The digital dollar is upon us.
With every passing day, our government is closer to adopting a central bank digital currency (CBDC) and transforming our monetary system.
A CBDC is a currency that would not be printed. It would only exist in cyberspace, allowing consumers to transact without a bank account.
This would bring a major shift to our lives… affecting how we earn money to the ways we spend it.
Now, a CBDC isn’t necessarily all bad.
It’s a potentially revolutionary technology. For example, it could jumpstart innovations in the financial sector and support new business models.
But if you’ve been reading Inside Wall Street, you’ll know I don’t believe that the potential benefits outweigh the dangers. And that’s because the digital dollar will give the Fed and government almost unbreakable financial control over your life.
Today, I want to shed light on some key developments relating to the topic. I’ll also show you one way to position yourself against this inevitable trend…
From Hamilton to Cedar
The U.S. CBDC project all started with Project Hamilton.
I wouldn’t blame you for not knowing about it…
There was little fanfare when it kicked off in August 2020.
Back then, the Fed embarked on a “multi-year exploratory research project” on issuing a CBDC that could be used by an economy as large as the United States.
It was an important moment… For the first time ever, the Fed signaled its intent to use a CBDC for all economic transactions across our nation.
Last year, the Fed and its partner, the Massachusetts Institute of Technology (MIT), concluded the project.
The outcome?
Scientists created a code that’s capable of handling 1.84 million transactions per second. They also found the “vast majority” of transactions settled in under two seconds.
Then, they released OpenCBDC-tx, a research codebase under a larger open-source project called OpenCBDC.
The stated goal of this global codebase is “to help central bankers, policymakers, academics, and others make decisions on how this technology might be developed.”
And the results were encouraging…
So encouraging, in fact, that the Fed kicked off two more CBDC initiatives that same year: the Regulated Liability Network (RLN) and Project Cedar.
Spearheaded by the Fed’s New York branch, the RLN made use of blockchain tech to make settlements between banks as they exchange simulated digital tokens.
It was a 12-week pilot program for the new digital dollar. And it involved global finance giants like BNY Mellon, Citi, Wells Fargo, and SWIFT.
Meanwhile, Project Cedar saw the Fed team up with other central banks to explore the potential of cross-border payments using a CBDC. As part of the project, they tested exchange spot trades to determine whether a blockchain solution could improve “speed, cost, and access to cross-border wholesale payments.”
The results were very promising. Again.
The Fed and the Monetary Authority of Singapore found that blockchain can significantly improve cross-border payments. The two central banks managed to link their digital currency ledgers without a central clearing authority or a shared central network.
The payments were automatic and reduced counterparty risk. An end-to-end settlement was achieved in under 30 seconds.
Now, Project Cedar is currently focused on so-called “wholesale” transactions. These are transactions between banks and clearing firms… not the general public.
But that doesn’t change the reality at hand. And it’s that the push for the digital dollar continues…
Not Just a U.S. Project
Here’s the thing you need to understand about CBDCs.
They’re not just a U.S. project. They’re a global phenomenon.
According to the Atlantic Council Central Bank Digital Currency Tracker, 114 countries are currently exploring a central bank digital currency. This represents 95% of global GDP.
At writing, 65 countries are in the advanced stages of CBDC development.
Eleven countries have already launched their own CBDCs. These include Nigeria, Jamaica, the Bahamas, and eight countries in the Eastern Caribbean.
Twenty countries are currently trialing CBDCs. These include China, Hong Kong, Sweden, Saudi Arabia, Russia, South Africa, and Singapore.
In Australia, the government is conducting pilot programs with multiple financial institutions to test CBDC use cases.
In Brazil, the Central Bank of Brazil aims to launch a CBDC in 2024. Earlier this year, Brazil successfully implemented a closed pilot program with financial institutions.
In China, the government recently included the digital yuan, also known as e-CNY, in its currency circulation calculations. The e-CNY represents 0.13% of cash and reserves held by the central bank.
China was the first major economy to test a CBDC when it began pilots in April 2020. At writing, the government has rolled out e-CNY in four cities: Shenzhen, Suzhou, Xiong’an, and Chengdu.
Here’s the bottom line. Countries are falling over each other in their scramble to develop a CBDC.
For a while, the U.S. was trailing behind. In fact, without Project Cedar, the Federal Reserve would be far from matching the progress made by its global counterparts.
But the successful outcomes of this initiative have now allowed the U.S. to transition from the research phase into the development stage.
And with that, all Group of Seven (G7) economies are now in the development stage of a CBDC.
That means the world’s largest and most advanced economies – including the U.S., U.K., and Germany – are all getting serious about adopting CBDCs.
What This Means for Your Money
It’s inevitable that the U.S. will adopt an-all digital form of the dollar at some point.
This won’t happen overnight. But it’s a “when,” not an “if.”
In fact, on July 31, the Fed is set to unleash the biggest monetary transformation of our time…
It will upend the way we interact with the financial system – and the way the financial system interacts with us.
Make no mistake, this is an inside attack on the dollar. I believe it will blindside millions of Americans… and could leave a permanent scar on their finances.
But this alarming event is also a rare opportunity to turn just a modest investment into a generational nest egg.
That’s why I’m holding an emergency briefing tonight at 8 p.m. ET. I’m calling it Countdown to Chaos (click here to RSVP instantly).
During the event, I’ll explain what plans the Fed has for our money… and one way you can prepare for what’s about to happen. It involves a little-known asset with the potential to deliver 50x returns.
Here’s the thing… The coming chaos isn’t about a single bank or stock going down. It’s much, much bigger than that.
And it’ll have implications for you and your children’s financial futures. So join me tonight in my briefing (sign up instantly here). And learn more about how you can protect – and even grow – your wealth.
Regards,
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Nomi Prins
Editor, Inside Wall Street with Nomi Prins
P.S. Just this year alone, we saw five banks go belly up within the span of weeks.
The truth is, the dangers in the financial sector continue to lurk behind closed doors.
And as the Fed unleashes its final transformation of our financial system, more banks are in line to collapse… putting your money on shaky grounds.
To help you make the most of my special briefing, I’ve prepared a special report called The 722 Bank Bombshell: Is YOUR Bank Next to Fail?
In it, I detail seven banks that are on the brink of failure. To access the report, make sure you upgrade to VIP right here when you sign up for my event.
I look forward to seeing you tonight.