1st June 2023 > > A call to arms.

tl;dr

A call to arms – please read and take action if you can spare the time.

Market Snap

Market Wrap

Despite a brief visit to the upper end of recent prices BTC is back within the $26k-$27k trading range, which is a disappointment to all of us. Where did the vol go?

Curious Cryptos’ Commentary – UK CBDC (Central Bank Digital Currency)

I am going to ask a favour of all of you.

But first let’s quickly recap some of the key points about CBDCs in case one or two of you have not been paying enough attention.

CBDCs are an invasion of our financial privacy.

Government agencies – starting with HMRC but certainly not ending there – will demand access not only to records of our income but also our expenditure.

The government of the day, regardless of its political affiliations, will be able to restrict your legal use of your own money. Forget about a sugar tax, your CBCD linked bank account will be able to stop you buying too many cakes in a week. Your CBDC linked bank account will restrict how often you go to the pub, or a restaurant. Your CBDC linked bank account will stop you buying legal pornography or gambling more than a certain amount. You won’t be able to buy cigarettes.

You may agree with one or more of these restrictions in their singularity, and I have sympathy with you about some of those restrictions. But you will not agree with all the restrictions that the government will place on you and how you spend your hard-earned cash, at which point you will rue the day that the UK introduced a sterling CBDC.

But it gets worse.

Spending too much on your heating bills obstructing the ridiculous policy of net-zero by next Thursday afternoon? Your CBDC linked bank account tells your energy provider that you can use no more gas this week.

Driving too often? Simple to solve – your CBDC linked bank account won’t pay the congestion charge. More fool you for not monitoring your miles.

What happens to commercial and retail banks? The fractionalised banking system is a key part of the technological progress and innovation enabled by capitalism. Take that away and life will change over ever so slowly in the future. New companies won’t be given the opportunity to grow and develop, and established companies, with no new competition, will ossify and begin to resemble their bureaucratic and technocratic masters.

Some may recall that the Cypriot government stole 6.75% of all bank account deposits less than EUR 100k and 9.9% of all bank account deposits in March 2013. Even Robert Peston, BBC Business Editor at the time, was shocked by this action which was forced upon Cyprus as part of an EU and IMF bailout following the GFC.

With CBDCs, such events will become commonplace. No need to debate the merits or otherwise of the wealth tax heading our way on all our assets after the next general election, just take the money at will.

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Not convinced?

The most enthusiastic adopters of CBDCs are those bastions of democracy and free speech, China, and Russia.

Convicted Criminal Christine Lagarde, head of the ECB, is vocal about her support for a Euro CBDC. If you wish the UK to return to the EU fold, which is a perfectly legitimate stance to take and will involve adopting the Euro as our domestic currency, just remember that Lagarde will have personal control over your finances.

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CBDCs will turbo-charge the adoption of cryptos as individuals and businesses seek freedom from government coercion and control. And this is a good thing.

But the UK does not need to go down that path. The US and Switzerland are leading the way in decrying this stampede towards personal financial repression. We must do the same.

So I ask you, please describe your thoughts about a “digital pound” on this little advertised government sponsored survey about a sterling CBDC:

https://www.bankofengland.co.uk/paper/2023/the-digital-pound-consultation-paper