Digital Dollar Adds More Uncertainty in These Uncertain Times

Election disfunction could be dwarfed by debut of digital dollar and the rush to abandon cash

The seal of the Federal Reserve on a U.S. banknote. Mandel Ngan/AFP/Getty Images

Commentary

This season of uncertainty and disruption that we’ve endured isn’t over. Perhaps it has only just begun.

As we all have experienced, 2020 has been a year marred by the CCP virus pandemic, the chaos and destruction of global lockdowns, civil unrest from coast to coast, and tens of millions of Americans losing their jobs.

To say that this year has brought sweeping changes to the country and the world is an understatement.

Election Disruption

What’s more, we’ve just been through a national election that has resulted only in further uncertainty. Joe Biden is the declared winner at the moment, and even if that sticks, we’ll likely have a wider rift in the nation than before. Of course, should President Donald Trump be declared the winner, we can expect an even greater threat of civil unrest to follow.

But even if we don’t see an increase in those areas, for millions of Americans, financial ruin is already upon them. Both their high-paying jobs and their savings are gone. Many are working lower-paying positions. Better jobs may return at some point, but it will be some time before they do.

On the national level, adding trillions of dollars in Paycheck Protection Program (PPP) relief has also potentially added a new level of economic instability. Such huge levels of debt against the dollar could make our currency much less desirable, as is the case with many others around the world.

The Next Big Disruption

What other major disruption could possibly happen?

Enter the digital dollar.

The digital dollar is a central bank digital currency (CBDC) and is scheduled to be introduced into the U.S. economy on Jan. 1, 2021. Whether it does remains to be seen, but the date it comes about is less important than the fact that it will come about.

What will a digital dollar mean for the United States and the rest of the world?

For one, it will require that every American have an account controlled and monitored by the Federal Reserve, which will be the repository for all digital dollars. If that sounds a bit scary and an overreach of power and a loss of privacy, that’s because it represents all of those things, and more.

The driving force behind digitizing all currencies throughout the world is control and power. And in case one forgot, the central banks of the world already have tremendous amounts of both over most of the world.

Enter Universal Basic Income

In everyday terms, a digital dollar will more easily enable the institution of a universal basic income (UBI), which is basically a continuation of the PPP money in perpetuity. To some, such as former Democratic presidential candidate Andrew Yang, UBI is desirable and should be established. Indeed, in some places in the United States, such as Alaska, it already is.

The way it will work is simple. Essentially, there will be an account at the Federal Reserve for each and every American. The Fed will simply deposit money, whatever the amount may be, into those accounts on a designated schedule.

Or not.

The system is ripe for political abuse. Consider, for example, if the powers that be in Washington, D.C. don’t appreciate one’s political point of view.

Would one be deprived of payment as a disincentive to speak one’s mind? Would one’s ability to earn a living be blocked by the Federal Reserve, in a perverse version of China’s social credit system?

That’s not only possible, but at some point, quite likely.

Recall how effective the Obama administration was at unleashing the Internal Revenue Service against conservative groups, for example, or how conservative voices, opinions, and facts are suppressed or outright censored by Big Tech today. The power to not only censor political speech but also to impoverish the guilty as well would be embraced wholeheartedly by the statist left.

Enter MMT

The digital dollar also would ease the implementation of Modern Monetary Theory (MMT), wherein theoretically, nations can issue as much money as needed or wanted, without the consequences that come from debts against a currency. Again, from an operational standpoint, the PPP infusions have already “proven” that it can be done, with little impact (so far) of the enormous debt against the dollar’s value.

For all of this to manifest as fully as possible, it’s likely that the digital dollar would, sooner or later, replace cash. Cash, after all, means privacy. People who don’t want federal oversight on everything they buy use cash for just that reason.

That doesn’t mean they’re breaking any laws, which is the usual narrative against cash. But it does mean that people want privacy, which, according to the Constitution, is an American right.

But will that constitutional right stand in the way of moving the country to a cashless monetary system?

Probably not.

The cashless transition would be fine by those who see more centralized control as a good thing. It will also be favored by those who fear that cash is a vector for spreading the CCP virus, even though the chances of that are very low.

Nonetheless, it would seem that the digital dollar is coming soon, whether one likes it or not.

James R. Gorrie is the author of “The China Crisis” (Wiley, 2013) and writes on his blog, TheBananaRepublican.com. He is based in Southern California.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.