Finally, we get to this question of whether central banks are in fact independent at all. The 80s and 90s were the high point of central bank independence globally, but since the that time and particularly since the great financial crisis, central banks implicit mandate to maintain economic stability has resulted in more direct political control over its function.

Things like bailouts, targeted monetary policy, the different distributional impacts of monetary policy, the pressure on central banks to be more transparent about their goals and objectives. These are all political dimensions of central banking, and in fact maintaining the stability of the financial system as a whole, is often at odds with the imperative to maintain price stability or control inflation, which is another mandate of central banks.

How that trade-off is made is a political decision.

$5000 is the median checking account balance in the US. CBDC account caps at less than this amount would be required to avoid significantly cannibalising commercial bank deposits. This was already put in place by the central Bank of the Bahamas in their sand dollar initiative.

Identity verified CBBC accounts are capped at $5000 annual balance and non-identity verified accounts are capped at 500. So that's quite a low amount, and again raises questions about the future of commercial banking under CBDC regimes.

This incompatibility was recognised by none other than former director of the FBI James Comey who was very upset by the fact that end to end encrypted messaging apps existed that the FBI could not access. He explicitly said in 2015 that, that's a problem with democracy.

What we're seeing is a consolidation by the state away from democratic governance, the expectation, continued expectation of democratic governance on the part of the people, and these incommensurate points of view are not in dialogue with one another.

In the context of banking and CBDCs, this consolidation of state authority is represented most clearly by the blurring of the distinction between central and commercial banks.

Central banks have commitments to back-stopping customer deposits. If central banks are put into competition with commercial banks for deposits, modelling has shown for example by the Philadelphia Fed, that consumers will overwhelmingly prefer the central banks and will gravitate to central banks over time.

This is why most CBDC designs have this fig leaf of separation between central and commercial banks where there are wholesale CBDCs and not retail CBDCs.

However, in practise this really is nothing more than a fig leaf because ultimately the retail CBDC accounts that will be managed by commercial banks will still be totally subject to central banks and targeted monetary policy.

This is a short history of U.S. government insistence on exceptional access, which is the requirement that encryption back doors be put in services and products used by ordinary people.

Obviously, the Snowden revelations put a lot of this into mainstream conversation. But it's important to note that none of the programmes identified by Edward Snowden have been formally sunset as a result of the public outcry.

All of this, whether it's secret NSA secret key provisioning services and recovery services, warrantless surveillance under section 702 of FISA, Prism, Upstream…all of these are ongoing programmes and not checked by any democratic body.

Most recently the Treasury Department’s office of intelligence analysis was revealed to be illegally rifling through the private financial records of millions of U.S. citizens, which it was collecting illegally from FinCen, the NSA was also accessing that data illegally.

There was a brief outcry about this, but this got caught in the bureaucratic turf war between the treasury, OIA and FinCen, both of which are Treasury Departments, there was a politicised aspect to this battle and so it just kind of quietly went away.

Just a couple of days ago the Wall Street Journal broke a story that the Arizona attorney general's office created a programme called track to collect data on money transfers from Western Union with the full collaboration of Western Union.

150 million money transfers are stored in this database. Also, completely illegal. It didn't go through the subpoena process. But again, we will see if there are any consequences for this.

What this points to is the incompatibility of a surveillance state with democratic governance.

In 2018 Ronald Pol did a comprehensive study of the effectiveness of AML laws worldwide and came to the conclusion that less than .1% is the impact that AML laws actually have on criminal finances. Compliance costs however exceed those recovered criminal funds more than 100 times over and banks, taxpayers and ordinary citizens are penalised more than criminal enterprises.

As with all surveillance, it's surveillance for those who lack the power to circumvent this.

This is a quote from the former director of Europol Rob Wainwright, 2018 “Professional money launderers, & we have identified 400 at the top top level in Europe, are running billions of illegal drug & other criminal profits through the banking system with a 99% success rate.”

So again, we must ask:

Who are these laws for?

These government and para-government organisations are not subject to the data protection laws that commercial actors are. They maintain profiles on billions of people without any of the imperative to delete that data, to make citizens aware that that data is being collected, to modify that data if it's inaccurate. Then of course they all share information between one another.

One of the results commercially of AML laws is that anywhere between 30% and 65% of declined transactions globally are in fact legitimate. A question that is rarely asked is ‘how effective is anti-money-laundering legislation?

This is a quote from US federal reserve’s report or white paper on CBDCs that was published in January of last year, so exactly one year ago.

“Any CBDC intermediary would need to verify the identity of a person accessing CBDCs just as banks and other financial institutions currently verify the identities of their customers.”

This brought to my mind a quote from Timothy May, one of the cypher punks, who wrote in the 1990s that “The four horsemen of the infocalypse will be used to justify doing away with privacy online, these are terrorists paedophiles drug dealers and money launderers.”

We're seeing that in action today. There's basically a new AML law every few years starting with the 1970 bank secrecy act. The 2001 Patriot Act was perhaps the most significant of these in recent memory. We've also seen since 1989 the establishment of the financial action task force, which is a global network of financial police. FinCen and US treasury office of intelligence and analysis.

The overall trends here are that reporting thresholds for financial transactions are being continually lowered.

In the words of criminal law scholar Andrew Guthrie Ferguson “what is different about the system of surveillance today from the type of surveillance that say is afforded law enforcement in the constitution, is its scope and persistence. It is automated, it is accelerating, it is accurate, it accumulates data, aggregates that data, and then actualises that data, and of course it is persistent pervasive and profitable.”

AML/KYC is basically a global system of warrantless surveillance that has in effect made constitutional protections like the subpoena process irrelevant.

4th amendment privacy protections have been eroded considerably since the attacks of Sept 11 2001, in fact no account based transactions are truly private because in every case they require personal identity as a prerequisite step. This of course will be a core component of CBDCs infrastructures.

Surveillance systems are poised only to grow. Cities across the world, and the United States is no exception, are implementing more stringent surveillance practises. There's a lot of funding to do this and the infrastructure bill funding this.

But then also, municipal and state appropriations are doing this. This points to the broader trend that's been identified by some historians as surveillance capitalism. Surveillance capitalism is an accelerating surveillance economy in which both private actors and state actors stand to benefit from growing surveillance of the general population.

In the case of the state, surveillance affords control, the ability to influence behaviour at scale.

In the case of the private sector that type of behavioural influence affords profit.

The United States intelligence agency network has grown dramatically. It now costs the taxpayer almost $90 billion a year. There are continuously new intelligence agencies added. This is just at the federal level.

Most Americans have never heard of most of these agencies and in fact it's unclear how many total federal agencies there are there is no one authoritative source that spells out all of US federal agencies and their mandates. There are various sources depending on how the agency is defined, and there is no standard definition of agency, placed the numbers at anywhere around 60 to over 400.

How can we in fact understand or reign in abuses of the administrative state if we can't even document that state in its current state.

As chairman Giancarlo mentioned CBDCs are already very advanced as is implementation in countries around the world.

This process of developing and launching CBDCs is happening entirely outside of the democratic process and without feedback from the populations of any country in which they are being implemented.

Where we have pilot projects of CBDCs in the field for example in China, Nigeria, the Bahamas, eastern Caribbean, it's clear that the people don't want to use them. They see them as surveillance coins they see them as attempts to corral people into the use of Fiat currencies that many of them don't want to use.

There is a coercive element to the implementation of CBDCs that is not being taken into account at all in these debates at the state level.

CBDCs are just one symptom of a broader problem that I see is the growth of the surveillance state.

This kind of momentum wherein the state grows the amount of data that it collects on ordinary people with basically very little in the form of a countervailing push from civil society.

CBDCs are just another digital form of base money, there is no redistributive project implicit in any CBDC rollout anywhere in the world. What they do well though, is that they provide a system to accelerate the full surveillance of financial transactions.

ID verification for CBDC usage is a design requirement for every CBDC implementation. This is not something that regulators or private actors building and implementing CBDC architectures will skip on. That in fact is a benefit for the state that CBDCs offer.

The ability to individually target monetary policy is another benefit of CBDCs. They are fully programmable money, meaning that deposits and spend can be controlled at the individual level and even at the token level

This actually represents a full merger of fiscal policy, monetary policy and policing.

Another big motivator for states in implementing CBDCs is capturing tax revenue form the ‘informal economy’ so those who are not included in the banking system transact primarily in physical cash.

Many of those transactions are not currently taxed, and so by in effect replacing physical cash, which is what CBDCs will eventually do, and requiring that ID verification, states do intend to capture that additional tax revenue.

For the BRICs countries, the incentive to build a CBDC network is that they are able to create an alternative to the US dominated global financial system. This has become much more urgent after the USA froze Afghanistan’s and Russia's sovereign reserves over the past few years. It's made clear to sovereign actors that their FX reserves are not safe if they are not directly custodied.

That money has become fully politicised, and so what is happening is that different political monetary systems are being built out in response to the political US dominated global monetary system.

People who ping-pong between obedience and rebellion their whole lives never actually individuate.

In the War of Ideas, Bitcoin Is Our Strongest Weapon

https://bitcoinmagazine.com/culture/bitcoin-is-our-weapon-in-the-war-of-ideas

A decentralized truth community builds the historical record in real time.

Thorough controlled friction and conflict, a narrative emerges.

I am profoundly grateful that human beings have the ability and will to revise inherited assumptions and prejudices. This is a superpower we have that, unfortunately, many see as a weakness.

It’s no secret at this point that cultures around the world have subjected girls and women to the mental, emotional, and of course physical violence of practices like foot binding, clitoridectomy, surveillance, forced dependency, forced motherhood, and lifelong infantilization.

These practices produce traumatized people whose full range of human possibility has been narrowed to a single octave amidst a panoply of sounds. It produces rage that cannot find lucid expression. It produces deep sorrow at the things that were lost that cannot even be named.

In its worst manifestations, it produces a Stockholm syndrome-like valorization of the abuse, and a determination to subject others to it.

But this is no one’s destiny. Everyone already embodies the conditions of their own freedom. But it is not guaranteed—it must be won.

We must fight to become who we are in a world that has predefined us and is ready at every moment to conscript us into this predefinition.

By being unapologetically ourselves, we give others the courage to do so as well—even if they are too scared to do it now.

When we want change, it always takes much longer than we expect.

When we don’t want it, it happens much too soon.

Part of cultivating equanimity, for me, has been coming to understand and accept this subjective experience of change.

When creating incentives, it’s worth asking “incentives for whom”?

At times it may seem that those who hold strident, un-nuanced views have an easier time in life, or at least an easier time making decisions.

They absolutely do not.

Thinking less should never be mistaken for discernment, focus, or even confidence.