12th July 2023 > > Brazil's CBDC.

tl;dr

Brazil’s test CBDC gives us an insight into their plans, and it’s not good news.

Market Snap

Market Wrap

BTC limbering up for another assault at $31k, a level above which we cannot seem to hold ground. Leveraged shorts will be getting very nervous if we can approach $32k with the potential for a cascade of liquidations likely propelling us to $35k.

Occasional Series – BBC

Apparently, we are not allowed to know the identity of the alleged procurer of sexual photos and videos from an under-18-year-old.

In entirely unrelated news, the BBC reports that Huw Edwards is the only one of last year’s six highest earners to receive a pay rise.

Occasional Series – Jeremy Hunt

State spending in the UK is set to reach 47% of GDP this year

Communist Soviet Union? 70%.

There are no policies or plans in place to reduce ever-growing public sector expenditure in the UK. There are predictions that by the end of 2024 government spending will be higher than private spending, and within grasping distance of many state-controlled countries.

…

Personally, I find this to be a scary prospect, but I understand you may feel differently.

This is the pain wrought upon us by a Conservative government. Maybe you support its heavy-handed approach to tax and regulation, which you are entitled to do, but I remain unconvinced this strategy will work out for the best.

I fear that when the governing party changes next year, there is a high probability of even more of the same. I fervently hope that will not be the case.

However, wealth taxes are a given, further eroding productivity, driving investment dollars away from the UK, embedding fiscal incontinence, and locking us into an eternal cycle of doom, gloom, and dismay.

Which might be your bag, but it aint mine.

…

Compounding this problem, Jeremy Hunt, Chancellor of the Exchequer, has invented a bureaucratic minefield of pension reforms which his Treasury mandarins say will make everyone who retires four or more decades from now £1,000 better off per annum.

It won’t, simply because forecasts like this over that length of time frame have zero credibility, much like their author. What it will do is increase the headcount of the Civil Service, whose gold-plated pensions schemes us mere mortals can merely dream of. The personal benefits accruing to these additional pen-pushers – whilst crowding out productive jobs and simultaneously draining tax dollars – are clear for all of us to see.

It becomes easier by the day to mispronounce his surname.

Curious Cryptos’ Commentary – Brazil’s CBDC

The code for Brazil’s test CBDC (Central Bank Digital Currency) has been posted here:

https://github.com/bacen/pilotord-kit-onboarding

Pedro Magalhães, developer and computer programmer, has identified these functions within the code:

Vini Barbosa, who has been analysing Pedro’s work, claims that “These functions can be performed by any entity authorized by the Central Bank through another function (also present in the source code), called *Access Control*.”

If you look through the list of actions that can be forced upon users of Brazil’s CBDC, I know you will agree with me that this is scary stuff indeed.

The Brazilian government is retaining the ability to do as it pleases with individuals’ holdings of its CBDC. I would be mightily surprised if this is an isolated incident amongst all the countries developing their own version, but perhaps I am wrong.

The usual justification for CBDCs is based around speeding up transaction times. If that was the case, most of the functionality above would not be needed. The only purpose of this spurious additional functionality is to furnish the government with a tool for coercion and control.

And you thought Black Mirror has a monopoly on dystopia.