New York Federal Reserve Introduced Wholesale Central Bank Digital Currency (CBDC) Pilot

Written By Neil McKenzie-Sutter, Posted on December 19, 2022

One story that escaped most headlines last month was that the Federal Reserve, New York Branch started a 12-week CBDC (Central Bank Digital Currency) pilot project on Nov. 15th, 2022. This story is both significant and not that significant for a variety of reasons that need to be delved into. 

For starters, there are actually two types of CBDCs: wholesale and retail CBDCs, and the New York Fed has just introduced a wholesale CBDC, which isn’t an instrument of dystopian financial control many believe it to be. 

Wholesale CBDCs are intended to replace pieces of aging software systems that exist on the back-end of central banks and are intended to be used for intra-bank trade. For example, many believe that wholesale CBDCs will mainly be used for trade between central banks themselves. The NY Fed’s pilot has been rolled out with a select number of major financial institutions in the New York area in order to facilitate smoother transactions between these banks. A few of the institutions participating in the pilot include Citi Bank, HSBC, Mastercard, TD Bank, and Wells Fargo, among others. 

Focusing on the specific situation, New York City is a world capital of finance, so it really makes sense to find the NY Fed introducing this product. As long as the Federal Reserve and other central banks confine their products to wholesale CBDCs, the public shouldn’t be too alarmed as this product is never intended to be available for public use. In the final analysis on wholesale CBDCs: as long as banks are part of society, and central banks, the public should expect to find them upgrading software from time to time, and that’s ultimately what this NY Fed pilot program represents.

It is noteworthy, however, that it is the New York Fed rolling out this pilot. The Federal Reserve banking system in fact consists of 12 regional banks, and the New York bank is unquestionably the most important of these (most of the other banks follow in lockstep with the New York Fed’s moves) so the conclusion and outcome of this pilot will be interesting, to say the least. 

To be totally clear, however, where citizens need to be prepared to push back against central banks and governments is in the implementation of the second type of CBDCs, which are intended for regular commercial use. 

Numerous public figures have commented on the obvious and impending rollout of retail CBDCs as a disaster for freedom, with Bitcoiner/Podcaster Anthony Pompliano recently saying: ‘central bank digital currencies will likely be one of the greatest human rights violations in human history.’ 

Check out this article for a detailed breakdown of why retail CBDCs are completely destructive toward society, but to put it briefly Pompliano in his quote was partially referring to Justin Trudeau’s government in Canada’s brutal response to freeze and seize Freedom Convoy protestors’ bank accounts and other financial assets in early 2022. 

Pompliano’s point was we can only expect to see more of this type of oppression in a retail CBDC-dominated future, and as far as the rest of 2022 is concerned he’s been proven right, as governments in numerous other countries have cracked down on protest movements similar to what happened in Canada, for example, ongoing protests taking place in Denmark and especially and most egregiously in the White Paper protests currently going on in communist-run China

Neither the Danish nor the Chinese situations highlight the threat of financial tyranny posed by retail CBDCs as the Canadian financial crackdown, however central banks around the world have continued to push their goal of a CBDC-centric future quietly. 

In another recent instance, India’s central bank recently rolled out its pilots for a wholesale CBDC on Nov. 1st, 2022, and retail CBDC on Dec. 1, 2022. Again, while wholesale CBDCs arguably have some use case there is almost no positive humanitarian outlook for retail CBDCs and we should all expect similar protests to what was witnessed in Canada, Denmark, and China now, as these ‘currencies’ are the best weapon of control a dictator could hope for.

Neil McKenzie-Sutter

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