Posted 3 years ago | by Ben Armstrong
BoE's Carney Proposes Reserve Crypto, Idea Gains Traction
The Bank of England (BoE) under Governor Mark Carney has been a big proponent of cryptocurrency, but it isn't Bitcoin or Ethereum that has the BoE hot and bothered.
Carney did a stint as head of Canada's central bank before blasting across the Atlantic to head one of the world's most important central banks (the BoE oversees the City of London, which is a major banking hub), and now he is pushing for a very new token that would be backed by central banks.
The idea that Carney is promoting was introduced in August of this year, and has been picking up support from powerful groups, and his former employer, the Bank of Canada. Carney also worked at investment bank and so-called 'vampire squid' Goldman Sachs, for whatever that is worth.
Carney's Brave New World
According to a recent statement issued by the United Nations Conference on Trade and Development (UNCTD):
“What is needed is a Global Green New Deal that combines environmental recovery, financial stability and economic justice through massive public investment in decarbonizing our energy, transportation and food systems while guaranteeing jobs for displaced workers and supporting low carbon growth paths in developing countries… through the transfer of appropriate technologies”.
Carney approached this same theme from a slightly different direction when he spoke at the famed Jackson Hole conference in August.
“The combination of heightened economic policy uncertainty, outright protectionism and concerns that further, negative shocks could not be adequately offset because of limited policy space is exacerbating the disinflationary bias in the global economy...What then must be done?”
The Answer is a “Synthetic Hegemonic Currency”
The fact that one of the most powerful central bankers in the world is proposing the creation of a Synthetic Hegemonic Currency, which would take the form of a number of Central Bank Digital Currencies (CBDCs), should be pause for thought.
There is little doubt that the post-WW2 Bretton Woods monetary world order is collapsing, and central bankers outside of the US are looking for ways to ensure that their banks aren't consumed in the global firestorm that is ready to rip through the markets.
Or, if you prefer less dramatic language, Carney phrased the same idea in these terms at Jackson Hole:
“Even a passing acquaintance with monetary history suggests that this center won’t hold,...Let’s end the malign neglect of the international monetary and financial system and build a system worthy of the diverse, multipolar global economy that is emerging.”
One wonders if the end of this grand monetary experiment will be wild swings in asset classes, shuttered markets, and bank runs, or simply a massive collapse in the buying power of all the fiat currencies that have been debased over the past decades?
The good news is: We probably won't have to wait long to find out.