The Future of Currency - CDBC, Crypto & Fiat

With the advent of the concept of Central Digital Banking Currency (CDBC) the waters surrounding fiat currencies, sound money and crypto-currencies have only grown murkier. Additionally, as the global balance of power sways precariously away from the West, the role of traditional fiat currencies such as the dollar are incrementally losing their relativity across global markets.

Before examining the future of fiat currencies and cryptos with respect to a CDBC, let’s first examine the dynamics which are weakening the dollar’s position, irrespective of the role of a future CDBC.

Over the past year, the People’s Bank of China (PBC) has amassed a huge stock of gold, which exceeds the amount possessed by China at any other point in modern history. Some strategists suggest that this may be in preparation for war. Case in point is Russia. Prior to the Ukraine invasion, Russia made a major move away from the dollar and began to hedge its bet(s) with gold and the Chinese Yuan.

Other countries, emulating Russia, especially BRICS nations - will soon follow suit, unseating the dollar from its global hegemonic position. It is inevitable, and the Russo-Ukrainian conflict is only hastening the death of the world’s most popular fiat currency (80% of all physical American Dollars are held outside of the United States).

By default, the implementation of a CDBC (or several) means the death of most, if not all fiat currencies; first and foremost – the dollar. So the Russian-Chinese pivot away from the dollar, in part due to the current conflict, will only hasten the agenda of the international bankers, the World Economic Forum (WEF) and the “Davos Crew.” The Russian-Ukrainian conflict is indeed weakening the dollar even as Russia and China are simultaneously solidifying their global economic positions through precious metal holdings.

The dollar is not in a stable position, and when it does tumble, it will be severe, especially if a fledgling CDBC puts the icing on the gold-backed cake that China and Russia have so cleverly baked.

In my opinion, a CDBC will eventually displace the majority – if not all – fiat currencies, but what of the cryptos in the face of a regionally or internationally-based CDBC. While I personally admire and support the concept of cryptos, how do the “powers that be,” which support the issuance of a CDBC, interpret the existence and usage of crypto-currencies in the global economy, with their reasonably high level of privacy/anonymity?

They see that as a threat to their goal of implementing a CDBC. While CDBC’s and cryptos do have some similarities, they are definitely polar opposites in one very important respect. Crypto-Currencies allow for privacy, anonymity and security, while one of the primary concepts of a CDBC is total government oversight and surveillance of one’s spending habits, and the ability to shut down a potential “dissident's” CDBC account without any due process, leaving them instantly and totally impoverished.

My guess is that the SEC will happily work with any global banking entity that is pushing for a universal CDBC, and then utilize hyper-regulation of existing crypto-currency companies in order to hinder the continuance of successful mining operations and to limit the usage of cryptos on the global market.

I would also assume that the global Central Banking Entity (which should emerge from the pit of hell within the next decade), will allow for certain government-regulated cryptos which have a value based intrinsically on a CDBC.

Crypto-currencies may outlive fiat currencies, such as the dollar, however the global central bankers will inevitably not stand for the competition – and just as importantly – the lack of governmental oversight – due to encryption, of the spending habits of the global population.

Another point to consider is that given AI, Qubit (Quantum) Computing and D-Wave Systems (which can work in unison simultaneously), the question of the efficacy of today’s crypto "encryption" is a valid one, meaning that the security infrastructure may not be as sound as people believe, making the entire system more susceptible than most would believe possible. If someone decides to "pull the plug" utilizing an unknown attack vector, the inevitable collapse would make the SBF/FTX scenario look sophomoric.

In conclusion, given the fact that the dollar was already losing its hegemonic position before the Russian-Ukrainian conflict, the BRICS nations’ move towards a gold-backed financial system dovetails perfectly with the global elites’ calls for a CDBC. And if a crypto is (or were) hypothetically more secure than fiat currency, why would not the progenitors of the CDBC movement interpret the cryptos as being an even bigger threat than traditional fiat currencies to the successful implementation of a CDBC?

Dr. T.X. Montenegro