A Central Bank Cryptocurrency to Democratize Money
Since 2008 – and more so during the pandemic – central bank money has been showered, via private bankers, on the ultra-rich, while everyone else suffers stagnation and austerity. The time for change is now, and the way to do it is by creating central-bank cryptocurrency.
ATHENS – The history of money has been the history of the struggles to control the payment system and the money tree. Today, with control over both resting in the hands of bankers, central banks’ efforts to boost business end up amplifying inequality while failing to address either economic stagnation or the looming climate disaster. The time for ending this scandalous cartel is now; the way to do it is by creating a central-bank cryptocurrency.
Whether you are charging a cup of coffee to your debit card or wiring money, the transaction passes through a digital system fully owned by bankers. What should be a public utility, like roads or sewers, is a lucrative cartel. Similarly, every time bankers lend, they mark up the balance of the borrower’s account, thus creating new money. Dollars, pounds, euros, yen, and so on are conjured mostly by private bankers out of thin air.
Defenders of the status quo will protest that bankers’ access to the money tree is constrained by the central bank. By imposing on bankers a minimum ratio of safe debts (such as US government bonds or real-estate collateral) for every loan they make, the central bank limits the production of new money. But while that may be true in theory, during a crisis, debts turn bad en masse, forcing the central bank to choose between letting banks fail and accepting increasingly worthless collateral.