Taps Coogan – May 29th, 2022

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Kyle Bass, founder of Hayman Capital Management, recently spoke with American Thought Leaders’ Jan Jekielek to describe the dystopian project of the ‘Digital Yuan,’ a Central Bank Digital Currencies (CBDC).

 

Some excerpts from Kyle Bass:

“One of the things that the Chinese Communist Party did (during the Olympic Games) was to… use the e-Yuan app and force them to use it as their payment system while in Beijing… (China) can definitely force it on their own population, but their goal in this global rollout of the e-Yuan is multipronged… They really want to lessen their dependence on the US Dollar. 87% of global transactions that China settles are settled in Dollars. They’re desperately short food, they’re desperately short energy, basic materials. They have to go buy these things everyday around the world and nobody trusts their currency and they still have a closed capital account… They are trying to export the Chinese tech-stack into everyone in the developed West and East.”

“This isn’t a simple payment app. This is an app that tracks where you are, what your name is, what your social security number is, what all of your identifiers are. It has geolocation ability. It also gives a direct line from the Chinese government to an individual outside the prevue of law enforcement, outside the… oversight of banking regulators… They have the ability know what your bank account is, what it looks like, what your income is, and if you’re in financial difficulty. Imagine if they could cross-run an algorithm that says ‘lets look for US government employees that have Tinder, that are short of cash, maybe they are married, and we can corrupt them immediately… It’s a way they can export their digital authoritarianism… I think it is the single largest threat to the West in the last 50 years…”

While we agree with most of the lines of critiques – though not always his domestic political observations, on the e-Yuan, Mr. Bass has lost the plot.

People in the US or Western Europe are not going to be using the e-Yuan as a payment platform. I struggle to imagine the sequence of events that would lead Joe Schmo in Montana to use a Chinese payment app denominated in Yuan to buy his groceries.

The real threat presented by the e-Yuan is that the Federal Reserve is lobbying to introduce the same thing in the US. The authoritarian nature of the e-Yuan is not unique to China’s Central bank Digital Currencies (CBDC), it is the fundamental raison d’être of CBDCs. The essential point of creating a CBDC is to give a central authority the ability to see every transaction made with the platform in real time, who made the transaction, where, when, and if the authority so chooses, add or subtract from people’s accounts, block transactions, freeze assets, apply interest rates, cap deposit levels, apply different interest rates to different deposit levels, etc… all while circumventing traditional legal pathways.

Whenever the Federal Reserve talks about creating a ‘Digital Dollar,’ regardless of what empty platitudes they put forward about caring about your privacy, remember that the entire point of creating a CBDC is to create a centralized, nationalized payment system with the aforementioned ‘features.’ Whatever limits they impose on those features for your privacy will be applied at their discretion and not by design or default.

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