Fedcoin: The U.S. Will Issue E-Currency That You Will Use

The U.S. Federal Reserve will not only issue its own cryptocurrency but will also make sure Americans use it. That’s the prediction of currency guru Doug Casey who has an uncanny record of being correct about economic and political trends. His latest book, Surviving Fedcoin: How to Protect Yourself (and Profit) from America’s Coming Currency Change, is a public bet that the U.S. government will issue its own bitcoin which Casey views as “the last arrow” in its money quiver.

How will the dynamic play out? He speculates,

“To start with, I suspect it’s going to be a parallel currency. Perhaps usable just within the U.S. which, in effect, would be a form of foreign exchange controls even more effective than the inability of Americans to open up foreign bank and brokerage accounts today [due to monetary control through FATCA]…I think it’s a near certainty that they’re going to do something like this and soon.”

Also read: China to Play a ‘Leading Role’ in Bitcoin’s Future

Fedcoin

fb521c2678Fedcoin refers to cryptocurrency and/or protocol established by a central bank. National banks could forge their own ‘bitcoin’ with comparative ease and bitcoin consultants have sketched possible scenarios on how.

In “Some Thoughts on Fedcoin – a Fed backed cryptocurrency” (March 9, 2015),  Albert Szmigielski suggests, “[T]he Fed should premine all the currency that they want to issue on a blockchain….A premine happens where all (or part of) the cryptocurrency is issued in the first block, the genesis block. Then the Fed would just exchange the fedcoin for a dollar each.”

In the article entitled “Fedcoin” (October 19, 2014), J.P. Koning speculates, “The Fed would create a new blockchain called Fedcoin. Or it might create a Ripple style ledger by the same name. It doesn’t matter which. There would be an important difference between Fedcoin and more traditional cryptoledgers. One user—the Fed—would get special authority to create and destroy ledger entries….The Fed would…provide two-way physical convertibility between both of its existing liability types—paper money and electronic reserves—and Fedcoin at a rate of 1:1.”

Koning draws upon the work of mathematician and economist Sina Motamedi for “a more technical explanation for how this would work in the case of a blockchain-style ledger.” Motamedi advises, “The simplest way for a central bank to create its own crypto-currency is for it to fork the Bitcoin protocol into a new protocol that is unchanged in every way except that, going forward, the central bank would set and adjust the block mining reward at its discretion…. [L]ike paper currency, the central bank’s crypto-currency would be both decentralized (in transaction) and centralized (in supply).” 

Doug Casey
Doug Casey

Discussions have been encouraged by the attention governments are directing toward Fedcoin. When the Bank of England released a paper (February 2015) that addressed the subject, the bitcoin-processing company Payment21 was not alone in asking, “Bank of England: Why might central banks issue digital currencies?”

In America, similar scenarios occur. In June 2016, central bankers from 90-some countries met behind closed doors in Washington D.C. and conferred with bitcoin experts. Federal Reserve Chair Janet Yellen opened the conference, which included the International Monetary Fund, the World Bank and Bank for International Settlements.

Adopting blockchain as a protocol to facilitate bank transfers was the focus but issuing ‘official’ digital currencies was actively explored. Adam Ludwin, CEO of the blockchain company Chain, delivered a speech entitled “Why Central Banks Will Issue Digital Currency.” Ludwin urged governmental attendees to use the revolutionary shift to create new assets for themselves.

[T]he medium of money has only changed a few times in history, from precious metals to bearer currencies to now our ledger-based electronic systems. Bitcoin and blockchain represent a transition to a new medium. This transition is often referred to as distributed ledger technology….But I find it more helpful to look back to bearer instruments, like banknotes, to appreciate what this new medium enables: a digital bearer instrument.

A key argument for Fedcoin is the perceived need to stabilize a cryptocurrency by pegging it to traditionally-issued money. The pegging would not necessarily be voluntary. Motamedi explains, “just like what happened with paper currencies, central banks will eventually step in to create their own crypto-currency protocols and forbid the use of any others. For simplicity, let’s call the central bank crypto-currency protocol BitDollar. Of course, these BitDollars would always be redeemable in regular dollars by the central bank, at least at first.”

Koning is more blunt. “Now is the time for the rebels to figure out how to create a stable-price version of bitcoin, before Darth Vader does it himself. Otherwise they may someday find themselves closing down their bitcoin startups in order to write code for the Empire.”

The Why Of It According to Casey

Doug Casey addresses America’s central banking system but the circumstances favoring a U.S. Fedcoin are mirrored throughout the Western world.

He doesn’t buy the stability theory. The U.S. government is bankrupt with liabilities far exceeding assets. Casey explains,

Social Security is bankrupt… Forty-seven percent of the people in this country are net recipients of money from the government… Officially, one-third of all the US government’s assets are student loans; little-known fact. About $1 trillion worth of them.

The greenback is semi-stabilized by being “the world’s money” but its privileged status is being shaken by nations such as China and Russia who aggressively seek alternative mediums for global commerce. Casey believes that yesterday’s monetary controls – quantitative easing and interest rates at near zero or below – cannot sustain a bankrupt dollar with waning global relevance. Yesterday’s methods are “going to come to an end….What can they [the feds] do?”

What the feds can do is cryptocurrency; Fedcoin is what’s coming to a start. And, according to Casey, the primary benefit to government would be a centralization of supply and a transparency of demand (or transactions), which could centralize control of the economy to an unprecedented extent.

Why would people use the cryptocurrency? Fedcoin would almost certainly emerge as a parallel currency which would be adopted due to government requirements for its use in paying taxes or accessing entitlements such as Social Security. Increasingly, however, Fedcoin would become a tool to push toward a cashless society because physical money provides a privacy that prevents government control.

Casey observes that the feds,

like to blame a lot of the problems on a lack of transparency, but with blockchain and the Fedcoin technology, they can see everything, everywhere. So it’s complete transparency ….Without cash, you have no privacy. If you have to put everything through a bank account, the government knows exactly what you’re buying, what you’re selling, how much you are earning. They’re in complete control; able to take what they want…including your entire account if you become politically undesirable.

Fedcoin would give the government God-like ability to track wealth. The justification will be to prevent criminal activities such as drug dealing and money laundering.

cryptodollar
Will the U.S. create a Fedcoin?

Counter-arguments can be easily made; for example, most black or gray market activities are peaceful and not properly criminal. But Casey focuses on the harm inflicted on the prosperity and freedom of average people. “[P]eople that are dealing in what’s called the underground economy are actually providing useful goods and services,” he observes. “[I]f the government extracts its 30 or 40 percent in taxes, which they will be able to do now with Fedcoin, [that] is going to hurt the economy, not help it. It will help the U.S. government, but that’s different from the economy in America.” The government would grow richer.

It would also become a more powerful engine of social control. In terms of privacy, Fedcoin could become the anti-cash. “If I’ve got a $100 bill in my wallet or a bunch of 10s and 20s,” Casey explains, “I can spend them on anything I want with anybody I want and nobody knows. With blockchain….[the feds] know exactly who’s getting the money and what it’s being spent for. It can be programmed [perhaps through a mechanism simiar to smart contracts] so that certain transactions can’t take place….So you are pretty well blocked in.”

Fat people could be prevented from buying sugar; gun owners could be cut off from ammunition; teenagers could be banned from buying beer, cigarettes or video games. The possibilities seem almost infinite. In doing so, Fedcoin would merely extend existing policies under food stamp programs that prohibit spending on alcohol, casinos or strip clubs. The efficiency would be so much greater, however, that the difference of degree would become one of kind. The government could “prohibit anything without even passing a law….If your Fedcoin smartphone or chip isn’t programmed to let you buy that, how are you going to get it?” Politically controversial items, like a gun registry, could become irrelevant.

One of Casey’s dystopian predictions seems doubtful to me, however. It is the idea that many or most Americans would embrace being physically “chipped.” But, then, I may simply have more confidence in average people when it comes to recognizing their own self-interest.

The Shadow Of Solution?

Casey likens the potential currency revolution to the Industrial Revolution. The technologies developed then gave unprecedented freedom and literally ‘life’ to the common man; the human life-span and population increased dramatically.

Bitcoin and blockchain are equally liberating to the individual but revolutionary technologies also challenge the status quo. And, so, entrenched powers attempt to co-opt their use.

Whether governments will succeed is not clear; they may be thwarted by their own incompetence or by the intrinsic decentralization of cryptocurrencies. It seems clear, however, that governments will make the attempt. And when they do, the best response is a better technology that sprints forward and leaves those who wish to ‘tame’ it coughing on its dust.

Those on the cutting edge of technology are today’s freedom fighters.

What do you think about the U.S. government creating a ‘Fedcoin’? Let us know in the comments below.


Images via Shutterstock, and Pixabay. 


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Wendy McElroy is a Canadian individualist anarchist and individualist feminist. She was a co-founder of the Voluntaryist magazine and modern movement in 1982, and has authored over a dozen books, scripted dozens of documentaries, worked several years for FOX News and written hundreds of articles in periodicals ranging from scholarly journals to Penthouse. She has been a vocal defender of WikiLeaks and its head Julian Assange.
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  • why bother

    I think decentralized currencies will win.

    • I hope very much that you are correct and — in even quasi free market conditions — I believe it/they will prevail. Even without the free market, I’d bet on decentralized currencies.

      My problem is that I also believe in Doug Casey’s strong hunches. He has been a good friend for decades and he is betting against cryptocurrencies, at least, in a sense. He has always had reservations about bitcoin but seems to have become more favorably inclined over time. His “betting against” is more based on his prediction of government activity, IMO, than on doubts about bitcoin’s viability. The crypto-maneuver would be a game changer in a game they are most decidedly losing.

      I think a battle is coming that will be disruptive, destructive whichever wins. The dynamics could be similar to the U.S. government’s attempt to drive out private currency in the 1800s or it could be quite different. Unfortunately, as different as the ‘tech’ of currency now is, the government tends to use much the same methods as it did centuries ago.

      • why bother

        I enjoyed Doug Casey’s perspective from way back in the early 80s myself, though I disagree with him on his advice to not own gold in the USA. In fact I do think the wisdom is to have ten percent of your assets in physical precious metals and 1% in cryptocurrency. I do think he is right that the Feds will come up with their own cryptocurrency. The war on cash, and the respectability of blockchain technology. I am a software developer with fifteen years of work in cryptography software and I am very interested in bringing forth decentralization technology. I successfully completed the first of three side projects in software and each increases the anonymity of the user of the software. I am an old idealist but I am having fun making it real!

        • Martin C

          thank you Wendy for encouraging decentralisation. It is our only hope.

      • Brad R

        Like you, I’ve come to have respect for Doug Casey’s ability to foresee trends. Did he elaborate on his prediction of “government activity” contra Bitcoin? I can see the feds (a) creating an alternative (Fedcoin) and creating incentives/obligations for its use; (b) banning the use of Bitcoin and other non-state cryptocurrencies, and/or (c) using their formidable resources to completely track Bitcoin transactions. Casey clearly seems to be expecting (a); has he given any indication that (b) or (c) might also be impending? (Or some other (d) that I haven’t considered?)

        • Martin C

          I agree Brad. Altho in the end crypto is here to stay and bankers are becoming obsolete.

      • Martin C

        well basically the govt will try to enslave us with their fedcoin and total control of money and of course going cashless but they absolutely positively without any doubt whatsoever can not ever ever ever stop us from using cryptocurrencies and there will always be exchanges like localbitcoins that can never ever ever be stopped so F U bankster bitches come get my bitcoins if u can. This is war on freedom and I say F U fed

      • Martin C

        btw I love doug casey but bitcoin can never be stopped . I expect it to be totally outlawed under penalty of death but still it will thrive in the black market. They can’t stop tens of millions from using the internet to be free

        • cassanoa .

          you only hope bitcoin cant be stopped – but bitcoin has to flow through the internet infrastructure and governments control the territory that infrastructure resides in – governments can make laws enforced by federal agents that govern how that infrastructure works – internet lines – banks – corporations can all be regulated and the coin its self can be outlawed – the government can declare non sovereign digital currencies illegal and not to be accepted as payment under penalty of law – if you own it but you cant use it or trade it – what good will it be ?

          • Martin C

            there are now a number of companies creating decentralised internet platforms like maidsafe or Mysterium. Yes I expect bitcoin to be outlawed at some point by the elite but there are now many decentralized exchanges that are peer to peer so it will still exist and be traded/exchanged. People have no problem breaking bad laws to preserve their wealth and freedoms from tyrants. In WW2 people preserved wealth by hiding diamonds in their butts. Encryption/Digital assets are saving us from cashless globalist one world plan. I have hope the freedom will prevail over tyrant bankster elite traitors.

          • cassanoa .

            the elite are not just in the united states – they are in Scotland where maidsafe is also – mysterium must be new because a google search keeps showing a video game ? dont you see how stupid and weak this is – the global elite own the banking system and run governments – they will not have their power to tax and print money or own gold taken away from them – just look at whats being attacked and you will see what they fear – the other day – HBO was struck by a hacker attack and the hackers wanted millions in BITCOIN as payment from HBO or they would release HBO content onto the net for free – see whats happening ? bitcoin will be called criminal because its being used as the method of payment – i know and you know that the same can be done with cash – but the elite are doing this to raise the profile of bitcoin ( because only people like us ever heard of the crap ) in a negative situation and second – to make a case that the exchanges facilitate criminal activity and need to be regulated and investigated or shut down

          • cassanoa .

            your right – the elite and bankers are traitors and they will use crypto currencies to run their cashless society – i believe that they are testing the whole concept out with bitcoin and when they get the answers they need – they will shut everything down and start their own – the only wild cards are China and Russia – they will not go along with western system and will introduce Eurasian gold backed cryiptos – the west will have to follow with gold backing or accept second place – its all the lovers of the mythical decentralized currencies that are helping the cashless society become a reality – we already have a peer to peer system called cash and barter that work – why do we need a cashless digital currency ? oh yes – because its modern and the other junk is for cavemen and millennial are just so fucking sophisticated and advanced – actual cash is trash right – you guys really swallowed the blue pill and are gonna be the largest victims of the NWO – you guys are unwittingly working for the bankers – they love cashless digital – you love cashless digital – see the connection ?? you can trade bitcoin for cash peer to peer ( face to face ) but only one will be useful on the streets until they phase paper cash out – then you will only be able to trade bitcoin peer to peer but will not be able to legally spend it – it almost make the whole thing ridiculous – we worry more about the cash than we worry about what its for

          • Martin C

            no one can shut down the internet without destroying the elites assets. As long as there is an internet there will be anonymous encrypted money.

          • cassanoa .

            why do you think the internet has to be shut down to stop bitcoin ? all you have to do is shut down the places that trade in it – they will start with the exchanges and then fine the merchants who accept it – throwing cold water on the fire

          • Martin C

            it is NOT POSSIBLE to stop the exchanging of bitcoin for fiat It is totally and utterly impossible beyond any shadow of any doubt because there are decentralised exchanges and places like localbitcoins that hook up two people. There are face to face exchanges of cash for crypto. As far as merchants that is true it may be that stores will be forced to stop accepting crypto publicly but as a store of wealth crypto can never be stopped.Also it has to be done worldwide if the USA goes full Hitler (which I fully expect i to and I have left the USA because of this belief)and other countries do not then how hard will it be to trade on an exchange in japan for example. Answer =not very. In fact I bought almost all my bitcoins from Mt Gox a Japanese exchange and uncle sam could not have stopped me if he wanted to.

          • cassanoa .

            well if two people want to exchange bitcoin with each other – no one can stop them but all the united states cares about is what happens in US territory – those bitcoin will be useless in the US economy and any lawsuits will not be recognized as a legal transaction – and you also have to consider that when such a heavy blow happens – it will dramatically effect the price of any CC – remember – the exchanges are not decentralized – they are facilities that hold computers to run operations or offices to do the same – some of the exchanges are corporations under USA jurisdictions and the government can do what ever they want to anything in its territory – just think logically – do you believe these exchanges exist in cyber space ? for the sake of argument – the united states also has authority to signals entering the united states through communications channels and can block or shutdown those channels to who ever they want – you really underestimate government power – remember – the united states government invented the internet

    • T L

      How can decentralized currencies win? They don’t own entire countries and politicians, who will write law, out right banning bitcoin and every other decentralized crypto out there. If you hold bitcoin, you might as well be holding lit dynamite..

      • why bother

        Explain to us how a government ban on Bitcoin would be any more effective than a leftist putting a sign in his front lawn “this is a gun free zone.” I want to see if you know any fact about Bitcoin. You don’t. So you write about a subject you don’t know and it only makes you look silly.

        • T L

          Effective? Easy.. They already track everything we do, say and read online. They attach stiff penalties, like fines and jail time to people using bitcoin, and bitcoin goes away.. You won’t be able to use it anywhere in the u.s which means it becomes useless.The minute Trump finds out Terrorists use crypto’s the gov doesn’t control to fund their activities, bitcoin is finished.
          The very fact the FED doesn’t control it, means its lifespan is going to be short. And believe me, I knew about bitcoin back at .75 cents in 2009 from someone called Cliff High who predicted it would become popular. He still holds that its going to be worth 20k in usd.. And he may be right. But once the Fed launches its own controlled blockchains and crypto’s, they won’t let decentralized crypto’s survive.. That is like Tony montana letting the coke dealers down the street keep operating and stealing his business, if just wouldn’t realistically happen.
          The only reason they let bitcoin survive this long is because they are studying it for flaws and exploits. Bitcoin was the perfect beta test for crypto’s.

          I also think this idea of virtual mining, or completing transactions in the block chain with GPU power, is the dumbest waste of resources in the world. Its just a matter of time before its outlawed.

          I think one of the main reasons its still alive is because the drug running CIA is using it to funnel money around to Isis and between cartels. Once the Feds get their own system, bitcoin will go away..
          You might have better luck holding Ethereum since the big banks are starting to back its block chain. But bitcoins won’t survive. That bubble is about ready to pop off..

          • Haliff Roslan

            they can prevent americans using bitcoins, but they cant stop the rest of the world

          • why bother

            So far I have been doing a study on apps for smartphones. I have downloaded several from github for Android. These are open source. I am a beginner at the Android ADK but have been doing some checking. Some nodes you send bitcoin payment transactions to are not in the United States. So essentially, I can use a Mycelium wallet and if I have someone’s QR code scanned in or if I have their bitcoin address I can send a transaction to them – without any bank knowing. And without any government knowing. So I can go out on the street with my smartphone and mycelium and buy things directly with bitcoin as long as someone is selling for bitcoin. No government involved.

          • Martin C

            well if we can still buy ETH and other cryptos then the elite have accomplished nothing in stopping us from hedging and storing our wealth from the banksters and the govts they control. The genie is out of the bottle,crypto anonymous crypto is here to stay. They can’t ban it or ever ever ever stop us from using it. People will risk 30 years in federal penitentiary to make huge returns. They will ban bitcoin and make it punishable by much jail time but like tax evasion they will be almost 100% bluff.Only a handful of peopl go to jail every year for not paying taxes.That is out of 30 million nonfilers. Same with crypto. How can they stop localbitcoin type websites or p2p decentralised exchanges. They can’t. It will be like wack a mole. They are way behind we are way ahead.

          • T L

            They will shut the hubs down where you buy crypto’s.. They will make using it to buy anything illegal. It will go away. ACChain is just the start..

          • Martin C

            complete and utter nonsense. Crypto will CRUSH bankster bitches. It can never ever be stopped in a million years. They won’t shut down squat because we can always access cryptocurrencies via uncensored internet which exists now in the TOR network and soon even more clever ways of maintaining an uncensored internet. Just research decentralized internet and wake up to freedom from the excrement psychopathic banksters who currently run the world and are crapping their pants over crypto. Checkmate freedom wins. I am researching acc chain but there is no way to stop anonymous nonbeastmark money. Have balls and resist tyrants and if you are religious don’t ever take the mark of the beast and have the guts to RESIST TYRANNY. Sure they will outlaw bitcoin and crypto but that is the thing you must have the balls to break the law.If you don’t you are a gutless coward. Man up and be a man for a change or if you are a woman have courage to resist Hitler.

          • Martin C

            sure btc can be tracked but not zcash monero etc. The govt is way way behind in tracking crypto. Anonymous transactions are easily happening. I have no faith in these fundamentalist christian preachers . I studied the bible for 30 years and my belief is they pretty mush have no idea what they are talking about.

          • Martin C

            I bought millions of dollars worth of bitcoin back in the day. I know what I am talking about after reading thousands of articles about bitcoin.

          • lordteapot

            rotfl, libtard.

      • Julio Rick Rodriguez

        Them politicians might just have there own stash already!

  • and to asure 100% anonimity we will use for example that one 😉 you see we are jsut laughing since 2009 of their tries and tries to slave us bacl into their corrupt and greed humangenocide system 😉 it is enough people it is time to get rid of them , it is enough for us all in an ecoligical way ;).

    one of the lot of possiblities 😉 :

    like is said , for more information feel free to contact me 😉

    Hasta la Revolution

  • IT IS TIME TO GIVE BACK TO THE PEOPLE THERI DEMNITY & DECENTRALISED SYSTEMS ARE THE KEY

    • I have always been a fan of decentralization which, if carried to its logical conclusion, means decentralizing down to the level of the individual. The non-simple part of the dynamic, of course, is that the elite never willingly part with power.

      • Hello,
        i love your intelligence very nice, your post as well. I agree 100% with you that violence is not the way this why we use things like decentralised oayment systems 😉 like Coinpay as presented and are trying to gie back to people their demnity but also to learn them to stand again on their own feets and don’t get under in this world, because one think is for sure the ruling class doesn’t want you to be smart , or to well informed and of course not united 😉 here comes the open sourse pool of BitClub in the game beause it was created once for the poor 😉 !
        I would love to have a live conversation with you about Blockchain and the real possibities and else what ever discusssion !
        Greetings from Barcelona

  • IF THE RULING CLASS WILL STOP INVADE OTHER COUNTRIES FOR THEIR GREED THERE WILL BE NO TERRORISM 😉 SO WTF GET RID OF THEM SO SIMPLE AND EASY BOYKOTING THEIR STUFF AND SYSTEMS AND DONE OTHERWHISE WE ALL WILL BE COLLATERAL DMAAGE OF THEIR INTERNATIONAL FINANCIAL TERRORISTICAL GENOCIDE SYSTEM

  • PBV

    The problem is that the cryptocoin world has yet to develop a viable currency. Bitcoin works as a digital version of gold, an investment commodity with limited supply, but its deflationary nature means that price stability can’t be achieved – it can never be used practically for salaries or commerce.

    If we don’t come up with a truly anonymous digital currency with a supply that increases (or decreases) proportionately to the transaction volume in commerce, then we will have left the prime space for currency open to the governments.

    • Privacy is primary. I am not sure freedom can exist without privacy any more than safety can exist without some means of self-defense. Re: using bitcoin for salaries, etc…well, I’m using it to some real extent to that end. Whether or not my use is “practical” (the word you use) is a matter of real debate, and not one I am confident of winning.

  • Robcoin, stealcoin, printcoin or fiatcoin I wonder which name they pick 😀

    • Fedcoin seems to be the leading contender — at least, in the articles I’ve read — but, then, most people do not have my reaction of grimacing at the sound of it. Indeed, those who would be willing to support federal cryptocurrency would probably feel reassured by the name.

  • Good morning all. I was away from my computer yesterday but I should be checking in regularly today and tomorrow. Thanks for launching the discussion!

  • I think even if the FedCoin come into play in the United Stated, and the hope of the government to have more control over his population. Alternatives will be there for his population to have the fundamental right to have privacy. By the way, very interesting article and I love your writing style.

  • Ghosty

    I think the only way they will bring any amount if trust into their centrally controlled ecoins is to be tied to the free bitcoin in some way… Like a side chain… If all governments used bitcoin as their reserve, priced against it like gold, and allowed people to move money to and from the bitcoin chain then they might have a chance… If not… People will simply adopt bitcoin and make them irrelevant… Lol

    • Ghosty, it will not require trust; if it did, the scheme would be disaster from the get-go. For centuries, governments and their de facto agents have forced people to use specific currencies by making ‘bills’, like fines and taxes, payable in those currencies. This is what the East India Company did in Africa to get natives to use their otherwise worthless money. If it is illegal for you to NOT pay a tax and the tax is designed to be paid (or markedly to prefer payment in) cryptocurrency, then trust is irrelevant because you will pay up in order to keep out of prison.

      Having said that, I think many if not most Americans would be more (and not less) open to a cryptocurrency if it was issued by the gov. That may be a sad statement — and, frankly, I think it is — but it is not an unreasonable one. Anyone who posts on this forum (including me) is an outlier.

      • Ghosty

        Well you are right in that most people will follow where the government leads… Unfortunately those people have fallen victim to the decades of mainstream media brainwashing and in effect are lobotomized… Bitcoin doesn’t require trust… But I’m sure I’m not alone in saying I require trust from my governments if they want me to engage in whatever scheme they come up with to replace the failing financial system… People are waking up and the powers are shaking in their boots as well they should be!

        • tourismpics

          Great conversation. The masses are brainwashed beyond saving and will likely welcome this FedCoin garbage, and those that don’t won’t have a choice just like the past when government douches bags flexed their muscles. It’s like don’t pay taxes, get fined or jailed. Don’t use FedCoin, can’t pay bills, etc. Hope I am wrong and bitcoin continues to stick it to the man. Fuck the feds.

    • Ghosty

      And although countries will have ridiculous capabilities for capital control within their borders, the fact that people have an out with bitcoin will keep those controls within reason… It’s their only chance to make their centrally controlled digital currencies work… But regardless they will be fighting an uphill battle because trust in any centrally controlled bank or government or media is at an all time low… And that’s not even taking into account the reduced security of a centrally controlled currency… Meh… It’s bitcoin for me all the way… My mama always used to say all you can expect from a pig is a grunt and the system is rife with pigs and corruption and greed… Governments want to use money to control instead of free the people, religion is all about control… The future is decentralized… Humans need to be taken out of the picture as much as possible and replaced with trust less systems! Go bitcoin…

  • Han Solo

    The one danger for the governments. This move would totally legitimize e-currencies in the minds of the general public, and get them comfortable with the idea of using such a thing.

    It would then open the door wide open for another non-centrally controlled alternative like bitcoin to take over.

    • Yes. That’s the main advantage of such a move: credibility. If bitcoins and other alternatives become threats to a Fedcoin (by any other name) then the alternatives will probably by hobbled with a use-tax or be banned. Black markets do and will exist but jail terms will as well. I’m not a pessimist about bitcoin — as evidenced by my leaning toward buying and maintaining more — but I think people need to realize that the Wild West days of cryptocurrency may be drawing to an end and strategies of safety should shift. I want my people to be safe. And, yeah, I think of bitcoiners as my people even though *I* may not deserve that inclusionary status because of how technologically naive I still am. I just see the political vista of freedom so clearly.

  • gdp

    Wendy — Thank you for a sobering but highly informative article. Once again, it appears that the Feds will exploit “Legal Tender” laws to maintain their monopoly-control of the “money supply,” and thereby their direct control of banking, and their ham-fisted indirect attempts to control the economy.

    One thought that occurs to me is that if the Feds “pre-mine” a necessarily fixed number of all possible “FedCoin” blockchains before releasing “FedCoin” at a “pegged” rate, they will be severely limited in their current ability to “Expand the Money-Supply” in an attempt to “Inflate Away” Federal debts or to “Stimulate the Economy” via their current swindle of “Borrowing New Currency into Existence.” The only way I can see for them to attempt to “Inflate the Money Supply” would be to keep nearly all of the “pre-mined” blockchains in some form of “Digital Escrow” that would forbid making ledger-entries into these “escrowed” blockchains, and only release the “escrowed” blockchains on those occasions when they decide that inflation is “desirable” (to them, if not “The Public”).

    There is also the question of how a fixed number of “FedCoins” will affect the “Credit Industry.” According to some estimates, on the order of 90% of the “US Dollars” currently in circulation were not “borrowed into existence” by the Fed, but were instead `created’ out of nothing by consumer-credit corporations such as CitiBank. In a digital economy dominated by a fixed number of “FedCoins,” it’s not immediately obvious to me how “consumer credit” might work; would the banks and credit agencies have to “borrow” FedCoins from the Fed so that their customers could use them for transactions?

    Again, thanks for a sobering but informative article.

  • Misha Rogov

    Blockchain tech is a great gift to the governments, perfect tool of control. Give it to naive people together with a dream of freedom and they will do a perfect job improving it till it’s ready to become their own cage. So, who is Satoshi Nakamoto?

    “Now is the time for the rebels to figure out how to create a stable-price version of bitcoin, before Darth Vader does it himself. Otherwise they may someday find themselves closing down their bitcoin startups in order to write code for the Empire”

    What if they were writing the code for the Empire from the very beginning?

    Read this:
    https://qz.com/838589/chinas-central-bank-is-hiring-blockchain-experts-to-help-it-kill-off-cash/
    https://www.cryptocoinsnews.com/blockchain-digital-currency-india/
    http://norberthaering.de/en/home/27-german/news/745-washington-s-role-in-india#weiterlesen
    http://energyskeptic.com/2017/nicole-foss-negative-interest-rates-and-the-war-on-cash/

    Time to realize how little time we have to do the revolution

  • Fritz Knese

    After what India has done to its people by eliminating some cash on the pretext of catching tax cheats, it would not be surprising for the US government to use a similar argument forcing us into a cashless society. Actually this situation is an argument for less technology for high tech is power and the government can afford the technology to screw the rest of us!

    • Lou

      Yeah the getting rid of cash to prevent crime is such an OBVIOUS joke. Do criminals use a toilet; do they eat; do some of them go to church. Yep eliminate toilets, food and churchs and you can eliminate crime.

      India is a test case and it has failed miserably unless success for the Bankers is an economy which IMMEDIATELY plunged and a totally pissed off population. BUT this may be exactly what the Bankers want.

      • Fritz Knese

        Note that the Indian Politicians seem to have sold the people on the BS!!!

  • Jason Miller

    incredibly well written piece

  • This isn’t an unlikely scenario at all, but FedCoin would exist along with a bunch of free market cryptocurrencies that the government can’t do anything about. I think we will have currency competition… and that’s not a bad thing. I don’t think FedCoin would be any kind of death knell to Bitcoin or any other private currency.

  • Hi Wendy,

    “Fedcoin: The U.S. Will Issue E-Currency That You Will Use”

    I like Doug Casey and this is not directed toward him or any other individual. It’s about a certain view of world.

    I am personally leery of all predictions, especially when no time is specified for the predicted event. I only make one kind of prediction and, so far, my predictions have been 99.9% correct. My only predictions are about other predictions and always that the prediction will fail. My prediction for Fedcoin is, “it will not happen anytime in the next five years.”

    If anyone predicts it will happen in the next 10 years, I’ll revise my prediction to, “that won’t happen either.” I’m still waiting for one global warming prediction to be true.

    There is one fact that I believe everyone is ignoring. The Federal government never ever gets anything right no matter how many technological experts it hires. How is it doing in the predicting and protecting against terrorism department?

    Randy

    • Hi back at you, Randy. At the risk of introducing an unrelated and hotly controversial issue…I am a global warming/climate change skeptic when it comes to the man-made connection. So, yeah, I haven’t seen predictions come true for something for which I’ve seen no evidence whatsoever to begin with. And I’m still waiting on that pot of gold from a leprechaun. 🙂

      I don’t take it as a slap at Doug that you are skeptical. But (unlike climate change) there *is* considerable evidence that the feds are preparing to float a cryptocurrency. It may be a wretchedly inefficient currency, as you suggest, but when has that ever stopped a government program. One word: Obamacare. Efficiency is not the goal. Control is.

      • Fair enough, Wendy. If it happens, it happens. In any case I don’t think it will be something the Feds can spring on us without warning. I’ll be delighted to have one of my counter predictions proved wrong, but not necessarily this one.

        “Obamacare Efficiency,” indeed! Ha ha.

  • Great article, I believe Doug Casey highlights the importance of what this technology is capable of and why people should really take this seriously…

    I recognized this early on in 2010 when I first started to research Bitcoin and the blockchain…

    The thing people must realize is that the underlying technology surrounding Bitcoin is just a piece of this amazing phenomenon but how it is used is even more critical…

    The reasons this technology exists in the first place is due to corruption and greed within the financial systems and governments of the world and RIGHT NOW the people have them by the balls and we need to fast forward this technology and ensure that the technology stays on the right side of humanity because these bastards are not going without a fight and they will stop at nothing to co-opt this technology for their own purposes and as the article explains this will not be good for humanity, so people need to quit with all of the bullshit and get things in gear before we and our kids do wake up one day in a nightmarish Orwellian “1984” reality…

  • tricky

    good luck with that LOL

  • Pump&Dump Alts

    That sounds like some dark age scenario. I can’t even imagine the Chinese government implementing a currency such as this, let alone the USA. Also how exactly do they intent to ban the Bitcoin and other crypto-currencies ? I mean they can ban it in the USA but not all over the world. I don’t think this is how things will go down. If they really do, then poor kids. They are up to a second dark age for sure.

  • Jeff Cauhape

    Don’t block-chain style currencies prevent arbitrary monetary inflation? If so, why would the Fed go that way when the Congress needs the Fed to create money out of thin air in order to pay the bills? Am I missing something?

    • jp

      pretty simple to make changes to the blockchain reward when they control 100% of the processing power on the fedcoin network. that would allow them to create money at will. they can at least do arbitrary positive inflation. Deflation poses some odd challenges but modifying their blockchain to arbitrarily spend or delete coins is fairly simple

  • Martin C

    this fedcoin is only the beginning. beastmarkworldcoin will come later. Cashless is slavery for mankind. bitcoin may become illegal but will continue to thrive in the black market when the beastmark system is in place.

  • Kevin Pope

    Unchecked Capitalism and corruption run amok are driving us rapidly toward Fascism. Trump has only accelerated it by putting CEOs in all the top positions and going to gut financial regulations. The last time this happened, was in the 1930’s when the economy completely collapsed. They said it would never happen again, but it will. Plus the government in that kind of condition will want to be able to completely control people through money. Oh, you were at a protest? We’ll just drain your bank account as a punishment. Oh, we don’t like business X because it’s cutting into the profits of our buddy on the Board, so we’ll stop you from being able to spend it at that store. The government is absolutely trying to take complete control of us. We will be worse than Russia in the 1940’s not much sooner.

  • David Booth

    Well this is the way its going to be the BIBLE or GODS, word has told you of this happening in the in of time and it is upon us for this is the generation that all thing will come to pass the TRIBULATION PERIOD ,in the books of EZEKIEL,AND OF REVELATION., REVELATION means the unveiling or the uncovering of the word of GOD..YES folks its upon us its all taking place just as you have been told of all things so now is the time to get right with your maker if you have not done so its all on you if you miss the boat !!

  • Alex Rieger

    I wonder why no one seems to be asking the right questions:

    1) What if Bitcoin is a “Trojan Horse?”

    2) Why, after 8 years, do people still believe that the anonymous “inventor” of Bitcoin – who goes by the fictitious name of Satoshi Nakamoto – is some obscure genius nerd living off the grind somewhere in Australia or New Zealand, and just put Bitcoin out there as a gag ?

    3) Why aren’t people looking at Bitcoin, in terms of Occam’s Razor ?

    4) What if Bitcoin is actually a creation of the global banking aristocracy – the BIS, and the IMF – as a kind of “Beta-Test” to both collect operational data on the use of this concept as currency, while also conditioning people to the idea that such a “currency” is a viable or even superior alternative to REAL Sound Money ?

    5) Why don’t the people who fully understand the ramifications of a totally “cashless society” — “smell a rat” when it comes to Bitcoin ? Remember as you read my following blog article, that – “if something sounds too good to be true — it’s because it IS too good to be true.”

    http://www.chase-the-rabbit.com/blog/-the-cashless-society-the-end-game-and-the-end-of-individual-property-rights

  • Lou

    We trusted government to protect us from “terrorism” we got 9/11

    We trusted government to protect us from disease with “vaccination” we got Autism

    Money is a STORE of VALUE.

    I trust government to provide VALUE as much as I trust them to stick a needle in me or “protect” me from just about anything.

    Bitcoin was designed to eliminate government as a provider of anything. Having the FED provide the coins is by definition a PERVERSION of Bitcoin. But what is new.

    Be sure to remember to get your “flu shot”

  • come-and-take-it

    Barter.

  • James Leonard

    The biggest drug dealer in the world is the CIA. So a cashless society is sold to us to curtail drug dealing? So apparently, the CIA needs a cashless society to be able to track the CIA and this is why we need to give up our freedom. What am I missing here?

    • Lou

      What am I missing here?

      The Bush and Clinton Crime Families?

  • vajraman

    People will go where is makes sense and I think that is the decentralized options. People don’t trust governments to set this up on their best interests. Just like they try to control the net while the decentralized net is being born. Technology will win over their incompetence. They fought encryption too. But, we have it in our daily lives now.

  • vajraman

    The Fed already has a digital money ‘printing press’. In other words, nothing is printed. THIS idea is for tracking you not for evolving the system from debt money to real money based on value, ideally LABOUR, not gold. This was Germany’s greatest crime: Basing money on WORK DONE, not gold in the vaults of the ‘money changers’. This is how Germany put 6 million back to work in a couple of years and scared the living shit out of the banksters. The rest is history, but not exactly as relayed in Hollywood movies. After all, name me one movie that highlights the 8 million dead Germans DURING the war and the THIRTEEN MILLION killed AFTER the war? Send me a link to watch this movie, IF you can find one. 🙂

  • Greg

    wonders why any citizen would be in favor of some thing that appears to be so dangerous. If you control a persons income you will have complete control over the citizenry without ever having to enact any laws to give gov’t the powers this system would give.

  • David Green

    all of this is one hundred percent predicted in the Bible! FACT

  • K.Darian Lavelle

    The so called “Federal Reserve,” is owned and operated by an “International Private Bank Cartel,” established in 1913 in the dead of night and is responsible for all of the mayhem and Wars ever since. Now they control almost everything and everyone of Political, Finance and resource importance. Our so called Government along with others around the world are controlled puppets to keep the masses ignorant of this huge deception and completely under the Banksters control. They are certain to stop at nothing to maintain their criminally attained power, and unfortunately most people are too oblivious of the reality to even begin to know how to organize and take back the rights that the Constitution of the US is supposed to protect. We lost our Country well over 100 years ago and while there are some who think cryptocurrencies will liberate us from these criminals, the reality is that the Banksters will infiltrate and regulate and manipulate any and every threat that Technology presents and nothing short of an “Anarchist Direct Democracy Cooperative Revolution,” will bring back Our Freedom from the Tyranny of the Oligarchs. In other words they will pass Laws to force people to use their “Fake Digital Currency,” that they control and outlaw the truly decentralized and privacy based cryptocurrencies.

    • tourismpics

      I agree. Hope this undesired outcome doesn’t come to fruition. Fuck the system. It is bought and paid and the source of misery on planet earth.

  • Gold Coins. Nuff said

  • StealthStang

    This was a very interesting Article concerning Crypto-currency, I just started last year in 2016 with “OneLife/One Coin”, I had heard of Bitcoin but at the time its Blockchain had been Hacked Twice and that it was associated with the Drug World and other Illegal Activity!

    I did pretty good with OneCoin and now there is a new player in the Crypto-Currency World called Pro-Currency aka Pro Coin. They are partnered a company call iPro-Network aka IPN and they are based here in the U.S.A.! When I started with them their Pro Coin/Pro-Currency was worth .04 cents per coin and now it is worth about .14 cents per coin!

    Meanwhile after reading this Article, it reminded me of what the Bible says in the Book of Revelation about a 7yr. time period called the “Tribulation”! During this time there will be a World Leader referred to as the Anti-Christ aka the Beast! At a certain time during the 7yr. period he is going to make every Human on earth to receive a Mark in their right hand or in their foreheads and no Man will be able to buy or sell without that Mark!…Read Revelation 13:16-17 (KJV) for more Detail info.

    As you know the Bible has Never been Wrong when it comes to Predictions!…God Bless!

  • Seth Taylor

    My question is… what is the driver? Why would the masses say it’s a solution? Why would we change what currently works?

  • Sheri

    But couldn’t governments around the world easily destroy confidence in cryptocurrencies by buying billions of dollars worth… waiting for investors to get in… cash out and continually keep the market volotile… then later introduce a new crypto (that’s really theirs) and pretend to adopt it due to its popularity. I’m not saying it will happen, however, I am saying if they wanted to they could manipulate the market to their advantage because they can invest billions and attract users to that particular countries bit-currency. Just saying…

    • Martin C

      yes that is true but they would have to spend billions to do it and that would be made public most likely and people would avoid that coin. as far as introducing a currency that is “theirs” well if it is open source it will not be theirs.

  • Boyd Stone

    Remember when they tried to ban booze? It was called Prohibition and it created crime and did no good.

  • JO89

    This will never happen because people wouldn’t put their money in government controlled coins. We have already learned our lesson with flat.

  • cassanoa .

    dont you see what you have done ? – coiners have given the government the excuse to clamp down on everything – with all their money and power – there is no doubt that eventually government will win – you arrogant fools have ensured your enslavement and ours

    • Martin C

      no we are brave patriots and you are a sheep that claims resistance is futile. We will win we are winning . Stop asking us to cooperate with Rothschild you Fing traitor

  • cassanoa .

    the best scenario we can hope for is that bitcoin is stopped ( making them happy ) and they dont make their own block chain and it ends there – the only reason i can think of that they might not want their electronic currency traceable is because they would have to hide all their corruption – you guys really screwed up bad with this bitcoin garbage – your greed has made a cashless society possible – that means total freedom and anonymity is gone thanks to bitcoin – great job

    • Martin C

      That is the most absurd post on bitcoin I ever heard. Cashless was possible before bitcoin it is called wire transfers. We are scheduled to go cashless by the elite but thank God for bitcoin the salvation of mankind because it enables us to completely bypass the demonic banksters and govt altogether.

      • cassanoa .

        lol – you really believe that you can bypass the system – not gonna happen

        • Martin C

          we have been bypassing the system since I got involved in bitcoin in 2011. No govt has been able to stop anyone from buying and selling bitcoins or storing or transferring them. Now there are hundreds more cryptocurrencies and decentralized exchanges popping up all the time. A you a paid troll for the banksters? you sound like one. To give btc users a hard time and saying give it up resistance to the elite is futile. Well let me just put it this way you guys can have our bitcoins when you pry them from our cold dead hands or more accurately after you have tortured us for hours to get our passwords. That is about the only way you guys are gonna stop us from using crypto to protect against the scum that infest our world known as the bankster cabal elite deep state pieces of floating excrement. They are becoming OBSOLETE. We don’t need no stinking banksters telling us what to do with our money so they can bail us in when they feel like grabbing our hard earned money. How much are they paying you to write this crap ? Crypto wins checkmate.

          • cassanoa .

            first of all relax jackass – i have been truly decentralized for years – i own gold and the bankers hate me as much as they hate you – just because i point out the weaknesses of shitcoin dos not mean i am a troll – it seems that anyone having a contradictory opinion is called a troll especially by the millennial libertarian retards – for the love of Christ your like little children – and for your uninformed information sonny boy – quantum computers can crack the blockchain security in minutes from what i have heard – and who owns quantum computers ????? banks and governments – just the people your gonna be up against – dont you get it – the reason things are the way they are is because we have not found a better system that actually works – just a simple question – if we lived in a bitcoin world – there would be no need for banks right ? later on if you wanted to buy a nice car or a house – how would you do that ?? where would a regular person get the money to buy a house – who would lend him the bit coin and why would anyone lend you such a large sum for no interest – how would interest work in your bitcoin world ?? do we just ride our bikes everywhere and live out of our backpacks ? think before you speak

          • Martin C

            I see you are getting increasingly insulting cassanova. That doesn’t help you make your case against bitcoin which you call shitcoin. There is no evidence that quantum computing can somehow crack bitcoin and if and when it can I believe a geek will come up with a solution maybe quantum coin. ok so what else does cassanova say to scare people away from crypto and that resistance to the elite is futile? Now he says if we lived in a bitcoin world people would not lend their bitcoins,well that is absurd because there are already sites that will do that. the free market will provide. BTW no one said we need or will be able to ever get rid of govt mandated money but there are now alternatives where we cant have our money inflated away or confiscated at the whim of big brother who you seem to work for or at least you are doing a damn good job of sounding like a bankster who wants to trash bitcoin and scare people into staying with the outdated non crypto world..

  • Enrique Hoyos

    I like cryptos, but the community is borderline Bretibart news and Alex Jones; conspiracy theories abound. Brankrupt is when you are in debt and have no job and no way of repaying. The US is in debt, but has really well paying job. The biggest economy in the world and growing. One sign: bonds interest rates almost 0, even when the fed is reselling its current holding of bonds and almost deflation (which is worse than inflation; just ask Japan). Cryptocurrencies will work side by side with fiat currencies. Govt will never, ever, let this get out of hand. Even less the US. Like a said before, they rather kill the internet, than letting that happen. I think the beginning of controlling cryptos is rollback of net neutrality rules, then slow lanes to access wallets, exchanges, etc.

    • Martin C

      they can not slow many wallets and there are decentralised p2p exchanges,plus they would have to shut down these things worldwide. No govt on earth can stop dedicated people from diversifying into crypto

  • John

    Mhmm, ill buy gold the minute they issue Fed Coin.