The Fed in its paper reveals the preparation for the delivery of a digital currency for every American.
Let’s take a look at what the Fed is up to.
Money is not where it is needed
There are many things behind the decision to rework the Fed’s monetary policy and develop the digital currency. The pandemic, the Fed’s inability to reach the inflation target, as well as a high unemployment rate. The Fed is trying to fix what it has caused and is making the situation even worse.
The Fed recently confirmed that stimulus packages have not helped, and the blame for it goes to the Fed’s creation of excess reserves, which end up with commercial banks and not consumers. Although the economy needed massive liquidity, it did not end up where it was supposed to. So how do you get the money where it is needed?
Could digital currency be the solution?
The experience with the pandemic has accelerated the development of digital currency everywhere around the globe. However there is a catch. It is the fact that not only the Fed will be able to track every bill, but that at the same time, it would be able to destroy the money if necessary.
Tracking? Not a problem
Sounds a bit like a form of surveillance, doesn’t it? It probably will be. Governments are trying to regulate cryptocurrencies and, on the other hand, are introducing digital currencies that try to be similar, but with the difference that they can be traced anywhere. Cryptocurrency transactions are transparent, but they do not lead you directly to the person holding them. Digital currency can be also a control tool.
The central financial system is broken and needs compensation, but the CBDC can only be a tool and another step towards absolute control of the people. People rightly fear what may come with the digital currency.
The pandemic has shown us many bad sides of the economy. There is a lot that needs to be fixed and some things are not going in the right direction. People were more prone to cryptocurrencies during the pandemic. The pursuit of CBDC is only a cheap substitute for a world where we can be free.