to kill FedNow.

Wall Street and Silicon Valley want to keep control of financial technology and the payments system. Hence, they want to keep the Federal Reserve out of the FinTech business.

Killing the Competition

One of the worst features of America’s pseudo capitalist economy is the lack of cheaper, more-efficient, and less-risky government alternatives to private businesses.

For example, the United States lacks a system of single-payer or government health insurance for all citizens. Hence, the USA joins such developing nations as China, Syria, Yemen, Afghanistan, Iran, Nigeria, Egypt, and South Africa in the no-health insurance club.*

The USA lacks single-payer because of constant lobbying by the health insurance, healthcare, and pharmaceutical industries. This lobbying includes constant media scare campaigns. For example, hysterical stories of death panels and the demonizing of Canada’s national health insurance system.

Health insurance is just one of many segments where politicians, lobbyists, business interests, intellectuals, and corrupt elements of the media have blocked government alternatives to lucrative enterprises. For example, most American cities lack decent mass transit, the US does not have national TV and radio networks such as the BBC and CBC; the USA has no high-speed rail, America’s public housing efforts are a national disgrace, and there are constant efforts to destroy existing government services such as the Post Office.

Thus, the attacks on FedNow are the latest example of an American tradition. Businesses use hysteria about threats to freedom to kill competition and limit citizens’ choices to protect their bottom line.

The War on CBDCs

It is no mistake that the anti FedNow crusaders also target Central Bank Digital Currencies (CBDCs). Frighteningly, some politicians are on the anti-CBDC bandwagon.

For example, presidential candidate Robert F. Kennedy (R-California?) calls CBDCs and FedNow “the slippery slope to financial slavery and political tyranny.”* Similarly, Governor Ron DeSantis (R-Florida) signed state law SB 7054.

“SB 7054 prohibits the use of a federally adopted central bank digital currency (CBDC) by excluding it from the definition of money within Florida’s Uniform Commercial Code,” a press release states.* I consider SB 7054 a publicity stunt for DeSantis’s presidential campaign. SB 7054 is probably unconstitutional because it claims the state has the power to regulate a federal agency (the Federal Reserve).

Cynics will wonder why presidential candidates are hostile to CBDCs. I suspect Kennedy and DeSantis are seeking big donations from cryptocurrency and stablecoin companies.

How CBDCs threaten Cryptocurrency

I think CBDCs will drive most cryptocurrencies and stablecoins out of business. To explain, a CBDC is official currency issued by a central bank. For example, the Digital Yuan is official Chinese currency issued by the People’s Bank of China (PBOC).

Similarly, a US CBDC will be a genuine US dollar issued by the Federal Reserve. I think nobody but crypto geeks will want stuff like Bitcoin (BTC) and Binance (BNB) if there is an official Digital Dollar.

Moreover, CBDCs will destroy the purpose of stablecoins. A stablecoin is a cryptocurrency that contains a mechanism that pays in fiat currency. For example, Tether (USDT) the most popular stablecoin, makes payment in US dollars held in trust accounts.

A Federal Reserve CBDC could destroy Tether’s $83 billion market capitalization. Tether could become worthless overnight if a Federal Reserve CBDC hits the market. Therefore, a Federal Reserve CBDC drive Tether and its competitors USD Coin (USDC) and Binance USD (BUSD) out of business.

Hence, Tether, Binance, and USD Coin owner Circle have a powerful interest in preventing a Federal Reserve CBDC. Interestingly, they base iFinex Inc., Tether’s owner, in Hong Kong in the People’s Republic of China. Thus, Kennedy and DeSantis want to force US citizens to use a Chinese owned FinTech instrument instead of official US currency.

Moreover, stablecoins can be risky investment. To explain, there is no guarantee a stablecoin operator has the money for transactions. For instance, the TerraUSD (USDT) stablecoin collapsed in May 2022 because its platform ran out of US Dollars. Thus, Kennedy and DeSantis are promoting risky financial instruments that could collapse.*

In contrast, a Federal Reserve CBDC, will be an official US dollar issued by the federal reserve. Hence, it will be less risky. Moreover, retailers, financial institutions, and individuals will be more likely to accept the Federal CBDC because it will be actual dollars.

I cannot imagine Walmart (WMT) accepting USDT or Bitcoin (BTC). Yet I can imagine Walmart (WMT) happily accepting a Federal Reserve CBDC.

CBDC Foes could make US FinTech uncompetitive

I think luddities such as Kennedy and DeSantis threaten America’s competitiveness in the vital industries of finance and FinTech. These greedy fools could even undermine the US dollar’s position as the world’s reserve currency. To explain, the PBOC wants the E-CNY replace the US Dollar and USDT, the E-CNY website boasts.* If there’s no digital dollar, the Digital Yuan could win the currency wars.

To explain, Kennedy and DeSantis and their friends in Congress are trying to block the Federal Reserve’s modest efforts to create a US CBDC. Conversely, central banks in India, the United Kingdom, and China are pushing ahead with CBDC efforts.

For example, government employees can receive their salaries in the People’s Bank of China’s Digital Yuan (E-CNY).* News reports claim Chinese companies can use the CNY to pay their electric bills.

Moreover, foreign Central Banks, including the PBOC and the Bank of England, are organizing efforts to build CBDCs and deploy them internationally through the Bank of International Settlement. Hence, US finance could itself far behind foreign competitors if the anti-CBDC crowd succeeds.

Cynics will say Kennedy and DeSantis are promoting something dangerously close to treason.

The War on the Federal Reserve

Strangely, attacks on FedNow and CBDC revive a destructive controversy that dates to the earliest days of the United States. These attacks are overt hostility to central banks and finance.

Strangely, attacks on FedNow and CBDC revive a destructive controversy that dates to the earliest days of the United States. These attacks are overt hostility to central banks and finance.

Bank opponents led by Thomas Jefferson (R-Virginia) became Republicans. Republicans opposed a central bank because it reminded them of the Bank of England. In 1811, Republicans let the charter for the first Bank of the United States lapse, and the bank went out of business.

However, Republicans soon chartered a second Bank of the United States to pay off the nation’s debts from the disastrous War of 1812. Conversely, the Bank of the United States remained controversial. Many rural Americans and westerners viewed the Bank of the United States as an instrument of oppression controlled by Big City financiers and possibly the Bank of England.

President Andrew Jackson (D-Tennessee)

Moreover, opponents charged the paper currency the Bank of the United States issued was not real money. Instead, only gold and silver coins were money in their eyes.

Strangely, critics raise the same argument against cryptocurrencies, they claim CBDCs are not “real money” because they are digital and not paper. This is bullshit. A CBDC is real money because a central bank issues it. Monopoly money is just paper because Parker Bros prints it.

This nonsense became national policy when Andrew Jackson (D-Tennessee) became president.* Jackson deliberately let the Bank of the United States’ charter expire and pulled federal funds from the institution. Worse, Jackson ordered the federal government to stop accepting banknotes as payment for land purchases. In the 1830s, the federal government raised money by selling frontier land to speculators.

Jackson’s actions hurt the common people whom he supposedly represented. For example, Old Hickory forced ordinary people to accept banknotes issued by private institutions as currency. These banknotes were worthless but ordinary people had to use them.

Destroying the Bank of the United States and fiat currency did not hurt wealthy slave-owning planters such as Andy Jackson. However, it hurt the farmers, workers, and small-business people who voted for Jackson. Cynics said Jackson’s true purpose to boost the Southern Slaveocracy’s wealth and power. For example, wealthy slaveholders had gold to buy frontier land, poor farmers did not.

Jackson’s actions led to a horrendous financial crisis, the Panic of 1837 and a Depression. Destroying the fiat currency made income inequality and regional tensions worse stoking the crisis that led to the Civil War. By the 1850s, many Americans, including Abraham Lincoln (R-Illinois), were complaining about a “slave power” that controlled Congress and the economy. The economy did not stabilize until the Lincoln administration started printing banknotes to pay the Union Army in the Civil War.

Hence, cynics can charge that wealthy modern day populists. such as DeSantis and Kennedy, want to revive the 19th century economy. To explain, they will force ordinary people to use questionable private constructs such as stablecoins and deprive the federal government of revenues with tax cuts. Then make tax evasion easier by making it impossible for federal employees to track rich people’s money. I consider this revival of the 19th century robber baron economy which led to Civil War, the true dystopia.

Thus, the hysteria about dystopian financial technologies is pure hypocrisy. The true agenda is to enhance the bottom line of financial institutions at the expense of ordinary people. Hopefully, voters will see through this scam and the corruption behind it.











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A Federal Reserve CBDC could destroy Tether’s $83 billion market capitalization. Tether could become worthless overnight if a Federal Reserve CBDC hits the market. Therefore, a Federal Reserve CBDC drive Tether and its competitors USD Coin (USDC) and Binance USD (BUSD) out of business.



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