During the COVID-19 pandemic, it became clear to the world that Canada was at the leading edge of the globalist agenda for the world as the nation's response, particularly to the February 2022 Truckers' Protest, was among the most freedom crushing in the world, thanks largely to the Trudeau government's lockdown of Canadians' bank accounts. Research that recently appeared on the Bank of Canada's website suggests that the nation's move toward a central bank digital currency (CBDC) is more or less a certainty, a development that should cause concern among Canadians that still embrace freedom.
The research paper entitled "The Role of Public Money in the Digital Age" by Bank of Canada researchers Francisco Rivadeneyra, Scott Hendry and Alejandro García:
...poses the argument that the increasing use of digital payments and the rise in cryptocurrencies accompanied by the decreasing use of cash is the perfect reason why Canada's central bank will need to impose a CBDC. While the Bank of Canada claims that this paper does not express its own views, I would respectfully suggest that it is highly unlikely that a research paper that expresses a strong negative viewpoint of central bank digital currencies would appear on the Bank's website. It might also be important to note that this is the 24th research paper on CBDCs to appear on the Bank's website.
Let's look at two definitions to help put this development into perspective. There are two main types of CBDCs with specific purposes:
1.) Wholesale CBDCs - these would be developed and rolled out to exclusively serve financial institutions to facilitate large-value and interbank settlement and liquidity management.
2.) Retail CBDCs - these would be developed and rolled out to serve the general public.
What is particularly concerning about this recent paper is that the authors of the report propose that a retail CBDC will need to be implemented, a step well beyond many central banks that are currently focussing on entering the digital currency ecosystem through the use of wholesale CBDCs.
The authors claim that the Canadian monetary system functions relatively well today due to the following factors:
1.) having the Canadian dollar as the unit of account
2.) limited use of alternative units of account
3.) an efficient settlement of payments
4.) an exchange of different forms of money at par (cash and bank deposits)
5.) a relatively stable rate of inflation
The authors claim that over the long term, there are three interrelated and overlapping trends that pose risks to the monetary system:
1.) the overall digitalization of the economy and financial system is increasing demand for digital payments.
2.) due to the first trend and other conditions, use of cash has been declining at the point of sale for many years.
3.) the emergence and proliferation of private cryptocurrencies and digital assets, including foreign CBDCs.
These trends pose risks to the monetary system through three mechanisms:
1.) increased potential that fragmentation of the monetary system could create inefficiencies
2.) increased ability of issuers of private forms of money to exert market power
3.) increased difficulty implementing timely and adequate regulation due to the rapid pace of change
They claim that these risks could lead to a loss of the uniformity of money, adoption of alternative units of account and the ever present threat that some segments of the population could be excluded from the monetary system (as though central bankers ever cared about the unwashed serf class).
Since the authors claim that cash is likely to continue to decline in relevance to the point where it many no longer be viable as a method of payment, the Bank of Canada could step in with a retail CBDC to help fill the gap and maintain the relevance of public money in the economy by fulfilling the role of cash. (i.e. being equivalent to cash).
The authors state that because bank customers demand and expect that cash will be available when they request it, financial institutions make cash available through ABMs or in their branches. That said, Canada's Bank Act does not have regulations that require banks to make good on their demand deposits in cash (for example just try going to your bank and withdrawing several thousand dollars should you happen to have that much in your bank account). Banks only supply cash because their customers demand it. The authors postulate that it is possible that a bank could choose not to make cash available to its customers which would mean that the customers of that bank could choose to move their deposits to institutions that still offer cash which could result in a risk to the solvency of the non-cash offering bank. This situation could become even worse if banks colluded on a strategy to all become cashless at which point customers would have little option, a scenario that is not out of the realm of possibility given that Canadian banks are not required by law to redeem deposits in cash as I noted above. Should a scenario like this take place, banks could avail themselves of the opportunity to massively increase user fees for those who have the temerity to demand cash as well as those who use digital forms of payments (i.e. credit and debit card transactions).
Not only are the authors concerned about the disappearance of cash and the decline in its use, they are concerned about the growing use of crypto assets and stablecoins which are currently widely considered to be investment vehicles rather than a useful means of payment. With Big Tech companies considering the process of creating money, there is a greater chance that the monetary system could become increasingly fragmented.
As a solution to this "monetary nightmare" envisaged by the Bank of Canada, the actors suggest that the issuance of a CBDC to complement the role played in public money by cash would be the best alternative. Here's a quote from the conclusion of the paper with my bold:
"In a future where cash is less relevant and is no longer a competitive payment alternative to private money, issues could arise in the uniformity of the Canadian dollar in its many different forms or with the exertion of excessive market power by private money providers. Similar thinking about the role of public money in the monetary system is also emerging in other advanced economies.
Given this role of retail public money, it is likely that a digital form of cash, a CBDC, will be needed in order to maintain the status quo. Cash and a CBDC could continue to support:
1.) the Canadian dollar unit of account
2.) the uniformity of money
3.) monetary and regulatory sovereignty
4.) the overall confidence in the stability of the financial and monetary systems
A retail CBDC with qualities like those of cash would be able to work with other components of the monetary framework (e.g., financial regulation, deposit insurance) to support a well-functioning monetary system."
By implementing a CBDC, the Bank of Canada could still retain its alleged control over the Canadian economy through the use of its ability to impose monetary policies with the aim of economic stability. Should Canada's private banking sector choose to abandon cash, under a CBDC ecosystem, Canadians could still withdraw their money from digital services by converting it into the Bank of Canada’s digital loonies. They could also exit the private banking system entirely by moving money from their bank accounts into a CBDC "chequing account", just as they can do so now by withdrawing their money in cash.
As I have noted in the past, the spectre of CBDCs should be a cause of great concern for those who want to maintain what little remains of their privacy and their freedom. Given that some central bankers have said the quiet part out loud and announced the potential use of programmable CBDCs to control the spending of individuals and the accompanying fact that the Trudeau government used its powers to lock Canadians out of their bank accounts for supporting an anti-government viewpoint, we should all be very apprehensive that the Bank of Canada's proposal for a retail central bank digital currency is even being considered given that central bankers around the world are not known for their abilities as original thinkers. Nor do they have any interest in our freedom.
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