Saturday, September 23, 2017

WARNING Federal Reserve to Launch Its Own E-currency: Fedcoin




By Robert Wenzel

The U.S. Federal Reserve will not only issue its own cryptocurrency but will also make sure Americans use it, according to Doug Casey.

“To start with, I suspect it’s going to be
a parallel currency. Perhaps usable just within the U.S. which, in effect, would be a form of foreign exchange controls even more effective than the inability of Americans to open up foreign bank and brokerage accounts today [due to monetary control through FATCA]…I think it’s a near certainty that they’re going to do something like this and soon.”

They will call it Fedcoin.

David Andolfatto, vice president at the St. Louis Fed, proposed the word “Fedcoin” in 2015. He’s spoken publicly about this multiple times since then, and says Fedcoin could give the central bank an “added (policy) tool.”

Andolfatto wrote in a Newsweek article:
My own recommendation is for central banks to consider offering digital money services (possibly even a cryptocurrency) at the retail and wholesale level. There is no reason why, in principle, a central bank could not offer online accounts, the same way the U.S. Treasury presently does...
They would give monetary policy an additional instrument—the ability to pay interest on low-denomination money (possibly at a negative rate)....
It's hard (for me) to see what the downsides are in having a central bank supply digital money.
In the article entitled “Fedcoin”, J.P. Koning speculates, “The Fed would create a new blockchain called Fedcoin. Or it might create a Ripple style ledger by the same name. It doesn’t matter which. There would be an important difference between Fedcoin and more traditional cryptoledgers. One user—the Fed—would get special authority to create and destroy ledger entries….The Fed would…provide two-way physical convertibility between both of its existing liability types—paper money and electronic reserves—and Fedcoin at a rate of 1:1.”

Casey warns that with blockchain and the Fedcoin technology, the government will be able see everything, everywhere...Without cash, you have no privacy. If you have to put everything through a bank account, the government knows exactly what you’re buying, what you’re selling, how much you are earning. They’re in complete control; able to take what they want…including your entire account if you become politically undesirable.

If the government and Federal Reserve decide to implement something like “Fedcoin,” they’ll be able to modify the blockchain to suit their needs…They’ll be able to see every transaction… impose extra taxation through negative interest rates… and do just about anything they please, says Casey.

Casey adds:
[Fedcoin will be] like an anti-cash. If I've got a $100 bill in my wallet or a bunch of 10s and 20s, I can spend them on anything I want with anybody I want and nobody knows.

With blockchain, I can only send that money to somebody else who's got a receptive smart phone or chip and they know exactly who's getting the money and what it's being spent for. It can be programmed so that certain transactions can't take place or transactions with certain people or stores or whatever. So you are pretty well blocked in.

I mean, for all I know, they might decide that, under your Obama Care or whatever comes of that, after it; you're too fat. You can't buy sugar, but if you can't buy sugar, who can buy sugar? I mean, how are you going to pay the other person to buy sugar if you want sugar?

You want ammunition for your gun? Well, maybe you can't buy it. How are you going to get it? How are you going to pay for it?


This is a real personal freedom problem and it's going to be sold to the American people under the guise of convenience and safety and fighting drugs and fighting theft and fighting crime and fighting terrorism and all the usual nonsense. But it's going to be devastating to our freedom and economic progress in this country....The most important thing to remember is that the paper dollar, the $100, the $50 bill, currency itself is on its way out. It's going to be replaced strictly with digital money as is happening in other places in the world right now. This has got very serious consequences for you on all levels. So plan your life around that.

In July 2017, a group assembled by the Federal Reserve, known as the Faster Payment Task Force, put out what it called a Final Report (Part 2) A Call to Action.

Members of the task force include: Wal-Mart Stores, Inc., American Express, the Digital Currency Council, the FDIC, Goldman Sachs, J P Morgan,  KPMG, MasterCard, Morgan Stanley, Netflix, Nielsen, Price Waterhouse Cooper, Prudential Financial, the Social Security Administration, Starbucks, Starwood Hotels and Resorts, Toyota Motor Credit Corporation, VISA Inc and Zions Bancorporation.

Here's what task force wrote in its report:
The Faster Payments Task Force calls upon all stakeholders to seize this historic opportunity to realize the vision for a payment system in the United States that is faster, ubiquitous, broadly inclusive, safe, highly secure, and efficient by 2020. This report provides the roadmap.
The report covered a multitude of payment topics but in the e-currency section of the report, the group covered an e-currency it called Wingcash. It has all the disturbing elements of Fedcoin, just a different name:


And the report discussed  "federated identity management" (Translation: We will track everyone's money activity)

From the report:
Federated Identity Management – Building on the concept of digital identity,
multi-operator environments will benefit from an established set of rules and protocols
that will link a person’s electronic identity and attributes when it is stored across multiple, distinct identity management systems. Several standards organizations such as National Institute of Standards and Technology (NIST), Fast Identity Online Alliance (FIDO), Identity Assurance Framework (The Kantara Initiative), and the National Strategy for Trusted Identities in Cyberspace (NSTIC) have set the stage for development of federated identity frameworks
The 2020 deadline may be a little ambitious for Fedcoin, there were many payment actions discussed in the task force final report, many having nothing to do with e-currency, but it is clear that a Federal e-currency is well along in the planning stage. It's coming.

Robert Wenzel is Editor & Publisher of  EconomicPolicyJournal.com and Target Liberty. He also writes EPJ Daily Alert and is author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics and on LinkedIn. His youtube series is here: Sunday Morning with Robert Wenzel.

Sources:

Bitcoin.com

Moneyness

Project: Fedcoin

Newsweek

The U.S. Path to Faster Payments