As our Federal Reserve rushes to implement its freedom-killing digital currency, we have a real-time example of the havoc that will ensue in Communist Cuba, a favorite of progressive communist democrats.
As Cuba takes leap towards 'cashless' economy, entrepreneurs brace for impact
HAVANA (Reuters) - When Cuba in early August announced it was taking a major step towards electronic banking and a "cashless" society, the offices of fledgling small businesses across the communist-run country were left scrambling to figure out how to respond.
Most alarming to many budding entrepreneurs was a new 5,000 peso ($20) daily cap on cash withdrawals for businesses, one of several measures the government said were aimed at forcing Cubans to do their transactions electronically, via transfer, online payment and bank cards.
Even before the new restrictions, Cuban entrepreneurs faced what might seem insurmountable hurtles anywhere else: spotty electricity and internet, widespread fuel shortages, and no practical way to legally exchange large amounts of local currency into the dollars needed to import merchandise from abroad.
Just three days after the rules were put in place, Hernandez [Yulieta Hernandez, founder and manager of Pilares Construction] said, more bad news rolled in: Many of her suppliers, once amenable to electronic transfers, were now only accepting cash, for fear of losing access to the paper money they needed to operate - the opposite of what the law intended.
That has put businesses like Pilares Construction in a bind: The company needs cash to operate but is prohibited from extracting it in sufficient quantity from its local accounts.
"Right now the effect ... is like paralysis," Hernandez said, adding that many business owners were already freezing investments. "People are waiting to see ... if a solution is found for the problems (the rules) have created."
Cuban officials have said the new banking measures are necessary for transparency, to assure transactions are recorded and taxes are paid. <Source>
A few considerations…
This is a freedom-limiting move that an authoritarian government can exploit to track, control, reward, or punish its citizens. Unlike cash, each electronic transmission is diminished by fees until the value is entirely consumed by the “system.” Now consider the dangers of a single point of failure where the loss of electricity or communications cripples the entire system. Now imagine a kill switch that can hold the country hostage to outrageous political demands. It is worthwhile to note that one of the first acts in Castro’s revolution was to disarm the citizens of Cuba.
Dangers of Nationalized Digital Currency.
Centralized Control: The primary concern associated with a nationalized digital currency is the control granted to governments and central banks operated under a central authority raising credible questions about individual financial privacy and government overreach. Relying on a central authority for the issuance and regulation of a digital currency introduces the risk of governmental abuse or mismanagement, especially if the government decides to devalue or restrict the use of the digital currency in the event of economic or political instability.
Loss of Financial Privacy: Digital currency enables the government to monitor and track every financial transaction its citizens make. While the government argues this could help combat tax evasion and illegal activities, it raises concerns about mass surveillance and the erosion of personal financial privacy. Digital currencies lack the anonymity associated with physical money. Every digital transaction leaves a trace in the ledger, potentially revealing sensitive financial information. This lack of anonymity could lead to unintended consequences, such as identity theft or personal data breaches. Considering the number of leaks involving financial data coming from the government, privacy for the opposition is dead.
Digital Equity: The progressive communist democrats go on and on about those unable to obtain valid identification for voter-id or the unbanked population, who may not have access to the internet or digital devices when needed, especially in rural areas. Thus, a digital system would exacerbate existing economic inequalities and result in marginalized populations being further marginalized as they are unable to participate fully in the digital economy. (Alinsky’s Rule #4 -- Make the enemy live up to its own book of rules.)
Cybersecurity Vulnerabilities: As we have recently seen, digital currencies are prime targets for cyberattacks and are lucrative targets for hackers and malignant state actors with catastrophic consequences, leading to the loss of funds, sensitive financial data, and state secrets.
Monetary Policy Challenges: Nationalized digital currencies can complicate a country's monetary policy as central banks use interest rates and money supply adjustments to stabilize the economy. The central bank's ability to influence the money supply is compromised with digital currencies, leading to additional economic instability.
International Relations: The use of a national digital currency would impact international relations as other countries refuse to adopt or use digital currency from another nation, leading to sovereignty issues, national pride, diplomatic tensions, and trade disputes.
Technological Dependence: The successful implementation and operation of a digital currency system rely heavily on advanced technology infrastructure where technical glitches, outages, or system failures could disrupt the entire financial ecosystem, potentially leaving citizens without access to their funds or the ability to purchase necessary food, medicine, and critical supplies.
Inadequate Regulation and Corrupt Oversight: Who can be trusted to regulate the system? As we have seen in the Obama/Biden Administration, every institution headed by a political appointee appears to have been politically or financially corrupted – with abuse of power becoming more commonplace. Without comprehensive and effective regulations, digital currencies are subject to political manipulation, fraud, scams, and illegal activities, posing risks to consumers and the broader financial system.
And there are other concerns.
Digital currencies are best left to communist countries, which will be funding their own revolutionary implosion.
We are so screwed.
“Nullius in verba.”-- take nobody's word for it!
“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw
“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”
“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS "The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius “A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell “Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar “Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS
“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS
"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius
“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell
“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar
“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS