Well, yes and no.
Before I expand on that answer and explain the impact central bank digital currencies will have on the more familiar world of foreign exchange, it’s helpful to say a bit more about what central bank digital currencies (CBDCs) are.
CBDCs are not cryptocurrencies. The CBDCs are digital in form, are recorded on a ledger (maintained by a central bank or Finance Ministry), and the message traffic is encrypted. Still, the resemblance to cryptos ends there.
The CBDC ledgers do not use blockchain, and CBDCs definitely do not embrace the decentralized issuance model hailed by the crypto crowd. CBDCs will be highly centralized and tightly controlled by central banks.
CBDCs are not new currencies. They are the same currencies you already know (dollars, yuan, euros, yen, sterling) in a new form, using new payment channels. They are a technological advance, but they do not replace existing reserve currencies.
CBDCs are currently being introduced by major central banks around the world. Countries are at different stages of deployment. China is the furthest along. They have a working prototype of a digital yuan that will be showcased at the Beijing Winter Olympics in February 2022.
If you’re there and want to buy tickets, meals, souvenirs or pay for hotel rooms, you’ll be expected to pay with the new digital yuan using a mobile phone app or other digital payment channel.
The European Central Bank has also moved quickly on a CBDC version of the euro. They are not yet at the prototype stage, but they have made material advances and are getting close to that stage. Japan and the U.S. are at the back of the line.
The Fed has a research and development project underway with MIT to study how a digital dollar might intersect with or even replace the existing dollar payments system (which is already digitized, albeit without a centralized ledger).
The U.S. is probably several years away from its own CBDC at best.
So, yes, the move toward central bank digital currencies is real. How does this relate to what is sometimes called The Great Reset? This would be the movement toward a single global reserve currency.
This movement would be nominally led by the International Monetary Fund acting as a kind of world central bank. Still, the IMF cannot make decisions of this magnitude without U.S. approval. (The U.S. has just enough voting power in the IMF to veto any material decisions it does not like).
In turn, U.S. approval would require a global consensus among major economies including China, the UK, Germany, France, Italy, and other members of the G7 and G20.
This desire to create true world money would involve the creation of a digital special drawing right (SDR). SDRs are issued by the IMF to member nations and may be issued to other multilateral institutions such as the United Nations...
- Source, The Daily Reckoning, read the full article here
