Last week, the Federal Reserve released a “discussion paper” examing the pros and cons of a potential US central bank digital dollar. According to the Federal Reserve press release, the central bank hopes to get public feedback on the idea.
“We look forward to engaging with the public, elected representatives, and a broad range of stakeholders as we examine the positives and negatives of a central bank digital currency in the United States,” Federal Reserve Chair Jerome H. Powell said.
Digital dollars would be similar to bitcoin and other cryptocurrencies. They would exist as virtual banknotes or coins held in a digital wallet on your computer or smartphone. The difference between a government digital currency and bitcoin is the value of the digital currency is backed and controlled by the state, just like traditional fiat currency.
The digital dollar could ultimately replace physical cash. Proponents tout its convenience and security. A Business Insider article gushed over the idea.
A Fed-backed digital dollar would then provide many of the benefits touted by cryptocurrencies without their wild price swings and usage fees. In theory, a CBDC would meld the best aspects of physical and digital currencies for the average American.”
Last year, China launched a digital yuan pilot program. The Chinese government-backed digital currency got a boost when the country’s biggest online retailer announced the first virtual platform to accept the Chinese digital currency. China isn’t the only government exploring the possibility of digital money. Sweden has developed a digital currency of its own. The European Central Bank is pushing for a digital euro. And Russian central bank governor Elvira Nabiullina told CNBC that digital currency is “the future of our financial system.”
Ultimately, it would take a congressional act to establish a digital dollar as legal tender.
Government digital currency is sold to the public as a safe and convenient alternative to physical cash. We’re also told it will help stop dangerous criminals who like the intractability of cash.
But at the root of the move toward government digital currency is “the war on cash.” Fundamentally, it’s about control.
The elimination of cash creates the potential for the government to track and even control consumer spending, and it would make it even easier for central banks to engage in manipulative monetary policy such as negative interest rates.
Imagine if there was no cash. It would be impossible to hide even the smallest transaction from government eyes. Something as simple as your morning trip to Starbucks wouldn’t be a secret from government officials. As Bloomberg put it in an article published when China launched its digital yuan pilot program, digital currency “offers China’s authorities a degree of control never possible with physical money.”
The government could even “turn off” an individual’s ability to make purchases. Bloomberg describes just how much control a digital currency could give Chinese officials
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“So Christ also,
having been offered
once to bear the sins
of many, will appear
a second time for
salvation without
reference to sin, to those
who eagerly await Him.”
—Hebrews 9:28
“When Christ first came, He came because of humanity’s sin (1 John 3:5). When He appears a second time (the Rapture), He will not atone for sin but complete salvation for His people (Rom. 6:10; 1 Cor. 1:7; Phil. 3:20; Titus 2:13). “
—David Jeremiah
“…and then his visage shall not be marred, but shall be exceedingly glorious. [2.] This will be to the salvation of all who look for him; he will then perfect their holiness, their happiness; their number shall then be accomplished, and their salvation completed. Observe, It is the distinguishing character of true believers that they are looking for Christ; they look to him by faith; they look for him by hope and holy desires. They look for him in every duty, in every ordinance, in every providence now; and they expect his second coming, and are preparing for it; and though it will be sudden destruction to the rest of the world, who scoff at the report of it, it will be eternal salvation to those who look for it.”
—Matthew Henry
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