"Biden Bucks" and the War on Crypto

Authored by: James Rickards

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I've written extensively about crypto central bank digital currencies (CBDCs), including the U.S. dollar version called "Biden Bucks." The threat from CBDCs is enormous.

They are digital (but not actual cryptocurrencies), which means they are programmable. The Treasury and Fed can use the CBDC ledger to track your purchases, political contributions, and religious affiliations and profile you as an enemy of the state or "ultra MAGA."

Your "Biden Bucks" could be made to stop working at the gas pump once you've purchased a certain amount of gasoline in a week. How's that for control?

And in a world of "Biden Bucks," the government will even know your physical whereabouts at the point of purchase. But it gets even worse.

CBCD + AI = Nightmare

This profiling can be combined with artificial intelligence (AI) and generative pre-trained transformer platforms (GPT) to read your mind practically.

From there, the government can freeze your bank accounts, impose taxes and penalties and put you on a "use it or lose it" fiscal policy stimulus plan that forces you to spend your money within 30 days or partially confiscate it.

If any of this sounds extreme, fantastical, or otherwise far-fetched, it's not. It's already happening around the world.

China is already using its CBDC to deny travel and educational opportunities to political dissidents. Canada seized nonviolent trucker protesters' bank accounts and crypto accounts last winter.

These "social credit" systems and political suppression will be even easier when "Biden Bucks" are completely rolled out in the U.S.

The Associated Press tried to fact-check me, saying that my claims were false and that the digital dollar has nothing to do with social control. The whole project is entirely innocent, and you can trust the government.

But even the general manager of the Bank for International Settlements, which is known as the "central bank of central banks," has admitted that CBDCs would give central banks "absolute control" of everyone's money — and the "technology to enforce that."

Even The Economist has announced the rise of government-backed digital currencies, warning they will "shift power from individuals to the state." The Economist isn't known for engaging in conspiracy theories.

No Competition Allowed with Crypto's World

And this is central to the CBDC plan: As the CBDC dollar is being implemented, the government needs to take away your alternatives. The three main alternatives are physical cash, gold, and cryptocurrencies.

Cash is attacked through multiple channels, including "no cash accepted" signs at public events, anti-money laundering rules, and simple inflation that might allow you to hold cash. Still, it will be worth a little.

(In 1969, the U.S. abolished the $500 bill, leaving the $100 bill as the highest denomination. The $100 bill of 1969 is only worth $12 in today's purchasing power because of inflation. Give it time, and it will be worth a $5 bill.)

And cryptos are also under full-scale attack. The U.S. Securities and Exchange Commission (SEC) has sued Binance, the world's biggest cryptocurrency exchange, and its founder Changpeng Zhao, alleging they operated a "web of deception."

Among the 13 other counts in the lawsuit are allegations that Binance inflated trading volumes, mishandled customer funds, and misled investors about market surveillance controls. One day later, the SEC also sued the Coinbase crypto exchange for failing to register as an exchange under U.S. law.

During the wave of bank failures in early March, the FDIC closed Signature Bank, which operated a cryptocurrency portal called Signet in addition to regular banking activities. That came days after the failure of Silvergate Bank, which also bridged the everyday banking world to the world of crypto. None of this is random.

Governments Never Wanted to Kill the Blockchain — Just to Control It

The U.S. has opened a full-scale war on crypto. Silvergate, Signature, Binance, and Coinbase are just the first victims. They won't be the last. Crypto has to go if CBDCs are going to be fully implemented.

Many advocates of Bitcoin and other cryptocurrencies have shared a naïve belief that their digital assets are "beyond the reach of governments," "cannot be traced," and "cannot be frozen or seized."

They've learned otherwise. Blockchain does not exist in the ether (despite the name of one cryptocurrency), and it does not reside on Mars. Blockchain depends on critical infrastructure, including servers, telecommunications networks, the banking system, and the power grid, all subject to government control.

As I've argued for years, governments don't want to kill the blockchain upon which cryptos are based. They want to control it.

Governments enjoy a monopoly on money creation and are not about surrendering that monopoly to cryptocurrencies.

But governments know they cannot stop the technology platforms on which the cryptocurrencies are based. Blockchain technology has come too far to turn back. That's why they're co-opting it.

What Happens if CBDCS Gets Hacked?

One issue with Biden Bucks needs to be adequately addressed: How can you trust them to keep your money secure once you convert it to a traceable digital currency?

Hackers routinely target crypto architecture and steal money. What happens if that digital currency gets hacked?

From a 2022 Federal Reserve paper:

Threats to existing payment services — including operational disruptions and cybersecurity risks — would also apply to a CBDC. Any dedicated infrastructure for a CBDC would need to be highly resilient to such threats, and the operators of the CBDC infrastructure would need to remain vigilant as bad actors employ ever more sophisticated methods and tactics. Designing appropriate defenses for CBDC could be particularly difficult because a CBDC network could potentially have more entry points than existing payment services.

This part is genuinely terrifying. To repeat:

Designing appropriate defenses for CBDC could be particularly difficult because a CBDC network could potentially have more entry points than existing payment services.

If bad actors can easily hack crypto platforms, what's to stop them from hacking a CBDC network with more entry points?

You might not be able to fight back quickly in the "Biden Bucks" world, but there is one non-digital, non-hackable, nontraceable form of money you can still get your hands on.

It's called gold. Get some before it's too late.

This article was printed from TradingSig.com

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