July 8, 2023     ₿lockheight: 797,695

Also: “Tiered remuneration” means no privacy and negative interest rates.

The IMF is warning that with all these CBDCs about to launch, there need to be global inter-operability standards between them all, and they’re working on a global platform to facilitate just that.

Speaking at a conference of African central banks in Rabat, Morocco, IMF Managing Director Kristalina Georgieva said that there needs to be agreement among CBDC implementations,

“on a common regulatory framework for digital currencies that will allow global interoperability. Failure to agree on a common platform would create a vacuum that would likely be filled by cryptocurrencies”

Not to be outdone, the Bank of International Settlements (BIS) worked with seven central banks to publish YARP (Yet Another Research Paper) on CBDC policy, entitled “Central Bank Digital Currencies: ongoing policy perspectives”… (*yawn*).

The central banks involved were: Japan, Sweden, Switzerland, England, the United States, Canada, and the European Union.

The paper is mostly a snoozer:

“Development of CBDC work requires careful consideration and engagement with a wide range of stakeholders, including the private sector and legislators”… 

“To successfully meet its public policy objectives, a CBDC ecosystem should allow a wide range of private and public stakeholders to participate and, in doing so, deliver services which benefit end users.”…

“The complex design questions and the potential risks arising from the implementation of any CBDC require careful consideration.”

Until you get to the rather innocuous sounding Annexes, like “Box 2: Legal Considerations”.

This is where it starts to get interesting.

What are retail CBDCs, exactly?

The paper wonders: Are they cash? Deposits? Or something else entirely?

This is quite the question, because if CBDCs aren’t cash, there has to be a reason why they wouldn’t be. When you start to see where CBDCs are going: expiry dates, programability, social credit scores – what we’re talking about is almost a kind of anti-cash (my observation, not the paper’s).

Further, the paper wonders, would there need to be changes to banking charters, legislation or even the constitutions of the countries issuing them:

“Legislation may need to be enacted or adjusted to specifically authorise the issuance and distribution of a retail CBDC (eg changes to central bank charters/statutes, legislation in other areas related to payments or to the constitution itself)”

Who had “new Constitutional convention” on their bingo card for the roll-out of CBDCs? We do now.

Box 3:  What tools may be needed to manage stressed conditions?

Here we truly get a peak behind the curtain – and it’s all dressed up in that Davos-dialect of benign-sounding euphemisms that belie a Brave New World (like how “recontextualizing food chains” basically means banning the peasants from eating meat).

Spike Support Formula - get back to that Pre-COVID feeling

They get right to it:

“When considering potential tools and policies to manage stressed conditions (eg limiting or managing fund outflows from bank deposits), there are price and quantity control approaches, with a mix of the two also being possible”

Those would be your bank deposits. In this section they’re gaming out how to contain bank runs. 

“Quantity holding limits have the advantage of directly limiting the extent of potentially harmful levels of disintermediation (eg structural changes resulting from CBDC adoption that increase the cost or availability of credit across the economy), and being relatively simple to implement.

However, they also have disadvantages, such as potentially impacting adoption; this may happen if holding limits increase the risk of failed transactions occurring, or make CBDC transactions less convenient, especially if alternative forms of digital money (eg stablecoins) do not present similar limits.

Translation: We can cap how much money SerfCoin you’re permitted to hold, so we don’t blow up the system with too much SerfCoin issuance, but if we do that, you may not want to hold SerfCoin, opting for stablecoins (and cryptos) instead – where no such limits would apply.

Implementing limits may also have knock-on effects on the potential functionality of CBDC. 

Technical solutions such as “waterfall” or “cascade” functionality, whereby CBDC holdings or payments that would breach a limit would automatically be transferred into other deposits, could be considered to ease the effects of being close to any holding limit/threshold. 

Translation: We can build in safety valves that would automatically move your money SerfCoin into other accounts, and even make such transfers obligatory. But that could get tricky, because that might technically be, well… theft. 

When I read what comes next:

Price-based measures like fees and tiered remuneration have the advantage of being more flexible by allowing for any size of transaction or holdings, albeit at increasing costs.

In principle, the decision about the amount of CBDC transferred or held above a certain level is influenced via incentives but still relies primarily on each user’s preference. However, price-based measures may permit larger inflows into CBDC in stress situations compared with holding limits as the fee or scale of negative remuneration required to dissuade runs may be very large.

Those are again quite benign-sounding terms, however if you look into it, it becomes apparent that terms like  “tiered remuneration” have very specific meanings within the body of academic thought around CBDCs.

Tiered Remuneration: eliminating cash, privacy and the ability to save

The ECB’s Ulrich Bindseil discusses this at length in a 2019 paper “Controlling CBDC through tiered remuneration” (in fact my money is on Bindseil being the main author of this BIS paper; only the central banks involved are cited on the cover page).

In his paper, the tools of “two-tier remuneration” are examined to mitigate “risk of facilitating systemic runs on banks in crisis situations”.

The paper acknowledges the CBDC role in the elimination of cash (banknotes) and that they effectively end anonymity in transactions and prevent both “illicit transactions” and “store of value”, because CBDCs – through tiered remuneration – “Allows overcoming the ZLB as one may impose negative interest rates on CBDC”.

To wit,

if digital cash is used to completely replace physical cash, this could allow interest rates to be pushed below the zero-lower bound…By allowing overcoming the zero-lower bound (“ZLB”) and therefore freeing negative interest rate policies (“NIRP”) of its current constraints, a world with only digital central bank money would allow for – according to this view – strong monetary stimulus in a sharp recession and/or financial crisis. 

This could not only avoid recession, unemployment, and/or deflation but also the need to take recourse to nonstandard monetary policy measures which have more negative side effects than NIRP.


Opponents of NIRP will obviously dislike this argument in favor of CBDC, and will thus see CBDC potentially as an instrument to overcome previous limitations of “financial repression” and “expropriation” of the saver.”


Later in the paper we get to what tiered remuneration means: the more SerfCoin you have, the lower your interest rate, even going negative beyond a certain point. It’s like a built-in wealth cap and tax at the same time, where the only way to avoid it, presumably, would be to spend it – thus shoring up money velocity.

It overlooks the obvious: that those with any meaningful amount of wealth would have the incentive to avoid storing any of it in a CBDC at all.

The BIS paper dropped around the same time a copy of the EU’s “Digital Euro Bill” was leaked and details published by Coindesk; notable in that is the provision that any digital Euro must function in an offline mode, protect privacy (i.e. be like cash) and must not be programmable.

It will be interesting to see which vision of CBDCs prevails (although the proponents of the BIS model could profess that tiered remuneration is more structural than programmable, but automatic and obligatory swaps of deposits to other accounts seems harder to rationalize)

That said, Christine Lagarde also clarified in April that “programability” will be done at the retail banking level:

“For us [central banks], the issuance of a digital currency that would be central bank money would not be programmable […] Those who can associate the use of digital currency with programmability would be the intermediaries — would be the commercial banks” 

…which gives us a hint at something else we’ve been pondering in our monthly coverage of CBDCs in The Bitcoin Capitalist (“Eye On EvilCoin” section): how will the big banks avoid being disintermediated out of existence when central banks create CBDC accounts directly to the consumer?

Maybe they’ll be the ones enforcing the expiry dates, negative interest rates, social credit scores and personal carbon footprint quotas and that will become the raison d’être of the Too Big To Fail Banks.

Today’s post is an excerpt from the my premium newsletter The Bitcoin Capitalist. Try it for a month here.

My next e-book The CBDC Survival Guide should be out this summer sign up for The Bombthrower list and get it free when it drops, and receive The Crypto Capitalist Manifesto in the meantime. You can also connect with me on Nostr or Twitter.


About the author 

Mark E. Jeftovic

Mark E. Jeftovic is the founder of Bombthrower Media and CEO of easyDNS.com, a company he co-founded in 1998 which has been operating along the lines described within these pages.

Leave a Reply

Your email address will not be published. Required fields are marked

  1. TBTF banks only transfer their risk onto a particular countries sovereign bond market. Th real threat to them is DeFI (which did an ath of 22% of all spot volume crypto volume in 2023 from 0% in 2018).

    Will be even higher during the next bull once alot of the self custodial BTC protocols come on line which will make it easier to use BTC on EVM chains.

    On chain derivatives has barely taken off yet, which will be come more popular as centralized counterparty clearinghouses build up massive amounts of sovereign toilet paper risk at the same time as increasing politcal/economic stress in global jurisdictions. << the real risk to TBTF banks

  2. The war – like the pandemic – is anything but organic. Instead, the war is the crescendo of the NWO dialectic as it will manifest gargantuan systemic problems demanding systemic foundational solutions.

    The conflict will decimate what remains of our supply chains at their most basic level, wreaking absolute havoc. Currencies – already on their last legs – will be deliberately hyper-inflated away all over the globe in order to pay for it. Our lives will be intentionally and irrevocably flipped upside-down.

    Everyone will be demanding something be done and the pre-planned solutions will be one-world-government and CBDCs (Central Bank Digital Currencies). These CBDCs will link with your social credit score, vaccine status, and carbon footprint in order to determine your eligibility – in real time – to participate or not participate in the economy.

    Excerpt from https://tritorch.com/united

    1. Sure.

      Kremlin Dot RU, (Russian version).
      Session of the Supreme Eurasian Economic Council
      A meeting of the Supreme Eurasian Economic Council was held in the Grand Kremlin Palace.

      May 25 , 2023

      Vladimir Putin: Dear friends, colleagues!
      Ensuring the digital sovereignty of the Eurasec is also on the agenda. Let me remind you that Russia initiated the process of establishing the partnership of the "five" in the IT sphere back in 2017. It is important that the member states of the Union form a single digital ecosystem, which would imply the integration of national systems of electronic public services and electronic governments of each of the participants of the "five". I can assure you that Russia has advanced far enough here and has made very good groundwork.

      I will also mention that this year the Russian chairmanship pays considerable attention to issues related to climate change. …

      It is important to continue the formation of free trade zones with interested countries, including inviting them to jointly use the international payment infrastructure available to the participants of the "five" in national currencies and digital currencies of central banks.
      Alexander Lukashenko:

      I would also like to touch upon a relatively new, but very relevant aspect of our integration – the climate agenda of the Union.
      President of Kazakhstan, Kassym-Jomart Tokayev
      Along with the development of physical infrastructure, it is extremely important to develop substantive solutions for the creation of a common digital transit system for goods. It should be reliable, but easy to use and based on advanced digital technologies.
      It is necessary to solve the issues of the use of electronic seals, guarantee systems of operational information exchange, as well as the development of a "Single Window" system. These measures will create a common digital multimodal corridor that will accelerate commodity flows and optimize supply chains.
      There are great opportunities for collaboration in the areas of digitalization…
      Sadyr Nurgozhoyevich Zhaparov, Kyrgyzstan

      It is necessary to provide an opportunity for citizens to perform the actions required for employment in another country in electronic format, including being in the country of their citizenship.

      As a first step, it is proposed to work out the possibility of recognizing the results of a medical examination of a worker who has passed in the country of departure for staying in the Russian Federation by analogy with the application "Traveling without COVID-19". You can expand its functionality and use it for new needs.
      Tajikistan, Emomali Sharipovich Rahmon
      The sustainable course of "green" development chosen by us creates conditions for the development of industries based on these principles. …

      Cooperation in the development of digitalization and artificial intelligence, banking and financial markets is also promising. Establishing cooperation in these areas…"
      https :// vigilantcitizenforums. com/threads/russia-through-the-hidden-eye-continuation.10926/post-558906

  3. Russia Confirms BRICS+ Nations Will Launch New Joint Gold-Backed Currency to Counter US Dollar Dominance

    In an unprecedented move that threatens to redefine the dynamics of international trade and economic stability, the BRICS nations reportedly plan to launch a new trading currency, backed by gold, at their upcoming summit in August in Johannesburg, South Africa, according to Russia’s Foreign Ministry.

    The BRICS group, an association of five major emerging national economies comprising Brazil, Russia, India, China, and South Africa, has captured the world’s attention with this plan. Over forty-one countries have expressed interest in joining the BRICS initiative and adopting the new currency, highlighting the growing discontent with the US dollar’s global dominance, thanks to Joe Biden.

    According to Russia’s Foreign Ministry, if African nations also show enthusiasm for this gold-backed currency, BRICS membership expansion could be a key discussion point at the upcoming Russia-Africa summit this year.

    This move towards de-dollarization symbolizes a potential end to the US dollar’s reign as the global reserve currency. The impacts of this shift will undoubtedly unfold in the coming months, hinting at the end of an era of US dominance and the beginning of a new era of economic stability and prosperity for BRICS nations.


    1. 02 Jun, 2023
      Economists have proposed schemes to replace the dollar in Russia's external settlements, the biggest prospects for expanding payments in rubles and yuan

      VEB Institute evaluated alternative dollar and euro settlement models with other countries

      A number of alternative models can replace dollars and euros that are toxic to Russia in international settlements. Among them are cryptocurrencies, a supranational unit, a DIGITAL "golden ruble". The pros and cons of the schemes were described by VEB experts
      https : // vigilantcitizenforums. com/threads/russia-through-the-hidden-eye-continuation.10926/post-558593

      On May 29, the EAEU Member States celebrate the Eurasian Economic Union's Day for the first time. The Treaty on the EAEU was signed this day in 2014 in the Republic of Kazakhstan.

      “Over the 9 years of its existence, the Eurasian Economic Union has become a key platform for cooperation and interaction between the Greater Eurasia States. We are ready to adopt important strategic decisions. Today, our association has ambitious objectives, including to promote investment development in the EAEU countries, to create a settlement system that is superior to SWIFT, and to develop an autonomous digital currency environment.[…]", emphasized Mikhail Myasnikovich, Chairman of the Board of the Eurasian Economic Commission.
      https :// vigilantcitizenforums. com/threads/russia-through-the-hidden-eye-continuation.10926/post-558768

      "24 May 2023
      Eurasian Economic Forum

      The Treaty on the Eurasian Economic Union, signed on 29 May 2014, sets out (along with a number of other programmes and concepts of the EAEU) the aim of improving payments and settlements between EAEU member states based on expanding the use of national currencies in mutual settlements. One document — the Concept for the Formation of a Common Financial Market — sets out the position that the development of a common payment space shall be based on principles of national security, independence, and equality of national payment systems.

      At the same time, restrictions imposed by third countries have a direct impact on the timing and cost of transnational payments. It is therefore important to ensure uninterrupted and seamless payments, both between EAEU nations in their mutual trade, and with third countries which are either key trading partners, or which have the potential to become so.

      This can be accomplished by employing promising financial technologies. These include digital currencies offered by central banks, smart contracts, a special accounting unit, multilateral clearing, and so on. Interstate Eurasian development institutions could play a key role in this regard. …"

      There are no such gold-backed national currencies (except in the propaganda of getaweipundit). There are plans for national and supranational gold-backed CBDC. Which is CBDC slavery cemented with gold plating.

  4. NO! We cannot let anyone mess with the Constitution ever! It is time for all patriots and people of faith and truth to stand firm against all the rubbish and evil to get this nation back to its founding roots NOW!'
    So much insanity is sprouting all over and making a mockery of all we ever were! How can so many want the debauchery and disgusting behavior of many and the insanity of thought…braindead fools is who they are! America will suffer for all this………….&………….pay for the evil and ignorance!

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

My next E-book will be "The CBDC Survival Guide"

Get on the list now - and receive your copy when it's ready.