Authored by Steven Guinness,

The behaviour of central bankers is rarely (if ever) given sustained coverage in the national press. Outside of prominent economic channels, developments from within institutions such as the International Monetary Fund and the Bank for International Settlements are seldom remarked upon. Instead, attention is restricted to the latest round of political theatrics which serve to disguise the actions and intentions of globalist planners.

As the furore of Brexit gained in intensity last month, BIS General Manager Agustin Carstens gave a speech at the Central Bank of Ireland 2019 Whitaker Lecture. Under the heading, ‘The future of money and payments‘, Carstens mapped out what has been a long standing vision of globalists – namely, to acquire full spectrum control of the international financial system through the gradual abolition of what Bank of England governor Mark Carney has called ‘tangible assets‘ i.e. physical money.

The ‘future of money‘ narrative is one that both the BIS and the IMF have been actively promoting since the advent of Brexit and Donald Trump’s presidency. Here are some links to speeches made by both Christine Lagarde and Agustin Carstens:

Central to the vision for a fully digitised global economy is the intent to reform national payment systems. The UK uses the Real-time gross settlement (RTGS) system, which the majority of payments in Britain are facilitated through. The Bank of England’s Victoria Cleland has emphasised on numerous occasions that the ‘fundamental renewal‘ of the system is being carried out through choice rather than necessity. This would indicate that RTGS works fine in its current manifestation, but the BOE (along with the European Central Bank) have been tasked with assuming more control over their respective payment systems.

As Cleland has confirmed via several speeches, tests on a renewed RTGS have demonstrated that distributed ledger technology (DLT) has the capability to connect to it in the future. Blockchain is a form of DLT, and by extension blockchain works in conjunction with cryprocurrencies like Bitcoin. In February 2019, Cleland intimated that the previous intention to have finalised the RTGS reform by 2020 had been pushed back to 2025.

We are looking at 2025 for completion, with a number of transition states as we head to that. What we want to achieve is more ambitious now, and we are doing some exciting work around innovation and looking at ways of bringing in participants.

The year 2025 is potentially significant as we will later look at.

Returning to Carstens speech at the Central Bank of Ireland, here he spoke of how the reform of payment systems have been ‘infrequent‘ over the decades, with wholesale changes to the nature of money ‘even rarer‘.

But now, attempts to create new forms of money or to engineer new ways to pay appear almost weekly.

The ‘new ways to pay‘ is in part a reference to services such as TransferWise, who have pioneered the introduction of borderless accounts that allow people to hold up to forty currencies at once with the ability to convert them whenever desired. New methods of payments such as this, which grew out of the 2008 financial crisis, bypass banknotes and coins altogether. Money can only be sent, received or converted electronically, unlike at high-street banks or travel bureaus which still offer physical cash. TransferWise describe their service as showcasing ‘bank-level security, minus the banks‘.

When it comes to ‘new forms of money‘, Carstens explains that the current system of central banks issuing banknotes, and commercial banks providing electronic money, is being targeted for reform – in the shape of central bank digital currencies (CBDC’s).

A CBDC would allow ordinary people and businesses to make payments electronically using money issued by the central bank. Or they could deposit money directly in the central bank, and use debit cards issued by the central bank itself.

It becomes apparent that two tranches of reform – to payment systems and to how money is used – are in the process of being carried out simultaneously.

In previous articles I have talked about how globalists invariably utilise the vehicle of gradualism when it comes to implementing changes within the financial system. The BIS themselves raised the subject in their final quarterly report of 2017. When seeking to centralise economic power further, central banks work by stealth. It can take many years, even decades, for a plan to become reality.

In relation to CBDC’s, it is no surprise to see Carstens speak of banks opting to ‘tread cautiously into new territory‘.

The monetary system is the backbone of the financial system. Before we open up the patient for major surgery, we need to understand the full consequences of what we’re doing.

Hackneyed metaphors aside, it is no secret that the only thing that preserves the current system of fiat currencies is the level of trust that you and I place in them. But trust is not a physical construct. Rather, it is underpinned by belief. As Carstens mentions, in an economic sense trust can be compromised by ‘currency devaluations, hyperinflation, wide-scale payment system disruptions or bank defaults.’

The bigger picture begins to emerge when Carstens declares that the debate around CBDC’s is not to do with the technology involved, but ‘partly about the potential decline in the use of cash.’ This is an exercise in perceptual management. He wants the focus to be on the demise of physical assets rather than the digital transformation of how money functions. The idea is that the decline of cash be perceived as organic rather than premeditated.

Two variations of a CBDC are cited. The first is a wholesale variant that would be used primarily for interbank payments. The second is a retail CBDC which would be accessible to the public.

This could be based either on digital tokens or on accounts. That would mean that you and I could open bank accounts directly with the central bank.

As is often the case when powerful heads of institutions speak, the underlying agenda gradually finds its way through the flannel.

Like cash, a CBDC could and would be available 24/7, 365 days a year. At first glance, not much changes for someone, say, stopping off at the supermarket on the way home from work. HE OR SHE WOULD NO LONGER HAVE THE OPTION OF PAYING CASH. ALL PURCHASES WOULD BE ELECTRONIC.

This is confirmation that if CBDC’s are rolled out in the future, it would result in the abolition of physical money. Every penny you possess would be held within the financial system.

It does not end there:

From here, differences start to emerge. A CBDC is not necessarily anonymous, like cash. And unlike cash, it could pay or charge interest.

Let’s deal with each of those in turn. For globalists to gain full control of the financial system, the ability of citizens to hold their money anonymously must end. The strawman arguments in favour of this happening have already been planted within the media – from illicit financing of terrorism to money laundering. Concerted efforts are being made to encourage people to look upon those who prefer to deal in cash with suspicion. When you narrow it down, being able to trace and track every single payment, which is currently not possible if you opt to pay with cash, is the goal here. Therefore, eliminating the choice of using banknotes and coins is essential.

Equally disturbing is the use of interest rates under a CBDC system. Right now, if you hold physical money, it is not vulnerable to a fluctuation in rates. Money held in a bank account, however, is susceptible. Even so, it can easily be transferred to one that offers a better rate, or can ultimately be withdrawn altogether in favour of holding the money in your hand. With CBDC’s, you would be locked in. Positive rates would continue to pay you interest. But what about if rates turned negative throughout the banking system? In this scenario you would be charged for holding your money with the bank, with no way of counteracting such measures.

In short, the loss of anonymity and exposure to negative rates would mean servitude to the banking system. Short of transferring assets into precious metals, it would leave citizens with no means of escape.

Carstens goes on to suggest that central banks could one day offer deposit accounts, bypassing traditional commercial banks.

If bank deposits shift to the central bank, lending would need to shift as well. The central bank would be taking on the lending business.

Using the scenario of customers opting to put money in a digital currency of a central bank, or directly into a deposit account, Carstens said:

It is not far-fetched to imagine that a premium would open up, where one euro of deposits in the commercial bank buys less than one euro’s worth of central bank digital currency.

Gauging the speech as a whole, these eventualities are dependent on the successful implementation of CBDC’s. For that to happen, physical cash must gradually be eroded. Whilst central banks are working on concepts for a CBDC’s, they do not yet appear to be in a position to introduce them. According to Carstens, ‘very few central banks think it is likely that they will issue a CBDC in the short to medium term.’ One of the reasons for this is that ‘there is not yet a noticeable and widespread fall in the demand for cash.’

As I have documented elsewhere, cash usage is declining year on year but remains a popular form of payment. How long before we reach an inflection point is unknown. What we do know is that the BIS measure the short term plans for central banks at one to three years, with the medium term at one to six years.

Six years from now takes us to 2025 – the year that the Bank of England are targeting for the completion of reforms to the RTGS payments system. As for the BIS, in a speech Carstens gave last month titled, ‘The new role of central banks‘, the institution is focused on a new BIS medium-term strategy called Innovation BIS 2025.

One element of this plan is for the establishment of ‘a multidisciplinary Innovation Hub at the BIS in order to foster collaboration in innovation-related work, as well as a new unit which will undertake policy analysis and research on how key innovations and increased data availability should inform policy and shape central banks’ responses.’

Clearly, they are preparing for major changes to the financial system. Rapped up in this BIS 2025 initiative is to process all ‘relevant implications of technological innovation‘, such as distributed ledger technology. CBDC’s would inevitably be part of such innovation.