NEW YORK CITY (LifeSiteNews) — Global banking giants have teamed up with the Federal Reserve Bank of New York to launch a 12-week proof-of-concept blockchain technology digital money platform.
Participating banks announced the pilot program Tuesday, which intends to test how “using digital dollar tokens in a common database can help speed up payments,” Reuters reported.
Banks will issue simulated digital money representing customer deposits, and, according to Business Wire, “settle through simulated central bank reserves on a shared multi-entity distributed ledger,” which Decrypt explained is better known as blockchain technology.
The proposed platform includes participation from central banks, commercial banks, and regulated non-banks, and “aims to prioritize maximum participation from public and private sector regulated entities,” Business Wire reported.
Participating financial institutions include Citigroup, Mastercard, and Wells Fargo, and HSBC, BNY Mellon, PNC Bank, TD Bank, Truist, and U.S. Bank.
The banks will be collaborating with the New York Innovation Center (NYIC), which is part of the Federal Reserve Bank of New York. The NYIC aims at “enhancing the functioning of the global financial system and the ability of central banks to carry out their missions.”
The technology for the pilot program will be provided by SETL with Digital Asset, powered by Amazon Web Services. In addition, in order to “support interoperability across the international financial ecosystem,” the global financial messaging service provider Swift will be involved in the project.
“It begins,” tweeted former CIA contractor and whistleblower Edward Snowden in response to the news.
Despite the claim that the pilot is not “intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a retail or wholesale central bank digital currency (CBDC),” commentators have expressed concerns that it is still a significant step towards a CBDC, which in turn opens the door to government control of personal finances.
One such observer, Becker News CEO Kyle Becker, called the development “a major threat to U.S. sovereignty,” and “tantamount to a declaration of economic war on Americans.”
Neel Kashkari, president of the Federal Reserve Bank of Minneapolis openly warned of the dangers of CBDCs in August during the Annual Conference of the Journal of Financial Regulation at Columbia Law School in New York.
President of the Federal Reserve in Minneapolis tells you what is this about: pic.twitter.com/qP2dCPItHI
— JCS 🇨🇴⚡ (@JCastroS) November 15, 2022
“I keep asking anybody at the Fed or outside the Fed to explain to me what problem this is solving,” said Kashkari in reference to CBDCs. “I can send anybody in this room five dollars with Venmo right now. So what is it that a CBDC could do that Venmo can’t do?”
“And all I get is a bunch of hand-waving. Like, ‘Maybe it’s better for financial inclusion… Maybe. Is there any evidence that it is?”
“…I can see why China would do it. If they want to monitor every one of your transactions, you could do that with a central bank digital currency. You can’t do that with Venmo. If you want to impose negative interest rates, you can do that with a central bank digital currency. You can’t do that with Venmo.”
“And if you want to directly tax customer accounts, you could do that with a central bank digital currency. You can’t do that with Venmo. So I get why China would be interested. Why would the American people be for that?”
According to Decrypt, the banking group says it will publicize the project’s results upon completion.
President Joe Biden’s Executive Order 14067, issued on March 9, 2022, declared that his administration “places the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC,” and called for an analysis of its “potential implications.”
The order went so far as to praise a U.S. CBDC’s potential for interoperability with other countries’ CBDCs, which would open the door to a cohesive international digital financial system.
While White House announcements do not indicate when such a CBDC would be developed and implemented, financial adviser Joe Brown is warning that the infrastructure for a U.S. CBDC is already being quietly developed.
On August 29, the Federal Reserve announced that its digital instant payments service FedNow would begin “full-scale pilot testing” in mid-2023. FedNow would allow “24/7 settlement … that happens instantly from bank to bank.”
“This infrastructure bypasses a lot of the need for the current banking infrastructure, which is the purpose of a central bank digital currency,” Brown recently explained on his video blog. “Eventually, every single economic participant has an account directly with the Federal Reserve, the central bank, and then you don’t need any of the decentralized nodes of the financial system, the previously existing banks.”