By Nick Giambruno, chief analyst, The Casey Report
“The U.S. needs a digital dollar… The U.S. dollar has to keep earning that place in the global payments system. It has to be better than Bitcoin…”
These are the words of Senator Tom Cotton during a recent Senate Banking Committee meeting discussing the “Digital Dollar.”
Regular readers are well aware of the elites’ desire to move away from physical cash and towards a Digital Dollar.
It’s clear there is an effort by some of the most powerful people in the world to bring about a cashless society.
A Digital Dollar is coming – and soon.
The Digital Dollar would enable a cashless society, which is a totalitarian’s dream. It’s precisely the opposite of how a free society should work.
The government would have complete knowledge of – and control over – every transaction you make. If you’re disobedient, they would be able to turn off your ability to transact at the push of a button, or they could charge your account.
At that point, governments will have almost unbreakable control over the individual.
And we can already see how they intend to sell the Digital Dollar to the public…
A Hidden Agenda
We know politicians never let a crisis go to waste.
In March, Congress made it explicit. That’s when the Digital Dollar first appeared in a bill that Nancy Pelosi introduced.
The idea was for the Federal Reserve to create and manage a centralized digital currency to facilitate COVID-19 stimulus payments. Every US resident was to get a Digital Dollar Wallet that they could manage on their phone and which the Fed could deposit stimulus money into.
While the Digital Dollar provision didn’t make it in the final version of this bill, it has reappeared in other legislation and in the recent Senate Banking Committee meeting.
The government wants to give away more “free” COVID stimulus money, and they’ll say they need a Digital Dollar to help them do it.
After all, many people who were supposed to receive stimulus checks earlier this year did not, and the government sent up to $1.4 billion to dead people. The government claims it needs a Digital Dollar so it can more efficiently distribute this money.
Who will turn down a “free” $2,000 per month, as the latest Digital Dollar legislation calls for?
The truth is, once people become accustomed to receiving money from the government, it will be politically impossible to slow down, much less stop.
It’s like the cheese in a mousetrap. It’s there to entice you into accepting the Digital Dollar and cashless society, and all the horrible things that go with it.
But there is a silver lining…
A Trojan Horse
Here’s the bottom line. Despite all the hype, a Digital Dollar is nothing but the same fiat money scam with a new label on it. It’s old wine in new bottles.
Thanks to the Digital Dollar scam, the government will have a new powerful tool to confiscate and redistribute wealth.
But a Digital Dollar is going to introduce and familiarize millions of Americans on using digital currencies. And it’s only then a matter of time before they discover Bitcoin.
Remember, Senator Cotton said a Digital Dollar “has to be better than Bitcoin.”
It’s an explicit recognition of Bitcoin’s superior monetary properties, which Cotton correctly thinks threatens the dollar.
The reality is that a Digital Dollar and Bitcoin are entirely different in the most fundamental ways.
You need the US government’s permission and blessing to use the Digital Dollar. Bitcoin is permissionless.
The US government can (and will) create as many Digital Dollar currency units as it wants. There can never be more than 21 million Bitcoins, and there is nothing anyone can do to inflate the supply more than the predetermined amount in the protocol.
The US government can censor transactions, freeze, sanction, and confiscate Digital Dollars whenever it wants for whatever reason. Bitcoin is censorship-resistant. No country’s sanctions or laws can affect it.
There is no privacy with the Digital Dollar. If you take certain steps, it is possible to maintain privacy with Bitcoin.
In short, the Digital Dollar is a pathetic attempt to compete with Bitcoin.
But at the same time, it’s an excellent Trojan Horse for Bitcoin.
It doesn’t take much imagination to see that once the US government inevitably inflates the Digital Dollar, censors transactions, freezes people’s accounts, and confiscates funds, it will push people to look for digital alternatives, first and foremost – Bitcoin.
A Digital Dollar could be an enormous catalyst for Bitcoin adoption.
Bitcoin Is Bigger Than Any Government
You might be wondering, “But couldn’t the government just shut down Bitcoin if it is going to compete with the Digital Dollar?”
Remember, unbreakable cryptography secures Bitcoin.
Further, Bitcoin has no central authority and no single point of failure.
It’s impossible for the US government, the Chinese government, or any government to kill Bitcoin. They would have to shut down the entire internet everywhere in the world and then keep it off.
The cat is out of the bag. Bitcoin is bigger than any government.
Others have asked, “Well, if the government can’t shut it down, won’t they ban it?”
First, the idea that the US government would want to throw peaceful people in cages for using Bitcoin is an insult to anyone who values personal and financial freedom. It would be a sign that much worse things are coming, and I would suggest leaving the country if such a thing happened.
Second, if the US government tries to ban Bitcoin, it would be an explicit recognition of its value and threat to their control of money. Governments wouldn’t bother banning something that didn’t matter. That’s why I would consider it an enormous stamp of approval if a bunch of bureaucrats tried to ban Bitcoin.
Third, in any case, banning Bitcoin is impractical. Think of it like this. Look at how successful governments have been at prohibiting cannabis over the decades. Despite their best efforts, cannabis has always been readily available in most big cities. Trying to enforce a prohibition on Bitcoin would be much less practical.
I’d like to see governments try to ban it and then fail spectacularly. It would be a volatile ride, but in the end, a massive reinforcement of Bitcoin’s value proposition.
Here’s the bottom line. The US government cannot stop Bitcoin. They are going to adopt a Digital Dollar in the misguided belief it will help keep the US dollar competitive. But that’s unlikely to happen for the reasons I just described. It will backfire and cause more people to go to Bitcoin.
That’s why right now is the perfect time to take a serious look at Bitcoin.
But if you really want the best chance at protecting your hard-earned savings from the government’s moves… I urge you to check out my special briefing. I go into all the details of a Digital Dollar… and how to guard against this underhanded cash grab.
Chief Analyst, The Casey Report