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Discussion Starter · #1 ·
Five days ago, president pudding head signed an executive order entitled "Executive Order on Ensuring Responsible Development of Digital Assets". (that's the White House website)
In this order, direction is given to begin information gathering on the affects and plausibility of developing and implementing a "US CBDC" (United States Central Bank Digital Currency).
The very thing we've all seen coming down the pike may be here before the end of president houseplant's term.

Proposed as a means to combat "crime and illicit finance; national security; the ability to exercise human rights; financial inclusion and equity; and climate change and pollution".
Presented as a tool to mitigate "risks that digital assets could pose to consumers, investors, and business protections; financial stability and financial system integrity".
With all the flowery fear-mongering that could be mustered, we are now in the first stages of saying goodbye to cold hard cash, even if it is just a fiat currency.
With a system like this, your paper and pocket change will be worthless, unless turned in and converted to "digital assets".
Your digital assets will be linked to a "wallet" which must be identifiable to you for the CBDC to register any existence of you in the blockchain. This will of course not be allowed to be anonymous. There's not a single transaction involving the government where the identities are anonymous.

The mind reels with the potential this kind of system could bring about.
You think it's easy for your credit card company to turn your card off? Just wait until your political opposition doesn't like what you said on Twitter. Bye bye bank balance.

Some of the directives are given 180 days for a response.
Read through it.
Make plans.
I intend to pull all cash assets out as soon as any of this progresses. At the slightest whiff of a digital coin being created by the government, I'm out.
Thankfully (unless this has been working in the background since he took office) the gears of government grind slowly and there will be some congressional action that must take place before "legal tender" is no longer "legal".
Don't panic yet. But be prepared. I predict a run on the banks within the year.
 

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Discussion Starter · #5 ·
What good would your cash be if it becomes worthless, non-legal tender?
It will be accepted wherever it's decided to still be accepted. Just as it is now. That's the whole notion behind a fiat currency. It's a trading system built on nothing but trust that the currency has value in the trade.
If a state, for example, decides not to engage in this and break off, you'll still need some interim currency to trade with.
Just like shiny rocks and beads, paper and coin have trade value even if they lack intrinsic value. You don't give a dollar for your soda because you think soda is worth $1 worth of gold. You do it because it's worth losing that one paper rectangle with Washington's face on it.
In any shift between currency systems, until sides are taken and finalized, people will revert to what they are comfortable with.
Having your fiat cash, and any gold/silver too, on hand will give you a way to migrate the transition to whatever new physical currency might spring up as a result of this. (think state-issued currency, in the event this splits the country in some way... as an example)

Bear in mind, "legal tender" only means it's an acceptable form of payment for all debts.
Becoming something other than "legal tender" doesn't mean it will be illegal to accept it as payment.
The government just won't recognize it.
 

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Discussion Starter · #13 ·
I am trying to understand this crypto/digital currency. The one question for which I haven't found an answer is this: If Bitcoin has a finite number of "coins", and you buy into it, who gets the cash you send? Assume it is like an original issue stock -- the corporation which issues the stock gets the cash and you get part ownership of the corporation. But is there a corporation for Bitcoin (or any of the others)? What exactly do you "own"? Who gets the money? I understand that if a government issues digital currency, it is just like fiat. Backed by the government. But this other?
Originally a "coin" is mined. The first coins mined were created by the inventor of the concept, Satoshi Nakamoto. Nobody knows who this person(or group) is, and they've since disappeared from the online space (for 10 years now).
Anyways, they triggered the "genesis block" which created the first 50 bitcoins.
After the coins were generated, they began to be traded. They were entirely worthless by comparison to USD, and were often given away just to generate transactions. With each trade, a new addition was made to the ledger that keeps track of transactions (the blockchain). To ensure all transactions are legitimate, the blockchain is verified by users called "miners". They run complex algorithms on their systems to solve equations which resolve and verify the blockchain. When they successfully complete a "block", they are rewarded with a quantity of bitcoin. This is how the currency is now generated. The federal government prints money. Bitcoin generates new coin through blockchain validation. The difference is, the protocol only allows for a maximum of 21 million coins to ever be created. This is controlled by the reward being halved ever 210,000 blocks verified (~every 4 years). This is why there is always a constant push for improvement in mining computers. Miners want to maximize their rewards by completing more and more blocks. Eventually there will be no more coins to reward, and mining will just transform into a validation system with miners getting "fees" for their efforts. The last Bitcoin is expected to be mined some time in 2140.

When it comes to dollar value, that's where you can start to think of these as "stocks". People can trade USD for equivalent Bitcoin based on the current market value, just like stocks. This is controlled by the apparent value of the coin in the marketplace. If demand is low and selling is high, the price drops. If demand is high and selling is low, the price increases. This price is available in all kinds of fiat currencies, as well as other coins, at an exchange rate.

In the truest sense of use, the bitcoin (and most digital currencies) were intended to be used in a manner wholly disconnected from any fiat currency in the world, and even disconnected from precious metals. It was intended to be its own currency, with all transactions happening with the expectation that a bitcoin represented a certain value, but not a "dollar value". "This sandwich is worth XX Bitcoin."
This has been drastically muddied by the investing market that saw an opportunity to make big money in USD by trading in BTC(Bitcoin).
Now people largely think of these coins as having a USD value because that's often how people get into it. They buy on an exchange with their own USD.
If I walked up to you and offered you a fraction of a digital coin for your wares, would you accept it on faith, or would you want to know how much USD it represented? See the problem? As long as we treat them as their USD equivalent, they'll never truly be their own marketplace currency.

But that's exactly what we do with dollar bills... Inflation shows us that "this sandwich is now worth XX USD", and we grumble that we have to give more for it, but we don't think "how much more is that in gold/silver?"
The fraudsters that separated us from the gold standard did a masterful job of disconnecting us from that thinking (and the finite resource it represented), and we barely realize it anymore.

Nobody "owns" an entity supporting Bitcoin. People just own the currency and transact with it. Some on exchanges swapping it for other currencies, some on illicit sites swapping it for illegal goods/services, and some just using it for everyday things where it's accepted. There is a fractional representation of Bitcoin, honorably known as the "satoshi" after the inventor, and you can think of these as small denominations of the larger "coin".
If you could conduct your daily life in only BTC, you wouldn't care what the USD equivalent was. Only when you must cross-transact does it become an issue.

When it comes to the government creating its own digital coin, who knows what half-baked, sadistic, or outright baffoonish decisions they would make in it's generation/control.
But its creation doesn't matter as much to me as what they could do if they hold the digital keys to all digital accounts...
 
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Discussion Starter · #19 ·
Found an article discussing the difference between any normal cryptocurrency, and this idea of a central bank controlled digital currency.
It also outlines some potential misuse/abuse of such a system. (oh but that would never happen.... no, never)
 
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Discussion Starter · #38 ·
The Federal Reserve is once again bringing up the idea of the "US CDBC".

Eyes open folks. Watch for legislation. That will be the death knell.
 

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Discussion Starter · #40 ·
The buzz is now that this could happen by the end of the year.
Put as much or as little faith in this article's claims as you choose, but it should certainly be on everyone's radar.

Have a plan.
 
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Discussion Starter · #42 ·
I've heard the same chatter. December is the final due date of the report. I don't think they'll be able to pull off the entire change by then unless it's been in place for quite a while and tested.
It requires legislation at the very least, and I've not seen any proposed.
I'm hoping this is just wild speculation at this point, but I'm sure this is coming eventually.
 
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