The economic effects of the billions of dollars lost due to FTX’s collapse are starting to be felt, and the digital dollar is one of them.
The lesser-known news item stemming from FTX’s collapse may be CEO Sam Bankman-arrest. Fried’s Politicians will fail to understand the significance of the company’s substantial political contributions and instead push for easy fixes to difficult problems. In the end, the failure of the cryptocurrency corporation might result in strict federal controls and the creation of a national “digital dollar.” Under normal conditions, the FTX issue wouldn’t be significant enough to force through such drastic banking and financial reforms, but it is obvious that the Federal Reserve and many members of Congress have been drooling over such reforms for years. This can be a fig leaf used to cover it up.
The economic effects of the billions of dollars lost due to FTX’s demise are starting to be felt. Private investors and cryptocurrency owners suffered significant losses when the enterprise failed. With almost 1 million customers, the similarities to other widespread collapses are plain to see. The criminal accusations against Bankman-Fried may provide a somebody to place blame on, but they do not provide a way to undo the harm. The biggest fiscal change since the Fed’s founding may be the proposed solution, though.
It might be quite easy to transition to a digital, cashless form of money under government control. Media outlets, including Wall Street Journal opinion writers, are promoting the “Digital Dollar pilot,” which the Fed and many large banks are currently operating. The Fed and other countries are working together to get ready for the electronic form of money. After all, if the United States doesn’t innovate, China or someone else will, so the reasoning goes. Some members of Congress have previously shown support for the idea, and FTX may have created the ideal conditions for a changeover to such a system.
Each person’s transactions will be virtually under their complete control with a digital dollar. This would go well beyond the $600 income threshold set by the Internal Revenue Service and could have a significant impact on taxation, earnings, and privacy. It is a dystopian nightmare to be able to instantly trace, categorise, and examine every person’s transactions. It is also possible that the IRS may issue audit letters to individuals for using Venmo to reimburse pals for their portion of a restaurant bill or cab fare, given the agency’s relative efficiency. Additionally, the introduction of the digital dollar is anticipated to coincide with the gradual eradication of paper currency. Small denominations or amounts may be kept, but if the changeover resembles Franklin Roosevelt’s Executive Order 6102, which forbade the majority of private ownership of gold, your financial autonomy would be at risk.
Who in Washington wouldn’t be in favour of abolishing paper money? There will be no shortage of politicians and commentators who will tout the benefits, which include the difficulties for criminals to purchase drugs and the end to local and international counterfeiting (which finances authoritarian nations like North Korea). It can also be used to monitor shady donations and purchases. Does it appear that you are purchasing illicit weapons or cocaine? You are monitored. The following time there is a demonstration, how about making a donation to the Canadian truckers? After all, it has occurred previously. Make a political donation to the “wrong” cause? Maybe someone leaked your information. All of these incidents have contemporary precedents in our nation, Canada, China, and other countries.
A digital dollar is presented by the government as a solution that will put an end to economic liberty. The federal government and state governments both provide important benefits. Instantaneous deposits of your Social Security, welfare, or wages would occur. Your bank accounts would be linked to the databases of the Federal Reserve, your travels would be followed through transactions, and you would start to count toward the Fed’s assets in the same way that digitally “printed” money does.
Think again if you think that such a concept is impractical or only likely to occur in the distant future. The Chinese regime used digital currency and its social credit system to fully understand the effects of social and monetary control over its population. The first digital currency in the world was introduced by China, and it has a number of alarming features. Its transaction history is confidential unless law enforcement requires it. More than 200 million individuals in China use the digital yuan, which just surpassed 100 billion yuan in transactions while being in its infancy. In addition, there is a very real risk that anyone on the Chinese government’s blacklist won’t be able to utilise money at all. We would be hesitant to imitate the model that China provides. However, more regulation and the recent crypto crash may say otherwise.
Democrats consistently manage to prevail in situations like the FTX collapse. A young, inexperienced CEO enjoys adoring media coverage, is allowed to donate to left-wing charities, and then his company dashes the hopes of a million investors. They can simply accuse him of making comparable, untraceable gifts to Republicans in order to throw doubt on his alleged heavy donations to left-wingers. Democrats can then utilise the circumstances they took advantage of to demand extensive regulation that will increase the regulatory state’s power.
Even if it may have been expected, FTX’s collapse was not planned. The vulture-like acts taken by individuals in positions of authority to profit from the catastrophe are both expected and intentional. Ultimately, to quote Rahm Emanuel: Never let a crisis go to waste.
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