Rishi Sunak is the new Prime Minister of the UK. Sunak assumes the role after the abrupt resignation of his predecessor Liz Truss who was only in office for 44 days. The UK is still reeling from a massive selloff in the British Pound and GILT market which almost resulted in the insolvency of the UK Pension System.
Prime Minister Sunak recently gave a speech where he featured his plans to implement a Central Bank Digital Currency in the UK. Here is what he said:
“Today, I’m proud to say that under the UK’s presidency the group of the seven most advanced economies, the G7 is launching a set of public policy principles for retail, Central Bank Digital Currencies, CBDC’s. Central Bank Digital Currencies could be a digital version of money. A bit like a digital banknote that could be used alongside physical notes and coins. Unlike most of the digital money people use today, it would be issued directly by a central bank, like the Bank of England in the UK. And governments and central banks across the world are working together looking into what having a digital currency might mean in practice. This includes issues that people care about, such as ensuring users money would be safe and secure, that it could work with other ways to pay, would be energy efficient and available to everyone. A potential CBDC could offer businesses and consumers new ways to pay in the future. It’s all part of the wider story of digital innovation that has delivered benefits to millions around the world and in the UK. The decision on whether to launch a Central Bank Digital Currency is for each country to make, and no G7 jurisdiction has yet made that choice. These decisions raise important questions about the reshaping of our economy, financial systems and the way in which people interact with money and payments. That’s why working together and careful evaluation with our international partners is essential.
In the UK, earlier this year, I announced a new joint task force between the Treasury and Bank of England to look into a potential CBDC as a complement to cash in bank deposits.”
UK Prime Minister – Rishi Sunak
No sooner had this speech been made that online chatter began to brand Central Bank Digital Currencies as “Britcoin.”
Sunak In July 2019 was appointed Chief Secretary to the Treasury, having entered UK Government service as the Minister for Local Government in January 2018. In February 2020, he was appointed Chancellor of the Exchequer. What makes Sunak’s commentary worth pondering is that as a leader of a G7 nation he is confirming how digital payments technology will be used moving forward by governments.
I have listened to Prime Ministers Sunak speech numerous times to understand this fascinating new development. Notice how nowhere in his speech do you hear the words privacy, freedom, or transparency.
Central Bank Digital Currencies have up until this point been largely theoretical constructs. Fans and supporters of the CBDC feel that it is a way for governments to harness digital technology more efficiently and thus have greater impact and effect on the economy overall. Critics and opponents of CBDC’s argue that allowing a government total authoritarian control over money will decimate freedom, liberty, and privacy. The rights and privileges afforded in the Constitution of the United States and the Bill of Rights represent some of the most important protections for Americans. The Constitution establishes several rights, including the right to freedom of speech, religion, and assembly. It also protects Americans from unreasonable searches and seizures and provides for due process of law. The Bill of Rights goes even further, enshrining rights like the freedom of the press and the right to bear arms. Together, these rights provide a strong foundation for American democracy. They also serve as a check on government power, ensuring that Americans can live free from fear of oppression.
Central Bank Digital Currencies would permit central banks complete surveillance and control over all financial transactions, ultimately destroying any semblance of financial privacy. The power to censor opinions or behaviors with which bankers disagree could be implemented at a moment’s notice. Literally in one click.
Tweet something against the prevailing political narrative and your money can be turned off.
Consume a product not approved by the ruling class your money can be penalized or harshly taxed.
Support a product which has not received broad-based political approval and your money is forfeited.
In this regard, a CBDC presents the tool that tyrants wished they had to shape and coerce the behavior of all citizens.
In fact, the first message penned by Satoshi Nakamoto, the pseudonym for the individual or group of individuals who created bitcoin read “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” This message was a direct reference to the too big to fail philosophy which Satoshi hoped to prevent with BTC. The ideal enshrined in this message was the no government or entity should ever be considered too big to fail, and that sound money would prevent further government bailouts.
From a purely philosophical standpoint CBDC’s stand in strong contrast to free market capitalism. Austrian economist Joseph Schumpeter is best known for his idea of creative destruction, which describes the process of technological advancement and its impact on the economy. According to Schumpeter, capitalism is driven by innovation and entrepreneurship. He believed that new technologies and businesses would constantly emerge, leading to the destruction of old ones. This process, he argued, was essential for economic growth. While some people may view creative destruction as a negative force, Schumpeter saw it as a necessary part of capitalism. He believed that without it, the economy would stagnate and eventually decline. Today, Schumpeter’s ideas remain highly influential, and his theory of creative destruction is still widely used to explain economic change. How would these ideas be challenged through the adoption of a CBDC? Over the last 14 years we have witnessed all of the Too Big To Fail policies which have created and sustained zombie companies. These are businesses which are only in existence today because the government funded every aspect of their operations. When the automobile was created it destroyed the horse and carriage industry which further decimated the buggy whip manufacturers? It certainly appears that if an entity is politically connected that a CBDC could and would perpetuate enterprises that were neither viable nor needed and extend the failed policies of the TOO BIG To Fail programs.
While it is exciting to see governments catching up with the digital money technology that was unleashed by Bitcoin in 2009, the differences between the leading crypto and a CBDC are stark and worthy of your understanding. Furthermore, CBDC’s also appear to bypass commercial banks since they could direct digital funds directly to a business of individual.
Central bank digital currencies (CBDCs) are digital versions of fiat money, which is legal tender whose value is backed by the government that issued it. CBDCs are designed to be used by central banks to settle financial transactions between commercial banks and other central banks. But they can also be used by the central bank and the general public to make electronic payments, such as for goods and services or to send money digitally. Proponents of CBDCs argue that they have the potential to increase economic efficiency and reduce transaction costs than traditional payments systems. But if you examine the framework for CBDC’s you will quickly realize that they can easily become the ultimate mechanism for authoritarian rule. Whoever controls the digital click releasing or retrieving money controls a level of power which the world has never known.
At the outset recognize that CBDC’s are just like fiat money, meaning they are only backed by political promises and legal edicts requiring businesses to accept them as legal tender. CBDC’s are centralized meaning that there is a ruling class that controls and decides how they will be administered.
Although digital payments have been around for a while, the advent of digital currencies has made them even more convenient. With digital currencies, there is no need to carry cash or use a bank card. You can simply use your phone or other digital device to make payments. This can be very convenient, especially if you are making a lot of small purchases. However, there are also some drawbacks to digital currencies. One of the main concerns is that central banks will have too much control over digital money. If they can track and trace every digital transaction, it could lead to a loss of privacy and liberty. Another worry is that digital currencies could eventually replace fiat money altogether. This could have major implications for the global economy, and it is something that needs to be carefully considered.
Central bank digital currencies (CBDC) are really only digital versions of fiat money, which are legal tender controlled by a country’s central bank. They exist in contrast to cryptocurrencies, which are decentralized and not under the control of any one entity. This is vital to comprehend. CBDCs could be used to make online payments, as well as offline payments through brokers or digital wallets. They could also be used to store value, like a savings account. Proponents of CBDCs say that they could help to reduce crime, increase financial inclusion, and make it easier to transfer money around the world.
Politicians are usually excited about the prospects of launching and implementing a central bank digital currency system. They argue that such a tool is necessary and required to oversee an economy which is largely digital in nature. They see that sovereign states embracing CBDC’s are comparable to technology moving from an abacus to a calculator.
However, opponents argue that CBDCs will give Orwellian power to central banks, and that they will most certainly simply perpetuate inflation. If Central Banks were unsuccessful at managing an economy with an abacus, why should they be trusted with better technology like a digital calculator?
In April 2022, Sunak had announced a series of programs to turn the UK into what he called a “global crypto asset technology hub.” Among the progressive initiatives announced at the time was a rollout plan to integrate crypto stable coins into the national payment system, thus “paving the path for massive adoption of cryptocurrencies use in the UK as a recognized form of payment.”
What is also important to understand is that Prime Minister Sunak was not elected by the citizens. He is a former Goldman Sachs banker, World Economic Forum member, and his family is one of the largest shareholders of Infosys, the main company behind the infrastructure technology of Central Bank Digital Currencies.
Infosys is a global leader in consulting, technology, and next-generation services. Infosys is a publicly traded company with 345,000 employees around the world and a market cap of $76 billion.
With over three decades of experience in managing the systems and processes of global enterprises, Infosys claims that they expertly steer their clients through their digital journey. They do this by enabling the enterprise with an array of integrated services that work like one Infosys. These services span the entire digital spectrum – from designing and developing new digital experiences to running and optimizing existing ones. This is reflected in their business practices as well as in their products and solutions. They have developed a blockchain platform that will help central banks issue central bank digital currencies (CBDCs) and manage digital payments. Their blockchain platform is being used by central banks around the world to prototype CBDCs and “BRITCOIN.”
It remains to be seen whether CBDCs will be adopted on a widespread basis, but they are certainly an intriguing possibility for the future of digital money. As we have written about extensively over the last few years, the very definition of money is occurring at a breakneck pace today.
CBDCs have been gaining in popularity in recent years, as more and more countries explore the possibility of issuing their own digital currency. Currently, there is no single global standard for CBDCs, so each country’s central bank has a lot of flexibility in how they design and implement their CBDC.
CBDCs can be used in a variety of ways, depending on how they are designed by the central bank. For example, some CBDCs may be used only for interbank settlements, while others may be available for use by the general public.
One of the most common ways to use a CBDC is through a ‘digital wallet’ that is linked to your bank account. When you want to make a payment using a CBDC, you would send the funds from your digital wallet to the recipient’s wallet. This process is like how payments are made using other digital payment methods, such as cryptocurrency or e-money.
Central bank digital currencies (CBDCs) are an emerging type of digital money that hold promise for increased efficiency and stability in the global payments system. However, they also pose a threat for those unprepared to adapt. While there is still much work to be done in terms of developing global standards for CBDCs, this is an area of interest for many central banks around the world. As such, we can expect to see more countries launching their own CBDCs in the coming years.
Bottom line: What does all this mean to you as a trader?
Technology is changing the definition of money, price, and value. Pay Attention. Change is happening faster and faster. This is either a tremendous opportunity for traders and investors or a threat, unlike anything that has ever been seen before.
One hundred years ago, the telegraph was the cutting-edge technology of the trading industry. Operators used Morse code to send messages back and forth between offices, and traders relied on telegrams to receive essential information about prices and shipments. The telephone changed the industry in the early 20th century, making it possible to have real-time conversations with distant colleagues. Computers revolutionized the industry in the late 20th century, giving traders unprecedented access to data and allowing them to make split-second decisions with the click of a mouse. Today, we are on the cusp of another major shift: the transition from analog to digital trading powered by machine learning, artificial intelligence, and neural networks. New technologies are emerging that allow traders to buy and sell assets with the confidence of big data analysis. At Vantagepoint A.I. we are the industry leaders in this new era of trading, technology will continue to play a transformative role in the industry. It is how we “EMPOWER TRADERS DAILY.”
In the world of trading, it is NEVER about how much money you make when you are right. It is always about how little you lose when you are wrong.
Nobody likes losing money. But your long-term success will completely depend on keeping your losses manageable.
Here’s the secret to trading success in ONE simple sentence.
“Manage your risk, or it will manage you!”
Traders are bombarded with tons of information every day.
As a trader, one of the most important realizations you will have is recognizing you need to be tuned in to the PRICE ACTION and REAL DRIVERS that are affecting the markets you are trading. That is rarely portrayed in the form of reporters’ stories about what they think is happening in the economy, the market you are trading and the world. Since we live in a global marketplace the critical factors that affect a trader’s portfolio lie in recognizing and understanding the key drivers of an assets price. All markets are statistically correlated in some manner. Artificial intelligence, machine learning, and neural networks focus exclusively on these relationships to create very accurate forecasts.
Most traders constantly bewilder themselves by trying to relate the top news stories to their trading decisions
Do you ever read the headlines in the media and wonder how it is going to affect your trading?
- COVID-19
- Trade War with China
- New Government Regulations
- Unemployment Forecasts
- Currency Instability
- Debt Growth
- Recession Concerns
- Negative Interest Rates
How do you make sense of it all? How does it affect your portfolio?
You need to discern what is important and what is not. Every moment there appears to be an infinite amount of new data entering the marketplace.
The questions and concerns can be endless, and the amount of time required to get answers can be overwhelming. In other words, every trader needs to be focused on where is the risk and where is the reward?
But just doing that alone is never going to make you proactive.
The ultimate question that has eluded traders until now, is how do you find the most profitable opportunities?
Here is your link to register for theArtificial Intelligence LIVE online training that can change your financial future. During this online webinar we will show you how artificial intelligence with neural networks focuses on finding the strongest trends and then finds the best move forward by keeping you on the right side of the trend at the right time.
Successful traders are obsessed with finding solid trends.
How good are you at making decisions?
What has your performance been this year?
What’s Your Best Chance to Make Money in The Financial Markets Today?
The Answer A.I. Offers Will Surprise You. Intrigued?
You too can start finding the best trend at the right time regardless of your experience.
After all, a.i. has beaten humans at Poker, Chess, Checkers, Jeopardy and Go. Why should trading be any different
Intrigued? Visit with us and check out the A.I. at our Next Free Live Training.
Discover why Vantagepoint’s artificial intelligence is the solution professional traders go-to for less risk, more rewards, and guaranteed peace of mind.
It’s not magic. It’s machine learning.
Make it count.
IMPORTANT NOTICE!
THERE IS SUBSTANTIAL RISK OF LOSS ASSOCIATED WITH TRADING. ONLY RISK CAPITAL SHOULD BE USED TO TRADE. TRADING STOCKS, FUTURES, OPTIONS, FOREX, AND ETFs IS NOT SUITABLE FOR EVERYONE.
DISCLAIMER: STOCKS, FUTURES, OPTIONS, ETFs AND CURRENCY TRADING ALL HAVE LARGE POTENTIAL REWARDS, BUT THEY ALSO HAVE LARGE POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THESE MARKETS. DON’T TRADE WITH MONEY YOU CAN’T AFFORD TO LOSE. THIS ARTICLE AND WEBSITE IS NEITHER A SOLICITATION NOR AN OFFER TO BUY/SELL FUTURES, OPTIONS, STOCKS, OR CURRENCIES. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED ON THIS ARTICLE OR WEBSITE. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.