Cryptocurrencies

The Fed is brooding a Digital Dollar and the IMF a “New Bretton Woods” – Cryptocurrencies

For the fourth time since the start of the year, the Fed Governor referred to the Digital Dollar: “If we decide to launch an international digital dollar, the most important thing is not to rush it rather than be the first” Jerome Powell said earlier this week. Words to be compared to those of the IMF, which is very interested in the CBDCs and even touches on the idea of ​​a new Bretton Woods …


CBDC (Central Bank Digital Currency)

“We believe it’s more important to do it right than to be the first to do it. And doing it right means carefully considering the benefits but also the risks associated with CBDC ”

Powell at a roundtable hosted by the International Monetary Fund (IMF)

FED, BIS, IMF, Powell, Carstens

Among these potential risks, Powell spoke notably of cyber attacks, counterfeiting, the impact on monetary policy, the preservation of privacy, etc.

As we recently reported to you here, Powell recalled that the FED of Boston is currently working on a hypothetical Digital Dollar in collaboration with the MIT (Massachusetts Institute of Technology). The creation of this CBDC remains “hypothetical” because the United States is actually rather on the defensive, waiting to see what China will come out of its hat …

The Middle Kingdom has publicly declared that it wants to launch a CBDC to reduce its reliance on the global dollar payments system. A dual system consisting of one part of the network SWIFT which infuses all international bank transfers. And on the other hand, the petrodollar which prevents China from buying oil in its own currency. We will come back to that.

It is difficult to see why the United States would absolutely want to launch a CBDC given that the dollar is already the international currency par excellence. It is however easy to understand why Iran has been armed to the teeth for many years. Indeed, when the euro zone obtained the ability to pay for Iraqi oil in euros, the United States destroyed the country (making it seem like it was a question of finding weapons of mass destruction …). The Europeans were able to prevent Iraq from disconnecting from the SWIFT network (which is based in Brussels) but remained powerless in the face of the deployment of the US military …

The IMF’s “New Bretton Woods Moment”

The institution born at Bretton Woods takes a keen interest in these CBDCs that challenge the hegemony of the dollar. The new president of the IMF, Kristalina Georgieva, teased a new Bretton Woods during his speech to the IMF’s annual meeting plenary.

Speech A New Bretton Woods Moment in full (13 min) HERE

As a reminder, the Bretton Woods conference (1944) established the Gold Standard. It was decided that an ounce of gold would be worth $ 35. Any country could then ask the United States to exchange its dollars for gold. This monetary system collapsed in 1971 after demands from European nations melted America’s gold reserves in half. Nixon then decided to suspend the convertibility of the dollar into gold and to replace it immediately with the “Standard Petrodollar”. That is, the obligation for the whole world to buy its oil in dollars. A geopolitical coup orchestrated by Kissinger by taking Saudi Arabia hostage …

bretton woods
Bretton Woods Conference

The boss of the IMF compared the second world war with the crisis Covid and the ensuing economic collapse (due to containment). The Covid no longer has a back but an aircraft carrier landing strip …

We also learn that the public debt of advanced countries will jump this year to 125% of GDP, that of developing countries to 65% and that of poor countries to 50%. Overall, global GDP will have declined by 4.4% in 2020. By the way, this is about the same order of magnitude as the reduction in global CO2 emissions, proof that growth is perfectly correlated with consumption. fossil fuels. Let’s move on ..

Great debt reset? Jubilee?

Among the interesting statements, note that Kristalina Georgieva pleads for a debt restructuring very soon. Understand by ” restructuring “, The cancellation of part of the debts. What many people now claim that central banks own a good deal of it. Needless to say, this will make it easier to increase the money supply and therefore inflation. A good omen for Bitcoin …

Another interesting point in the midst of this technocratic soup: “use the internet to increase financial inclusion “. This expression is very fashionable lately on the side of many central banks and in particular that turkey. It is also the cornerstone of the Alliance discourse ” Better than Cash Alliance »Created by the foundation Bill & Mellinda Gates (juicy article here)… Its goal is to promote the end of cash and encourage hundreds of millions of peasants in developing countries to open bank accounts, the first step towards their debt and their enslavement… Hundreds of thousands Indian farmers have already been forced to sell their land (to Monsanto) after being washed away by crazy interest rates …

Elon Musk’s desire to launch thousands of internet satellites makes perfect sense here. So is the IMF’s intention to multiply its loans to the world by ten (1.1 trillion in all) and its growing interest in the CBDC. The pieces of the puzzle are starting to fall into place …

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Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.

What does the IMF say about CBDCs?

Two IMF pundits, Tobias Adrian and Tommaso Mancini-Griffoli, declared in late September that a CBDC ” synthetic A collaborative effort between the public and private sectors is a better option than a CBDC controlled only by central banks. Understand here a mix of Digital Dollar and Libra (Facebook) …

The two sidekicks argue in favor of private stablecoins. According to them, one of the “risks” (or hope …) would be that the currencies of certain (weak) countries would be threatened:

“In countries with high inflation and weak institutions, national currencies may be abandoned in favor of stablecoins backed by foreign currencies [dollar par exemple…]. This would constitute a new form of “dollarization” and could jeopardize the monetary policy and economic growth of these countries. “

Tobias Adrian and Tommaso Mancini-Griffoli

A more recent IMF report, released on Monday, confirms these “concerns” by arguing that “ CBDCs could cross borders and replace national currencies in their own economies “…

Currency wars

Now that we’ve said all that, let’s put it in context of a titanic geopolitical clash between the China / Russia pairs on one side and the US / Europe on the other. It is a fact that the Western world still controls the international monetary system. The dollar and the euro together represent 80% of the foreign exchange reserves of central banks around the world:

This is not really to the liking of China, which wants to internationalize its currency and in particular be able to buy Iranian oil in yuan. A “privilege” denied to the Middle Kingdom by disconnecting the Persians from the international payment network SWIFT. Hence the launch of the Chinese CBDC which is actually more of an international payments system than a new currency, let alone a “cryptocurrency”. No CBDC is a cryptocurrency, let’s be clear about that.

China intends to introduce the Chinese yuan along the new Silk Roads, willingly or by force. With this in mind, and in order to bypass any disconnection from the SWIFT network, the Chinese CBDC has the particularity of being able to communicate from phone to phone, without the internet.

“Financial inclusion…”

On the western side, the aspirations are probably similar with a view to conquering new lands. Here is what another IMF spawner said earlier this year:

“In some countries, the cost of managing cash can be very high due to geography, and access to the payment system may not be available to the unbanked, rural or poor population.”

Tao Zhang, Deputy Managing Director IMF

We come back to the project Starlink of SpaceX which intends to put 12,000 satellites in orbit by 2025 and 42,000 in all if authorized. Enough to sweep the most remote areas to extend the hold of the Bankers in every corner of the planet.

The IMF director also referred to the increase in “financial inclusion” (again that expression):

The CBDC can provide a public digital payment method without requiring individuals to hold a bank account “, He added.

Given that it is hard to imagine Tanzania or Zimbabwe launching a CBDC … we can conclude that the plan is indeed to let foreign banks come and debt citizens of poor countries all over the world. And while we’re at it, why not the IMF and its 1000 billion …

We can tell that the CBDC is fueling planetary ambitions on both sides of the Chinese wall. However, there will be no “New Bretton Woods” but a merciless war for the control of payment systems.

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Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.

Let’s conclude by recalling that all of these CBDCs do not overshadow Bitcoin in any way. No CBDC can substitute for its absolutely fixed money supply of 21 million units, nor its immense decentralization to 145 Terahashes per second. The increase in the global money supply, CBDC or not, will be a tremendous driver for Bitcoin.

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