The Elites Are About to Unleash the Currency Of the Future

The digital currency "space race" is on

As the world continues to embrace the digital monetary age, behind the scenes, a central bank digital currency “space race” has emerged. With over 80% of central banks worldwide jumping on the crypto bandwagon, researching, developing, creating, even implementing central bank digital currencies (CBDCs), we’re approaching the climax of the latest financial cold war, and we’ll eventually find out which state, nation, or empire has achieved digital monetary dominance.

In the U.S., Fed Chairman Jerome Powell had rejected the idea that the U.S. central bank might implement a digital dollar, but since the opposite of what central bankers say usually comes true, this secured FedCoin’s future. Soon after, in a Zoom call, he gave the digital dollar his blessing. Since then, the tech and monetary elites at M.I.T and the Boston Fed have had every reason to crack on with their multi-year Digital Currency Initiative to “support the development of digital currency and blockchain technology” in America.

Meanwhile, in Europe, the ECB has yet to give the digital Euro a “green light” — putting the central bank months behind its competition. The U.K government has launched a task force to investigate digital currency systems codenamed “Britcoin”. And Sweden’s Riksbank has completed its e-krona prototype, announcing, of course, that interest rates will remain at zero on launch.

Out of all the global superpowers, however, the Chinese have the lead. The People’s Bank of China (PBOC) has completed its largest digital currency project yet, coming closer to implementing a digital Yuan or, as PBOC calls it, DC/EP. In their pilot program, the central bank distributedred envelopes”, digital wallets credited with 200 yuan, to 50,000 citizens, and they plan to issue an extra 6.2 million DC/EP during this year’s Dragon Boat Festival — a Chinese holiday to commemorate the famous Chinese scholar Qu Yuan.

As global superpowers have continued to battle it out in the digital monetary arena, however, the Bahamas has become the first country to build and implement a fully functional CBDC. Beating all the major economic powers to the finish line, the Bahamian central bank has introduced the Sand Dollar, enabling consumers and businesses to buy and sell goods and services on any of the Bahamas’ 700 plus islands.

How governments, central banks, and academia worldwide have embraced and welcomed digital monetary technologies shows that CBDCs are the future of money and there’s no turning back. But is this coming monetary “revolution” going to punish the legacy financial order, address the immense deficits, debts, and liabilities everyone owes each other, and solve the enormous wealth inequality in society? Not at all. Since a sound money alternative to the fiat currency system will only disrupt the cheap money status quo, the monetary elites will use the new CBDC paradigm to prop up the existing financial house of cards.

This, however, does not mean global superpowers won’t compete against each other to create the ultimate CBDC. Though the Bahamas has created the Sand Dollar, this will not improve their standing on the world stage. As usual, the Chinese Communist Party and the U.S. imperialists will fight the most influential battle, a monetary conflict that will shape the future of digital currencies, define their rules, standards, and, protocols, and decide which power gains digital monetary dominance.

To understand how this contest will play out, however, we must first unlearn the fantasy that states are states. Instead, it's a plutocratic struggle for power among power-hungry individuals who lust after ever-increasing amounts of wealth and control. If we recognize that we live in a managed plutocracy, not a democracy, we’ll come to realize that this struggle for power — and the resulting conflicts and alliances — between three major actors: the tech elites in Silicon Valley, the banking elites on Wall Street, and the monetary elites at the Fed, will determine the future of western-world money. America’s elites must fight it out within a system of rules and laws without exposing how they constantly exploit them for personal gain.

We know this power struggle will shape western-world CBDCs because a similar scenario has already played out in China. If you know anyone who has recently lived on the mainland, they will have told you it’s near impossible to function without AliPay and WeChat: the two dominant, state-owned “super-apps” that have revolutionized how Chinese citizens live life. “It’s the glue that holds much of my life here together,” fintech expert and China resident, Richard Turrin, says. “There are no limits … You can go from chatting with friends to buying airline tickets to ordering coffee delivery without ever leaving the app.” Since the corporations behind these apps, Alibaba and Tencent, have a monopoly on digital payments in China, you’ll find their platforms in every store, on every website, and on every device. Not having a digital payment wallet means you’ll eventually be living off-grid.

As AliPay and WeChat continue to consume every market in China, western-world powers have started to take notice. Each faction of the American elite has slowly started to realize that building a digital payment monopoly is the key to gaining future monetary power. Whoever creates the most user-friendly payment system will win the majority of American’s hearts — and their money.

If you’ve been plugging into the media matrix recently, you’ll have come across the narrative that China has been stealing increasing amounts of technology from the U.S. Though this used to be true, with Baidu copying Google, Alibaba copying eBay, Weibo copying Twitter, and RenRen copying Facebook, in the past few years, the American elites have fallen behind in the tech race and have engaged in hypocrisy, “borrowing” ever-increasing amounts of technology, infrastructure, and ideas from China.

Facebook has copied private group chats, a feature WeChat created. Google has been testing “mini-apps”, an app that runs inside other apps, which mirror WeChat and AliPay’s “mini-apps” concept. Meanwhile, PayPal and Apple have adopted Chinese fintech’s secret weapon: QRCodes. While the western world views QRCodes as tedious gimmicks, China has used them to add offline support for digital currency payments, allowing non-techy consumers to use paper QRCodes to interface with WeChat and AliPay. If you had thought digital currencies might have created a truly cashless society, think again.

Now, you're probably thinking about how the mass adoption of AliPay and WeChat did not cause the collapse of China’s legacy banking system. Though the digital payment revolution destroyed roughly 400 billion RMB of China’s legacy bank’s revenue, this did not cause a crisis or a bank run. As it turns out, Chinese citizens still trust legacy banks over tech companies to store their capital — which is probably the same in America.

But like how the U.S. megabanks, regulators, and rating agencies are in cahoots with monetary elites at the Federal Reserve, the Chinese megabanks have fought back against AliPay and WeChat by getting Chinese state-owned regulators to “regulate” mobile payment companies. AliPay and WeChat had stored customer deposits in money market funds that generated clients extra income each year, but regulators eliminated this income stream by forcing digital payment companies to hold client money at the central bank instead. Though this helped “protect client funds”, it also allowed China’s banking elites to maintain financial dominance and to compete with the big Chinese tech firms.

This gives us a glimpse into the shitstorm that will unfold once the western elite wakes up and starts to pursue power through digital payment means. If we take what’s happened in China and apply it to the U.S., Silicon Valley will provide the technology stack and payment systems behind the digital monetary standard, the Fed will provide the regulatory framework, and the megabanks will survive by lobbying for more regulation against big tech players who have developed superior monetary systems. The Fed will also jump on board by creating an app, maybe with the help of Silicon Valley, that will enable them to implement MMT-style monetary policies. Citizens, for example, simply download the “FedCoin app” and get “free money”.

While all this happens, the crypto alliance will continue to recruit new members who will embrace decentralized finance (DeFi) and other citizen-led monetary movements. Though these have become a popular avenue for people to escape financial repression, the majority will still back the elite’s CBDCs and new-age payment systems, not those based on sound money principles. Even with many economists, crypto nuts, and gold bugs pointing out the seriously flawed state of the global monetary system, the majority has yet to “wake up”, and, based on history, this won’t change anytime soon. It’s unfortunate but true. Most people accept money can be made up, twisted, and manipulated to whatever form without a solid backing while the elites maintain confidence in a — broken — monetary system.

To crypto advocates’ further dismay, the first CBDCs will likely abandon the blockchain altogether and will act as an update to the legacy financial system. We’re simply too early in the digital currency era for the U.S. Dollar system to disappear or for anyone to challenge its hegemony. It’s impossible for another fiat currency to take over — let alone a digital one — because too much infrastructure exists to break loose from the Greenback’s power.

Since America controls all onshore systems that enable corporations and countries to participate in global trade, a competitor must invent new-age versions of complex financial systems such as the bond market, futures market, and repo market, then replace hedging, settlements, auctions, and clearinghouses. And we must also remember most of today’s global trade is not executed within the boundaries of the U.S. financial system but in the shadow banking layer. Systems inside this layer, such as the Eurodollar system, are modern, digital, and ledger-based, but they still can’t communicate with new-age monetary technologies such as CBDCs.

Since the financial elites — the megabanks, hedge funds, and pension funds — dominate this shadow banking layer, the tech elites — Silicon Valley — have the ability to create superior technology, and the monetary elites — the Federal Reserve — hold the monopoly on monetary standards, this will create an interesting future dynamic. What we’ve seen in China is about to make its way to America and the rest of the western world, only the cultural and structural differences between the two superpowers will create a different system in the west.

If we unlearn the simplistic worldview that governments, central banks, and megacorporations are trying to change the world “for the better” and instead understand it always has been a constant struggle between power-hungry individuals to achieve increased power, wealth, and control, we’ll recognize the coming digital currency conflict will be the real driving force behind the structures and functions of CBDCs. It’s about how these digital currencies serve the interests of each type of elite, not just on a regional scale, but global, as each nation’s CBDC will eventually have to interface with each other — with efforts to achieve this already underway.

Right now, if we're honest, we don’t know what any of this means for the future of money, but we do know that whoever wins the digital money “space race”, whether that’s Silicon Valley’s TechCoin, America’s FedCoin, China’s DC/EP, or, by some miracle, Satoshi’s Bitcoin, the coming digital currency war will be epic, and it’s only just begun.