China and Russia: Full Steam Ahead Towards a Cashless Society - Rory Hall (17/10/2017)

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October 17, 2017

We reported back in November 2016 – Cashless World: 1 out of 3 People Never Use Cash – fewer and fewer people understand the importance of using cash to protect themselves from an overarching government warlord. At the time, China’s use of digitized currency was growing at about 40% per annum. This means millions of people each year freely hand over their cash and opt to use their cell phone, online currency transfers or a plastic debit/credit card to make 100% of their purchases. We see this as nothing short of happily going into the gulag of digital enslavement.

Today we learned China is taking another step toward being a cashless society. Not just any cashless society, but the largest populated nation on the planet. Please keep in mind this announcement is coming on the heels of China’s closest ally, Russia, announcing she would be issuing a crypto-ruble – Which is a digitized currency as well. Once these two nations go cashless that will be a huge blow to hard currency in circulation around the world.

Yesterday, Cointelegraph reported that local news sources in Russia had been informed by the Minister of Communications, Nikolay Nikiforov, that President Putin has approved a plan for the issue of a “CrypoRuble.” There was no detail, however, on timeline and no any subsequent confirmation that we’ve seen. Coincidentally, or not, Nikiforov is quoted as saying “I confidently declare that we run (sic) CryptoRuble for one simple reason: if we do not, then after 2 months our neighbors in the EurAsEC will.” Source

As ZeroHedge reported

In a story that seems to have gone largely unnoticed by the western press, the China Daily reported that the PBoC has successfully designed a prototype that can regulate its future supply of digital fiat currency.
In a report, “PBoC inches closer to digital currency”, the newspaper stated that China’s central bank “has completed trial runs on the algorithms needed for digital currency supply, taking it a step closer to addressing the technological challenges associated with digital currencies, according to a top official associated with the project.”

China’s has been preparing for digital currency since 2016. In June this year, the PBoC “finished several digital money trials involving fake transactions between it and some of the country’s commercial banks.” Given over-invoicing of imports and the shenanigans in the shadow banking/WMP sector, we suspect that the commercial banks took to these trials like proverbial flies to feces.

The China Daily article goes on to suggest that, while there is no timetable, “China is likely to become the first country that would deploy a digital fiat currency.”

Far be it for us to question the accuracy of the China Daily – which Wikipedia notes is often used as a guide to Chinese government policy – but we were expecting Sweden (already the world’s most cashless society) to be first. It has been widely reported that the introduction of an “e-krona” is being investigated by the Riksbank. Forbes noted last month that “The inquiry is expected to be finalized in late 2019.” It would not replace cash, which accounts for 1% of transactions in Sweden according to a recent BBC report, but operate alongside physical cash initially.

So…while China expects to be first, it will be “some time before the currency goes public”. According to Di Gang, a senior engineer of the Institute of Digital Money at the PBOC, a number of concerns need to be solved like “managing risks and improving efficiency.” He added that “the government also needs to factor whether the public would use the currency.”

We know the answer to that.

Yes, although it would be much quicker if Chinese citizens could somehow use it to get their savings out of the country.

Back to the serious work of the PBoC’s Institute of Digital Money. Yao Qian, the director-general no less, said that the successful simulation of money supply had paved the way for the central bank to become the future sole regulator and policymaker governing the value of digital currency. That sounded like a veiled explanation for the recent heavy-handed clampdown on Bitcoin trading in the Middle Kingdom. Indeed, the story notes that “ Unlike Bitcoin or other digital money issued by the private sector, the digital fiat currency has the same legal status as the Chinese yuan” Source

This sounds like a rebuttal to bitcoin and other privately issued cryptocurrencies and a way for the Chinese government to begin the process of outlawing private cryptocurrencies. It’s not just another major step in moving to a cashless society, it’s a major step in attacking cryptocurrencies as they continue to gain notoriety

We have been arguing these totalitarian governments, like China, the U.S., Russia and most other governments, are not going to simply hand over the mechanism that produces their power and control. We are now seeing the first real steps by a major government to maintain their control and power through the issuance of currency. If the people want to enslave themselves through the use of digital currency why wouldn’t the government be on board with that idea and fully assist the citizens in their desire to willingly hand over their sovereignty?

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October 19, 2017 at 6:11 PM
Rory, May I suggest you actually spending a little time understanding blockchain and cryptocurrencies. From the points of your article, it's clear that you don't really understand what is going on. Has China been successful in outlawing bitcoin or any decentralised cryptocurrency??? Has Venezuela??? Or Russia??? Pray tell, how are they going to do that? What are they going to attack? The exchanges??? Or maybe the wallet makers since within six months you'll be able to exchange cryptocurrencies in a peer to peer manner. Or maybe the corrupt officials who are making their fortunes off of cryptocurrencies will stop the miners in one country from mining bitcoin and of course, people across any border could not mine cryptocurrencies to make money as well. Yes, Rory the infrastructure to prevent bail-ins and control of people's lives is already in place, hundreds of billions are being invested in it, people's creativity is invested in it but yet you think that governments are going to somehow stop it??? Again, I reiterate my original point. Learn about blockchain, decentralised applications and cryptocurrencies.
October 20, 2017 at 1:30 AM
The cattle follow each other off the cliff. Given a choice between dumb and dumber, choose c, to learn. GDP is from last year becoming the other variables this year added to this years g. Its all debt, with nature as the controlled collateral, until nature object. The debt is funnelled into software monopolies implementing automation to prop up the markets to keep the accounting pension fantasy going. The snake eating its own tail. Kdoe
October 20, 2017 at 1:34 AM
Time, productively employed, is money. Debt is a waste of time, the point of legacy, kicking the can.
October 20, 2017 at 10:40 AM
The socialists will turn anything you build into a weapon. All bridges are temporary. Careful what/when you show them. Go ussa.
October 20, 2017 at 10:55 AM
They always turn the warehouse invoices into a bank, and end up with nothing in the warehouse. Labor only accepts cash, which is why they only have employee specialists and no labor. In this case, cash is the tobacco and fiat, pm and crypto are the invoices. Only time, productively invested, is money. The moment they reengaged family law, america became a socialist country. The rest is symptoms. Better to learn AC than crypto, unless consumption is the goal.
October 21, 2017 at 1:33 PM
Capitalism and socialism are successful breeding programs, with probable outcomes, because they are self-limiting viruses. Labor prefers capitalism because its easier to ignore one capitalist than 20 socialists. Neither requires a brain for anything other than misdirection, which is why they love DC control systems. Labor has no use for misdirection because it maintains a separate feedback loop with nature as the monetary base. Empires come and empires go. The reason DC systems can only crash is because they are imbalanced, essentially acting as a one sided magnet. Nature automatically blows the up accordingly. Have you ever met an establishment physicist that could explain electricity? There are still a few folks trying to learn, rather than selling their tribe book. Labor has no need for ledgers. Build a bridge just big enough to get across. And show the capitalists when you are two ahead. The capitalists will breed on one back and the socialists on two back. Both will collapse their ecosystems. Hope that all helps. Nothing new, but you never know what is going to wake others up. Blockchain is just another efficiency, with its own ponzi tribe. Socialist females will prefer pm, and along with them capitalist males. That's History, a self-fulfilling breeding program.
October 23, 2017 at 9:33 PM
Crypto is an extension of fiat which is an extension of pm - ledger inflation. Gold is quite valuable, but not for the reason most assume. Gravity is actually many forces. Light is just one speed of energy. The list goes on and on. The internet, DC technology, is a control technology, not an information technology, which is why, after decades, people are talking about nothing but bread/ledgers and circuses/entertainment. What you want is to eliminate the clock, to allow events to schedule themselves... Perseverance.