Cryptolutes: banks keep their distance, but not all

An article on Neon24.net by blogger @Marka-M: "The Berne Agreement shows that there is simply a better alternate to the EU" ( https://memron.neon24.net/post/174746, Bernese understanding-shows-that-is-better-alternative-for-ue) He lit a red lamp in my head, due to the fact that in my opinion the article presents a false alternate – a darkening image of reality.

I believe that for a better knowing of the processes that are taking place in front of our eyes, the publication of the article by Prof. W. J. Katasonów from the end of last year will most likely contribute.

PZ

Cryptolutes: banks keep their distance, but not all

The situation is getting more and more confusing...

Once upon a time, the planet of money was simple and transparent. Both in the ancient planet and in the mediate Ages, alleged “good” money was used, which had an intrinsic value. These were mainly gold, silver, copper and another metals. Later, in modern times, erstwhile banks were created, banknotes and coins appeared in circulation. In addition to cash banknotes, non-cash money besides appeared in bank accounts. Over time, the full issue of banknotes from private commercial banks went to central banks. The modern planet of money is much more complex and confusing than in the past. It is represented by cash issued by central banks (part of the cash is tiny coins, issued not only by the Central Bank, but besides by state treasures). Their mass is called the M0 monetary aggregate. Moreover, it is non-cash money, the lion's share of which is issued by private commercial banks. They are besides called deposit money as they are placed on deposit accounts (and other) of commercial and central banks. Together with cash, they form an M2 cash aggregate. Finally, there is simply a concept of "wide money supply" (M3 monetary aggregate), which in addition to the above types of money includes debt securities (except shares), metallic bills in banks, etc. I mentioned the main elements of the image of the monetary planet that existed in the late last century. The planet has gained additional diversity by including currencies representing different countries and jurisdictions. By the end of the last century, there were over 200. Starting with the US dollar, the euro, the British pound of sterling, the nipponese yen and beyond. However, fresh components have emerged in this century – private cryptocurrency and digital central bank currencies. Everyone knows a private cryptocurrency called Bitcoin. But too this truly popular cryptocurrency in the planet there are thousands of another private digital currencies (at the beginning of last year there were 13 1000 experts). respective twelve central banks have been developing and implementing projects for their digital currencies for respective years. It's called CBDC. About a twelve countries and jurisdictions have already legalized the CBDC (the largest is Nigeria). It is very hard for a common man to realize this grumpy planet of money (money). However, it turns out that banks – professional financiers – are besides hard to realize the situation. I'll effort to map out the place of modern banks in this complex planet of money. During and after the 2008-2009 financial crisis. Many central banks have begun to conduct a soft and ultra-soft monetary policy, which has been demonstrated primarily by the fact that the main interest rate has begun to decline. Consequently, commercial banks, following the Central Bank, had to reduce the interest rate on both active (credit) and passive operations (collection of money for deposits). The interest on deposits in any banks in any countries has fallen to zero or even negative levels. Clients (mainly natural persons) began to retreat their non-cash funds from deposits and swap them for cash. In order to halt the escape of clients and money from banks, the second began lobbying authorities for decisions to restrict the circulation of cash. To close customers in banks where only non-cash money will be available. The cash flow has actually collapsed in the last decade. Until now, however, the box has not been completely seized in any country in the world. It is actual that the relief besides came for the banks: since the beginning of last year, the Central Bank has begun to shift to a restrictive monetary policy, including raising the main interest rate. The commercial banks that started to rise deposit rates benefit from it. Since the end of the 2000s, a real boom for private cryptocurrency has begun in the world. Many commercial banks have begun to look closely at this fresh instrument. Which are issued mainly by individuals. The central banks besides began to look at this closely, but did not immediately formulate their approach to cryptocurrency. During this ‘neutral’ period, a large number of commercial banks began to offer their brokerage services related to cryptocurrency to citizens and corporate customers. The cryptographic services of banks include beginning accounts in bitcoins and another private currencies and carrying out certain cryptocurrency transactions at the client's command (instructions). Operations include mainly buying and selling cryptocurrency (using average money but sometimes utilizing another cryptocurrency). A crucial number of fresh organisations have emerged in the last decade, which are called cryptocurrency banks, financial institutions providing digital asset services. They operate in this area, providing options for storing, exchanging, investing and managing digital client coins.

Commercial banks refrained from cooperating with cryptocurrency not as intermediaries, but by utilizing their own capital to make profit. Of course, Krypton is an highly risky instrument. You can burn out quickly.

Thus, the Basel Banking Supervision Commission (at the Bank of global Settlements) believes that the passion for cryptocurrency can lead to global financial strategy destabilisation and proposes a hazard origin of 1250% for Bitcoin and another private digital currency solutions. In practice, this means that banks with their cryptocurrency are required to make a reserve of 12,5 times the amount of investment in cryptocurrency.

At the end of the last decade, and especially at the beginning of this decade, many central banks after many reflections and doubts yet defined their position towards private cryptocurrency. The position is negative. In any places, this is expressed by a complete ban on commercial banks working with cryptocurrency. In any places – in an increase in the conditions of specified work. Even if the bank only provides intermediary services and does not carry out transactions on its own behalf.

Why so tough? – Since private digital currencies make it hard for CBDCs to enter into circulation, according to the central banks and the global Settlement Bank (which is simply a "club" of the central banks of different countries). According to The luck magazine, cryptocurrency was completely banned in countries specified as Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, Bangladesh and China at the beginning of last year. 42 countries, including Algeria, Bahrain, Bangladesh and Bolivia, indirectly introduced cryptocurrency bans, imposing different restrictions on banks' ability to carry out transactions in these currencies, specified as transfers. Thus, from 2018 onwards, the number of countries and jurisdictions that banned cryptocurrency in full or in part has more than doubled by early 2022. Today, the year 2023 ends on the calendar. I think that so far the number of countries that have completely banned cryptocurrency or tightened the rules for working with them has increased significantly. And all to pave the way for the digital currencies of the central bank.

But commercial banks are not happy with CBDC. After all, they realize that CBDC is not the 3rd kind of money (except cash and non-cash money), according to the heads of central banks, IMF and BIS. This is the only kind of money that will yet replace conventional money – cash and cashless. To date, commercial banks have made good profits through interest transactions and by allowing them to issue fresh money (in the form of loans). And in the future planet CBDC will have no place for them or will be asked to act as a kind of financial intermediary between the Central Bank and digital currency users (physical and legal persons). And be content with only commissions for brokering services provided.

Commercial banks are, in a sense, enslaved organizations, as the Central Bank acts as regulators and controllers in relation to commercial banks (bank supervision). Therefore, they do not argue the beginning of the CBDC project, but effort to stay in the future, a new, wonderful planet of numbers, at least as agents and middlemen of the Central Bank.

If we compare the US and Europe, the Old planet has developed a more stringent government on the anticipation of banks cooperating with cryptocurrency. In the fresh planet (US) the government is more liberal. In fact, present the American commercial bank can work with cryptocurrency. For this purpose, it must get a licence called the Money Transfer License. licence to transfer funds utilizing cryptocurrency. There is besides a licence called BitLicense. Issued by the Financial Services Department of fresh York (NYDFS) for transactions on digital assets. In Europe (with the exception of Switzerland), banks cannot or cannot get specified licences.

From my point of view, this can be explained by the fact that America is in no hurry to implement the digital dollar. I have already written about this in my articles "Not all central banks are in a hurry to build a "CBDC paradise" and "CBDC is simply a "grave of American freedom". Experience of opposition to the digital dollar project."

The author of the publication “Banks and cryptocurrency: what is the complexity of these relations” says more or little the same: “Of course America is the most progressive in terms of cryptocurrency. This in the U.S. is the easiest to buy and sale cryptocurrency, and bitcoins can be stored in bank accounts. European bankers are not as liberal as their American counterparts...”

I want to go back to the last decade again. At a time erstwhile central banks have not yet developed their approach to private cryptocurrency. Then the sound around private digital currencies infected many commercial banks. The second thought: why not start creating your own cryptocurrency and offer it to our customers? For example, the English Financial Times published an article in 2017 entitled "Six global banks join forces to make a digital currency" ("Six global banks unite efforts to make a digital currency"). The article notes that six of the world's largest banks have embarked on a task to make a digital currency by which they hope to settle and settle financial transactions from next year. These are Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG, and State Street.

And since the mediate of the last decade, the Swiss bank UBS along with the Deutsche Bank, Santander and BNY Mellon banks, as well as the ICAP broker, has besides begun to make a blockchain-based crypt, or distributed register. It was referred to as USC – a "public utility settlement coin" (approximately translated: "practical billing money").

There are also examples where European private banks have started plotting to make their own digital currencies – mainly for common settlement purposes (not for external customers). To highlight, they called these currencies stablecoins (i.e. low variable, unchangeable currencies). But there's been no evidence of these projects or currencies for a fewer years. It can be assumed that the ECB and the national central banks simply banned the usage of these currencies.

And 1 day, there was a message that many experts found unexpected and paradoxical. French bank Societe Generale began trading its stablecoin EUR CoinVertible (EURCV) on the Luxembourg cryptocurrency stock exchange BitStamp. It appears that EURCV cryptocurrency was announced in April of that year. Societe General Forge branch, specializing in working with digital resources. At that time, the bank branch managed to get a licence from the French regulator for a digital asset service supplier and token issuance began based on blockchain Ethereum. EUR CoinVertible is linked to the euro exchange rate. But whatever it is, it is simply a private currency that will be alongside the authoritative euro.

On December 6, the English Financial Times devoted the article "Société Générale to become the first large bank to put a coin stablecoin on the stock exchange" to introduce cryptocurrency by the French bank. In particular, it includes part of the interview for the “Financial Times” of the head of Societe Generale Forge, Jean-Marc Stenger. In particular, he said: “The cryptocurrency strategy is highly concentrated around respective stablecoin coins, 90% of which are linked to the US dollar. We believe that there is area for a euro-linked stablecoin bank and coins in this market.”

Alena Narignani, CEO of Crypto-A, commented on the announcement of the birth of the euroCV digital currency: “It is rather possible that this coin will enable the intensive integration of the conventional financial sector into the cryptocurrency sector. This means that it will facilitate the transition from cryptocurrency to conventional finance, from conventional finance to cryptocurrency and will attract more fresh users, investors and conventional users of banking services to cryptocurrency space. He'll tell them there's something like tablecoin coins and that you can usage them. And it is not far from another cryptocurrency that is not stable.”

I think the situation in the planet of money is becoming more and more confusing. For both citizens and banks. We are witnessing a increasing monetary chaos.

Author:

Katasonov Valentin Yurievich

for: http://reosh.ru/valentin-catasonov-kriptovalyuty-banki-derzhat-distanciyu-no-ne-vse.html

also: https://www.fondsk.ru/news/2023/12/22/kriptovalyuty-banki-derzhat-distanciyu-no-ne-vse.html

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Video Appendix:

About modernity, from around 30:00

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In the form of an annex:

Swiss Resistance

People Against “The Uncash Paradise”

For many years, money owners (the major shareholders of the American national Reserve and another leading Western central banks) have been fighting cash, trying to completely replace it with cashless money, primarily the digital currency of the central bank (CBDC). .

Part of society has rather a affirmative attitude towards this exchange. And the main argument of the supporters of “cashless society” is that non-cash money is more convenient and safer (harder to steal).

The arguments of non-cash opponents yet boil down to the fact that the full exchange of cash for non-cash would deprive man of any remaining freedom. The transition to full cash-free activity is an crucial part of the task to build a digital concentration camp. What happens if, let's say, for 1 reason or another, the country (city, region) disappears, without which all non-cash money will be reset and non-cash payments cease?

According to Merchant Machine, based on public opinion surveys in European countries, in early 2021 the largest percent of residents willing to quit their cash was recorded in Hungary – 44% of those surveyed. They were next (%): Italy – 41; Poland – 40; Spain – 37; Czech Republic – 36; Belgium – 33; France – 30; Germany – 30; Netherlands – 23; United Kingdom – 21.

Even in countries where money and non-cash payments presently have clear dominance, there are adequate opponents to quit full cash. The list of the 10 most cash-free countries is the Nordic countries (Sweden, Norway, Finland), Austria, the Netherlands, Spain, Canada, Australia, China, South Korea, Japan, USA, France.

There is simply a paradoxical situation in any countries: they are characterised by reasonably advanced rates of non-cash usage (number of debit and credit cards per 100 000 inhabitants, percent of close-up payments at retail outlets, share of non-cash money in full money supply, etc.); At the same time, residents want a warrant that paper bills will always be in their pocket. These countries include Belgium, Austria, Germany and, in particular, Switzerland.

Surprisingly affirmative news for opponents of the “cashless paradise” came from Switzerland. This is discussed in peculiar in the article Will Switzerland become the first country to legalise a non-cash society? (Will Switzerland become the first country to outlaw a non-cash society?), published in ZEROHEDGE on 18 February. The author of the article Nick Corbishley recalls Switzerland's peculiar conservatism in monetary matters: “According to the results of the latest Swiss National Bank survey conducted in the autumn of 2020, 97% of Swiss citizens inactive cash for regular expenses in their wallet or at home. This figure is much higher than most countries." The author provides statistics: in Switzerland, 40% of payments are inactive made in cash, which is more than in many another European countries (in the UK around 15%, in Sweden little than 10% and in Norway 3-4%).

And the people of the Alpine republic are ready to defend their right to cash. In February, the Swiss Freedom Movement (FBS) public group announced that it had collected adequate signatures (111,000) to launch a referendum on the indefinite holding of cash in the country. The author writes that concerns about the destiny of cash have increased peculiarly since the announcement by the National Swiss Bank (SNB) of plans to introduce a digital Swiss franc. SNB, according to the author, most likely promises that the digital franc will not mean the abolition of the cash franc, but these promises cannot be trusted.

FBS leader Richard Koller pointed out the reason for the initiative: “It is clear that... moving distant from cash solves problems of transparency, simplicity and security... But at the same time there is simply a immense danger of full surveillance."

There was another argument in favour of saving cash that previously seemed irrelevant. In Norway, a force majeure event occurred in May 2022 erstwhile card terminals across the country did not work for respective hours and millions of people could not make a transaction. “The Norwegian cash crisis seems to have forced the government and the Norges Bank [Norwegian Central Bank] to strengthen cash services and the right to pay with banknotes and coins,” says the article.

Initiators of the referendum insist on complementing Swiss law, according to which a minimum amount of cash banknotes should always be kept in the money supply of the republic. The author of the article recalls that Switzerland maintains a unique strategy of direct democracy in Europe. The proposals of the initiative groups (at least 100,000 signatures), supported by the referendum, must be implemented by the legislative and executive authorities of the Alpine republic. However, the author adds: “It is actual that the choice of ways to implement them remains with the government and parliament.”

Of course, it must be borne in head that during the referendum, Swiss citizens will be under strong force not to support this initiative. Examples do not request to be looked far. A referendum on sovereign money was held in the Alpine Republic in June 2018. The Swiss MoMo Group (Monetäre Modernisierung), established for the intent of carrying out a monetary improvement in Switzerland, launched and defended the initiative at the time. Its essence was to ban the partial (incomplete) payment of the obligations of commercial banks, which gave them the chance to conduct their own (private) issue of money. MoMo Group then explained that the global financial crisis of 2008-2009, which besides affected Switzerland, was the consequence of the creation of private money. And she called for the restoration of sovereign emissions, which is the alleged issue of money exclusively by the Central Bank. Unfortunately, only a 4th of the referendum participants supported this sensible initiative. The powerful propaganda of Swiss media, paid by banks, played a disastrous role.

Incidentally, the author notes that SNB has already opposed the FBS initiative to warrant the preservation of cash. However, erstwhile SNB deputy board Martin Schlegel, who can now talk freely about money, emphasized the cash benefits of last November. The author of the article details Schlegel's position.

Firstly, cash management is simpler and more transparent. Just open your wallet and see if you can afford extra expenses. That's why parents give their children pocket money in cash. If you pay with a plastic card through a terminal, you can only see the amount that will be downloaded from your account.

Secondly, cash, due to its ease of use, allows all people to participate in the economy and social life. You do not request an account or a mobile telephone to pay with coins or banknotes. You don't request to know digital technology.

Third, erstwhile paying cash, you do not gotta supply individual data specified as your name or card number. In the case of electronic payments, information shall be kept about the individual who made the payment and its payment behaviour.

Schlegel besides calls cash “especially crisis resistant”: “You can pay cash even erstwhile the payment terminal is broken, there is no reception on your mobile telephone or no electricity. Therefore, cash is an crucial safety against local or even global software failures." In general, Schlegel stands by the initiators of the referendum.

The author of the article is aware of how hard it was for FBS activists. We gotta win the referendum first. And then guarantee that the results of the referendum are adequately reflected in the decisions of all authorities – legislative, executive and judicial. Nick Corbishley notes: “In Switzerland, referendum results do not automatically become legal... there were many cases where the Swiss government, parliament, courts and authoritative institutions delayed and/or mitigated undesirable laws that were preferred by society.”

The author of the article stresses that the referendum on cash in the Alpine Republic is not just a substance for Switzerland. The success or failure of the referendum will affect another countries. In another countries, the public opinion on digital currency and cash is openly ignored by the authorities: “...the public opinion does not care whether it is Nigeria, the United Kingdom, the USA, Russia, Brazil or the euro area. And that is why what is happening in Switzerland has the possible of large importance. At least there will be a public debate on this,” concludes Nick Corbishley. The article ends with FBS leader Richard Koller's words: “If an FBS referendum on cash retention occurs and if the government adopts the law without overly softening it (two large IFs), Switzerland can become a possible "European standard bearer" to defend cash."

P.S. A fewer words about the situation in Russia. In mid-February 2023, the president of the Central Bank of Elwira Nabiullin described the share of non-cash payments in Russia as follows: “As far as the share of non-cash payments is concerned, it has increased, if memory serves me, present in retail trade it is somewhat over 78%. And in our opinion this share may increase – she said, adding that by the end of 2023 this percent could scope 80%.

At the same time, most of our fellow citizens, as public opinion polls show, do not intend to quit money. The number of professionally active Russians ready to return cash in July 2014 was 21%, in March 2022 this figure fell to 15%.

author: Valentin J. Katasonov.

https://www.fondsk.ru/news/2023/03/02/shvejcarskoe-soprotivlenie-58649.html