The Federal Reserve Bank of New York has just launched a “digital dollar” cryptocurrency initiative just days after the FTX crypto scam was exposed.
FTX co-founder and CEO Sam Bankman-Fried has admitted that his crypto company served as the Ukrainian government’s laundromat that has benefitted U.S. Democrats and powerful global elites.
After Democratic Party politicians, including President Joe Biden, pushed for billions of dollars in taxpayer money to be sent to Ukraine, the funds were laundered through the FTX cryptocurrency exchange and funneled back into the 2022 midterm elections campaigns of Democrat candidates and the pockets of powerful elites.
The scandal has plunged the cryptocurrency sector into chaos.
Nevertheless, the Fed is pushing forward with its plans to eradicate cash and replace physical money with a “digital dollar.”
According to a press release from the Federal Reserve Bank of New York, the digital dollar simulation, which is slated to last for 12 weeks, will “experiment with the concept of a regulated liability network,” a concept for a financial market infrastructure that would facilitate “digital asset transactions that connect deposits held at regulated financial institutions using distributed ledger technology.”
Analysts will test the “feasibility of payments between financial institutions” using tokenized assets.
Among other financial institutions, Citi, Mastercard, BNY Mellon, and Wells Fargo will partake in the simulation, which will determine whether the project is feasible for broader rollout and lead to technical design insights.
The simulation comes as policymakers weigh the merit of a central bank digital currency, which would preserve the international role of the dollar while mitigating pitfalls intrinsic to cryptocurrencies, such as liquidity risk and credit risk, according to a paper from the Federal Reserve.
A digital dollar could be privacy-protected, intermediated through digital wallets offered by the private sector, and transferable between customers of different intermediaries. Identity verification from banks would also discourage money laundering.
Federal Reserve Chair Jerome Powell said last summer that his “mind is open” to a digital dollar.
He noted that he was “legitimately undecided” on whether the “benefits outweigh the costs” of central bank digital currencies.
“We would want very broad support in society and in Congress,” he told lawmakers.
“It’s a very, very important initiative, and I do think we should ideally get authorization.”
The central bank is also testing an instant payment service designed to remove merchants’ need to wait for one to three days before payments are finished depositing.
It would also eliminate the need for workers to wait days before receiving paychecks.
Retailers currently pay an average interchange fee of $0.23 when consumers use debit cards, according to data from the Federal Reserve, which the new platform could significantly undercut.
The digital dollar test occurs days after cryptocurrency company FTX suddenly declared bankruptcy following a liquidity crisis, leading to instability among other exchange platforms.
Sam Bankman-Fried, the company’s founder and CEO, had allegedly used his trading firm, Alameda Research, to make investments using FTX clients’ funds, while executives underestimated the amount FTX needed to keep in reserves should customers want to remove their funds.
The implosion of FTX has prompted officials to renew calls for regulations upon the cryptocurrency sector.
Sen. Elizabeth Warren (D-MA) labeled the phenomenon a “wake-up call for Congress and financial regulators to hold this industry and its executives accountable.”
Joseph Bankman, the father of Sam Bankman-Fried and a law professor at Stanford University, has helped Warren draft financial regulations.
“Too much of the crypto industry is smoke and mirrors,” Warren contended.
“It’s time for stronger rules and stronger enforcement to protect ordinary people.”
Bankman-Fried, however, was among the largest campaign contributors during the most recent midterm election cycle, spending $39 million during the recent midterm elections primarily to benefit Democratic candidates, according to data from Open Secrets.
It’s not just banks in the U.S. that are pushing for a switch to digital cash, however.
A video recently emerged of one of the world’s most powerful bankers boasting about plans to eliminate cash and gain “absolute control” over the global population through the use of digital money.
The video features Agustin Carstens, the General Manager of the Bank of International Settlements (BIS) and a World Economic Forum (WEF) member, discussing the “advantages” of a cashless society.
Carstens, who previously served as the Deputy Managing Director of the International Monetary Fund, issues a disturbing message about the future of the financial surveillance state and central banks’ plans to gain “absolute control” of everyone’s money.
Carstens boasts that by getting rid of cash and using CBDCs, governments and their financial oligarchs will be able to track purchases globally and see exactly who’s buying what.
They’ll also be able to fulfill their longtime goal of having “absolute control” over financial transactions, he adds.
“We don’t know who’s using a $100 bill today and we don’t know who’s using a 1,000 peso bill today,” the Mexican moneyman said, bemoaning the anonymity of cash.
“The key difference with the CBDC is the central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability,” Carstens said.
“And also we will have the technology to enforce that,” he added.