The global race to redefine our money is heating up…
Last month, G20 leaders met in India for their annual summit.
The G20 group is like the major league for the global economy. It’s made up of 19 countries, plus the European Union and the African Union.
And at this year’s summit, there was a shift in the topics discussed. Central bank digital currencies (CBDCs) had more emphasis than ever before.
The U.S. was there, as were other global powerhouses like Germany, Japan, the U.K., and France.
They discussed the blueprint for a fully digital world and the role that digital IDs and CBDCs will play.
They even issued a declaration to “ensure that no one is left behind.”
In other words, the world’s largest and most advanced economies are all getting serious about adopting CBDCs.
For regular readers, this will come as no surprise.
I’ve been sounding the alarm on CBDCs and the impact they will have on our freedom, our savings, and our daily lives.
The G20 Summit brings the reality of CBDCs on a global scale even closer. Let me explain…
“One Family, One Earth, One Future”
That was the ominous theme as G20 leaders convened in New Delhi last month.
I say ominous because it’s hard to see this as anything other than global elites aiming to mold a “one-size-fits-all” future.
Especially when it comes to the global financial system… And establishing a centralized mechanism, digital currency, and expanded e-commerce initiatives.
In that future, many major aspects of our lives could be dictated, coordinated, and exploited on a massive global scale.
And most of all, our financial lives could be up for global inspection. Potentially, so could other elements of our lives, such as our health choices.
Sure enough, digitalization was one of the pivotal topics the G20 leaders deliberated on – alongside climate change, health care, and food security.
At the heart of these discussions was a hefty 70-page document.
It was titled the “G20 Policy Recommendations for Advancing Financial Inclusion and Productivity Gains Through Digital Public Infrastructure.”
The idea of financial inclusion sounds noble until you read the report. Then it becomes clear this “inclusion” could happen by force – whether you like it or not.
The term “financial inclusion” made 263 appearances throughout the document.
Meanwhile, “digital ID” was used 83 times, and “government-to-person payments” (G2P) was used 24 times.
But one acronym echoed through the document more than any others: DPI.
DPI is short for Digital Public Infrastructure. And it was mentioned 441 times.
In the report, the G20 countries say DPI could “play a transformative role in advancing financial inclusion and productivity gains.”
But really, it’s bureaucratic gobbledygook. It’s designed to hide the true nature of the governments’ CBDC playbook.
And DPI is central to their ambitions to roll out digital currencies.
CBDCs Are Coming in Three Stages
DPI centers around three main elements: a digital identity (or ID), a data-sharing platform, and a fast payment system.
The first element is the digital ID. All your personal information and credentials would exist in a digital format.
Governments will argue that this makes it easier for you to access services – like online payments, government benefits, and online shopping. It could even make online interactions more secure.
But many people are wary of digital IDs. And for good reason.
They could lead to more government surveillance, data breaches, and the creation of centralized databases. These could all pose significant privacy and security risks.
The second element is a platform for people to share all of that personal data with others. It’s still in its early stages, so we don’t know how it would work exactly.
But one thing we do know is that it would be centralized. It would rely on trust in government officials… And that makes it risky.
However, the third element is the one that really caught my eye. It’s a real-time fast payment system.
Think of it as a centralized payment system that makes bank settlements happen in real time. This means you can send and receive instant payments, no matter the time or day, every day of the year.
These payment systems can be run by governments, by central banks, or through public-private partnerships.
And if you’ve been reading Inside Wall Street, you’ll know that the Federal Reserve already rolled out a new instant payment system here in the U.S.
It’s called FedNow, and it allows for the instant transfer of payments between its bank and corporate users.
It makes sense that the next logical step in developing that platform would be to introduce a digital dollar that could be used for those payment processes.
That’s why I keep saying FedNow may not be a CBDC, but it’s a precursor to one. And after reading the G20 report, I’m even more convinced…
India, the current G20 presidency, is a case in point.
It’s the first nation to develop all three foundational DPIs, including real-time fast payment systems and digital IDs.
And, judging by the recent summit, other G20 countries will follow suit. We don’t know how soon. But what we do know is this:
98 central banks are already planning the digitalization of their currency.
More than 80% of global banks are exploring digital currency.
And overall, 130 countries are already exploring digital currencies. These 130 countries represent 98% of global GDP.
Now, a CBDC isn’t necessarily all bad. It’s a form of currency that only exists in cyberspace, allowing consumers to transact without a bank account.
This makes it a groundbreaking technology with the potential to catalyze innovations in the financial sector and foster new business models.
But the risks far outweigh the potential benefits.
Five Risks as Governments Roll Out Digital Currencies
CBDCs will give central banks and governments almost unbreakable financial control over your life. The implications are limitless. For example:
Tax Enforcement. Enforcing taxes is expensive for the government. In the U.S., it eats up around 10% of all taxes collected. With an all-digital dollar, the government could use complex algorithms to tax any transaction in real time… and at little or no extra cost.
More Taxes. As the financial elite catch on to the above, you can count on more taxes. That could be anything from federal taxes on sugary foods and drinks, to alcohol consumption taxes, to tourist taxes.
Interest Rates. Just like the savings in your bank account, your digital dollars would have to pay interest.
Higher Inflation. As I’ve written previously, an all-digital dollar would enable the Fed to conjure even more money out of thin air. That’s because it’s easier – and faster – to create a CBDC electronically than a fiat currency. And the greater the money supply, the less valuable each unit of it becomes.
More Control. Finally, a CBDC could even be programmed so that it’s only spendable if the holder of those funds meets certain requirements. This means that, if you do something the government doesn’t like, they could fine you. Or even worse, at the push of a button, they could turn off your ability to transact.
As former U.S. representative Dr. Ron Paul said: “The cashless society is the dream: total knowledge of, and control over, the finances of every single American.”
Unfortunately, the global tide towards CBDCs suggests that the U.S. too will likely transition to an all-digital dollar, perhaps sooner than many anticipate.
That’s why I recently recorded an investigative report to help you get on the right side of this shift.
In it, I go into more detail on what a digital dollar could mean for our financial system… for Americans… and for your money. You can watch it for free right here.
Editor, Inside Wall Street with Nomi Prins