The value of bitcoin has seen notable increases in recent months as interest in the uses and potential of cryptocurrencies spreads like wildfire.
However, central banks and other government authorities in some parts of the world are skeptical or unconvinced of the potential that bitcoin holds, with some enacting policies against cryptocurrencies.
The real estate market is really the mechanism by which private banks create digital currency every time they issue a loan.
If the banks haven’t sold enough of the toxic assets like they did during the last financial crisis then it exposes the banks’ balance sheets for what they are.
The future economy will be propped up by non-debt-based money created by the Central Bank with a non-inflationary mechanism for de-leveraging the economy.
There will be a re-packaging of global debt and toxic assets. The current economy is over leveraged. The financial system is over leveraged. Individuals are over leveraged with maxed out credit cards, student loans and all sorts of debts.
Corporations that use the debt capital market to push up the stock market and governments that are moving towards the modern monetary theory-style economy where everything is funded by quantitative-easing (QE) stimulus will stop.
Banks—traditionally seen as “too big to fail”—may face a scenario where they will no longer be bailed out. National banks may make a play on Central Bank Digital Currencies (CBDC) where three scenarios could take place.
When Central Banks issue money to citizens, they are gifted with data about their behavior. State-backed digital money could come with certain conditions that allow governments to push through with draconian policies.
In December last year, China’s central bank moved to restrict its banks from using bitcoin as a currency, citing concerns about currency and financial stability, and law enforcement. It stopped short, however, of issuing an outright ban.
In South America, Bolivia’s central bank in June 2014 banned any currency or coins that were not either issued by or regulated through the government, a move essentially made in response to the growing popularity of cryptocurrencies.
That said, it is not all doom and gloom for cryptocurrencies.
There are other institutions and individuals in the establishment related to fiat currencies, monetary policy-making, financial governance that see potential in cryptocurrencies. Could this be a shift in balance in the financial world as we know it?
The reset may upset the global world order. If more people distrust the American dollar, which is currently pegged to the world reserves, we may see a shift to Asia, in particular, China.
More importantly, the Great Reset must come with better outcomes for the planet, its people and it must allow people access to technology.
The world needs to take the opportunity to distribute wealth fairly and governments must ensure private sector companies do not take advantage of the level playing field.
Herbert R. Sim / ABC Flash point News 2021
