Watch Out!! New CBDC System Could End The US Dollar!

There's no question that many countries Are trying to move away from the US Dollar most notably China the only Questions are how when and what it could Mean for the markets well believe it or Not but it looks like China and its Allies have been working on an Alternative cbdc system not a bricks Currency mind you but a brand new Currency network with help from the bank For central banks so today we're going To tell you all about this cbdc system Including where it came from how it Works when it will be implemented and of Course what it could mean for the Markets don't go Anywhere let's start with a bit of Context as most of you will know cbdc Stands for Central Bank digital currency It's a new type of digital currency Which is centrally controlled by the Central bank and the government this Makes it possible for central banks and Governments to surveil and control all Transactions what some of you may not Know is that there are technically two Types of cbdc retail cbdcs which will be Used by the average person and wholesale Cbdcs which will be used by select Individuals and institutions put simply There will be two cbdc systems one for The elites and one for us naturally all The dystopian stuff you've heard about Cbdcs relates to retail cbdcs and if

You've watched any of our videos about Them you'll know their dystopian Qualities are not the stuff of Conspiracy theories however there's been Comparatively little coverage of Wholesale cbdcs their qualities and the Plans in play to bring them About now the one thing that retail Cbdcs and wholesale cbdcs have in common Is that their development has been Coordinated by the bank for International settlements or bis the So-called bank for central banks the bis Has been helping central banks around The world roll out both kinds of cbdc System more importantly the bis has also Been helping central banks around the World ensure that their cbdc systems are Interoperable that is they can easily Send cbdcs between countries To that end the bis has been Spearheading multiple projects for So-called multi cbdc or M cbdc systems One of these projects is called mbridge Which of course stands for multiple cbdc Bridge mbridge is the result of a Collaboration between two wholesale cbdc Projects one in 2017 called lionrock by The Hong Kong monetary Authority and Another in 2018 called inthanon by the Central Bank of Thailand in January 2020 The two central banks created a Cross-country wholesale cbdc prototype To clarify the two central banks had

Been working independently on this pilot Until that time in February 2021 the bis The Central Bank of China and the Central Bank of the UAE came on board The cross country cbdc project Subsequently rebranded to EMB And completed a proof of concept test in September 2021 now here is where things get Interesting consensus one of the largest Companies working on ethereum was Reportedly chosen to develop the Embridge proof of concept then in September 2022 the central banks of Hong Kong China the UAE and Thailand Completed a successful pilot of embridge Per the press release quote over the Course of 6 weeks in 2022 the embridge Platform was put to the test through a Pilot involving real value transactions Among 20 commercial Banks from four Different jurisdictions in other words They bypassed the existing Financial System now it wasn't until one year Later that the US realized what was Going on per an August 2023 article from Bloomberg quote the Beijing backed Digital prototype for sending money Around the world without relying on us Banks is advancing so quickly that some European and American observers now view It as an emerging Challenger to Dollar Denominated payments in global Finance The Bloomberg article also noted that

The embridge MVP would likely be ready By the end of 2023 FYI MVP means minimum Viable product which is basically like An initial public Release then just a couple of weeks ago The UAE conducted its first eam transfer On embridge suggesting that the MVP is Now live however the bis and the Participating central banks have yet to Make an announcement to this effect the Last update about embridge from the bis Was in October last year around that Time representatives of the central Banks of Hong Kong and China revealed That the MVP will launch in the first Half of 2024 and by the way if you're Enjoying this video so far folks take a Second to smash that like button Subscribe to the channel ping the Notification Bell and consider sharing It with someone else who would enjoy it Hold up a second there guy sorry to Interrupt folks but I just wanted to Very quickly tell you about the coin Bureau deals page now this is the place Where we have put together some of the Very best deals and Promos in all of Crypto so you can think things like Exchange signup bonuses trading fee Discounts and money off of Hardware Wallets and much much more besides so if You want to check that out Deals is the place to go or you can just Use the link in the description of this

Video down below thanks very much and Now back to you guy but back to the Bis's embridge update from October last Year now as you might have guessed this Update contained detailed information About what to expect from the MVP in Contrast to previous mbridge updat This one received lots of press Attention presumably because Financial Journalists and others had by now got Wise to what was going on news flash a New Financial system is being created Before our eyes and the bis even implies This in its most recent update quote the Payment system underpinning crossborder Financial flows has not kept pace with Rapid growth in global economic Integration logic ically this means a New one is needed now what's fascinating Is that the bis blames the existing Shortfalls on Commercial Banks quote Banks are also pairing back their Correspondent networks and services Leaving many participants notably Developing economies without sufficient Or affordable access to the Global Financial system perhaps we're reading Too much into the words here but this Sounds like they're saying the existing Finan system sucks because it's being Increasingly weaponized against Individuals and institutions in the Global South this would make sense given That the US and its allies are

Increasingly using it as a weapon now Consider how the bis describes embridge Quote project embridge experiments with A multiple Central Bank digital currency Common platform for wholesale Crossborder payments it seeks to solve Some of the key inefficiencies of Crossborder payments such as high costs Low speed and transparency and Operational complexities at the same Time the project aims to safeguard Currency sovereignty and monetary and Financial stability for each Participating Jurisdiction probably Nothing now what's even more fascinating Is that the bis has otherwise been Surprisingly silent about embridge they Only have a few videos about it on their YouTube channel one wherein bis general Manager Augustine castens reveals that Embridge is jointly operated by the Member central banks it's a shared Ledger this begs the question of how Exactly embridge works well the answer Is in the accompanying documentation in The bis's October update which we'll Leave in the description for those Interested for starters the document Confirms that as with retail cbdcs Central banks will have total control Over their wholesale cbdcs specifically The document notes that only central Banks will be able to issue and redeem

Wholesale cbdcs and that central banks Will have the power to set limits on how Much wholesale cbdc their commercial Banks can hold note that most central Banks are technically owned by Commercial Banks seriously look it up Anyways as a cherry on top the document Specifies that quote each Central Bank Has a full audit Trail and transparency Of its cbdcs transactions this once Again confirms that cbdcs will not offer Any privacy a feature that's been denied By Central Bankers around the world Bald-faced lies in other words anyhow The documents authors reveal exactly What it is they're working on with Embridge quote commercial Banks often Lack direct relationships with offshore Counterparties and must rely on a Global Network of correspondent Banks to make Crossborder payments a typical Crossborder payment would involve not Only the payers and payes local banks But also their correspondent Banks which May be offshore again perhaps we're Reading too much into it but it sounds Like the goal isn't to get rid of all The commercial Banks just some of them Presumably the ones that aren't in Control of the central banks for Reference many believe that cbdcs can Only be rolled out when there are only a Handful of banks left anyhow this ties Into enbridge's technology which is

Where things get spooky obviously Embridge is a permissioned distributed Ledger AKA a permissioned blockchain Called MBL here's the scary part quote MBL is an evm compatible solution Referring to the ability of a blockchain To process transactions based on Smart Contract codes that can run on widely Used blockchain platforms and that's not All Quote cbdc issuance Redemption and Payments are implemented through smart Contracts written using the solidity Programming language the code is shared And open-sourced among the participating Cent banks in short MBL is a Permissioned version of ethereum however Whereas ethereum uses proof of stake as Its consensus mechanism MBL uses a novel Technology called dashing consensus Which quote uses proofs of partial Confirmation of a block validation to Reduce the time needed to achieve Consensus and to improve the overall Protocol performance according to an Intriguing article by crypto and macro Analyst Noel heson dashing consensus was Developed by a partnership between the People's Bank of China and singua University Z Jing Ping's Alma Martin Noel takes this as concrete evidence That China is the one driving the Embridge project which is arguably the Case now the documents authors also Claim that MBL preserves privacy and

Confidentiality using pseudonymous Addresses but you'll already know that Any promise of privacy is an illusion The use of pseudonymous addresses also Further underscores the possibility that MBL is just a permissioned version of Ethereum but wait there's more MBL is Also Iso20022 compliant for those unfamiliar Iso20022 is a messaging standard that's Being used not just by cbdcs but also Fast payment systems which are Precursors to cbdcs look no further than The fed's recently launched fed now fast Payment system and more about that in The description I digress now what's Crazy is that the central banks won't be The only participants on MBL quote Central Banks's MBL nodes are validator Nodes that take part in the consensus Protocol meanwhile Commercial Bank nodes Are ordinary MBL nodes that share the Same capabilities as Central Bank nodes But do not take part in the consensus Mechanisms it highlights how powerful Some commercial Banks really are so this Leaves one last piece of the puzzle and That's governance AKA control of the MBL This leads us to the steering committee Which quote is in charge of formulating Strategies and policies overseeing the Business management and guiding the Design building and operation of Embridge lo and behold the authors do

Not specify who is on the steering Committee nor where they are based one Video about embridge on the bis's YouTube channel suggests that this Steering committee will be based at bis Headquarters in barel Switzerland this Would make sense given that Switzerland Is a neutral country for now in any case The steering committee will be advised By four subcommittees the first of which Is focused on compliance the second of Which is focused on technology the third Of which is focused on legality and the Last of which is focused on policy it's Possible that consensus will be a part Of the tech committee all we're Wondering is whether any of the 25 Observing members of embridge will be Involved these are all central banks Mostly located in the global South the New York branch of the FED is one of the Only exceptions The authors note that 11 of the 25 Observing members have so far given Feedback on embridge this relates to the Road map for embridge which is all about That mvp the document notes that it will Consist of five Milestones the first Will be continued work on the technology And functions and also on legality and Governance the latter two however will Be the ones to pay close attention to to Bring you up to speed the countries Currently participating in embridge have

Been passing multiple cbdc related laws Over the last couple of years their work On embridge has also had the effect of Bringing these countries closer together With Hong Kong and the UAE working side By side on crypto the second milestone Will be quote investigating Technological solutions that can Supplement embridge operations including Novel Technologies to support FX and Liquidity and AML CFT compliance perhaps We're just reading too much into things Again but this almost sounds like they Might integrate more crypto features This wouldn't be surprising considering That the MBL appears to be a Permissioned version of the ethereum Blockchain this means that it should be Quite easy to copy and paste crypto Protocols and Primitives over it's Unfortunate that there are some entities Eager to help the bis with this Regardless the third Milestone will be To see how embridge can work with other Ongoing CrossCountry cbdc projects by The bis this is notable because it Implies that the other projects haven't Been nearly as successful this would Explain why embridge has a Wikipedia Article but the other projects don't to Put things into perspective there are at Least five other cross-chain cbdc Projects being worked on by the Bis while there have been many headlines

About these projects it seems that none Have evolved to the point that they're Being used recall that the UAE seems to Be using embridge already whatever the Case the fourth Milestone will be to Onboard additional central banks and Introduce new use cases although a Hong Kong spokesperson mentioned back in September That central banks are already Lining up to join embridge they didn't Specify which ones there is speculation That Jamaica Nigeria and Zimbabwe will Be the first to join embridge given that They've already launched their cbdcs the Catch is that they launch retail cbdcs Not wholesale Cbdcs but according to cbdc tracker no Country has launched a wholesale cbdc Yet so who knows from our perspective However it's possible that France will Be the next country to join embridge This sounds insane until you remember That French Bank BNP paribar actually Tested digital Yuan payments with the Central Bank of China in May last year Which is itself pretty insane French President Emanuel macron has also made Statements saying that the EU should Remain neutral if China and the US get Into a tussle over Taiwan or something Else for that matter make of that what You will now the fifth milestone for the Embridge MVP is quote and more with Three dots followed by an image

Showcasing all of the bis's cbdc related Initiatives we interpret this as meaning That embridge will not just assist the Bis's other cbdc projects but could Actually integrate with them in some way This would bring us one step closer to The global cbdc system that the bis Predicted one where every asset you own Is digitized and tokenized on a Blockchain That central banks and Governments control one where they can Adjust your ownership of these assets on A whim if you ever oppose their policies Again not a conspiracy theory you can Learn more using the link in the Description so this brings me to the big Question and that's what all of this Means for the markets well the short Answer is that It ultimately depends on How much adoption embridge sees remember That it's just four central banks for Now and it's only about launch its MVP It's not going to be a viable competitor Anytime soon but again this depends on The adoption if we see central banks Around the world announce that they will Start using the embridge MVP then this Could indeed weaken the US dollar that's Because the USD is often used as a Bridge currency when two countries are Exchanging non USD currencies this is Because there isn't always enough Liquidity to say make a massive trade in Swiss Franks for South African rand the

CHF Zar trading pair just doesn't have Enough money going through it to Facilitate large trades without losses The CHF USD and Zar USD trading pairs Have much more money in them however the Effect of this lack of liquidity for Certain currency pairs is that it's Created an additional demand driver for The USD and it's a big one considering There's between 25 and3 trillion of International trade each year the bis Estimates that 90% of related Forex Transactions involve the USD despite Only around 50% of international trade Being denominated in USD embridge not Only cuts out the need to exchange Non-usd currencies for USD in International trade but removes the need To use USD for trade entirely as some of You may have heard China actually bought 1 million barrels of oil from the UAE Late last year using the digital Yuan Though not via Embridge the caveat is that settling Trades in foreign currencies doesn't Necessarily mean that the countries will Keep these foreign currencies in the Uae's case it's unlikely that it will Keep large amounts of Ren MBE in reserve It would likely swap some or all that CNY for USD The same goes for every other country Put differently any foreign currency Trades eventually find their way back

Into USD it either happens at the outset Due to Forex stuff I just mentioned or It happens later when the currency is Used to buy USD because the USD is still The world's Reserve currency and the US Bond market is still the world's biggest With all that said though the fact that MBL is based on ethereum means that it Becomes possible to do all sorts of Innovative things that previously Weren't possible for instance it could Become possible for a group of countries To create a shared bond market that Could rival the US bond market the Caveat in this case however is that as Embridge becomes more powerful the Desire to control it will simultaneously Increase this could eventually lead to Governance disputes which result in Forks of the MBL much like past disput Have resulted in the forking of ethereum And other crypto blockchains this Forking will lead to fragmentation which Will make the two resulting systems less Powerful leaving the door open to Competition I'll remind you that mbridge Isn't the only CrossCountry cbdc project Out there it's possible that others Could fill the future power vacuum left By an MBL Fork come to think of it it's Possible that ethereum itself could Someday play this role after all it Consists of almost exactly the same Technology if anything goes wrong with

Embridge it's therefore possible that All the central banks involved would Switch to using ethereum or a Custombuilt layer 2 solution perhaps if This were to happen though then the Desire to control ethereum would Likewise increase because ethereum is Proof of stake all that's required to do This is to buy up enough eth to control The blockchain at least in theory with The USD as the strongest currency the us Could regain control now if you play out Any of these scenarios to their logical Conclusion the outcome is that Governments and central banks will Eventually adopt a digital currency System that's credibly neutral one that None of them can truly control it's Possible that Bitcoin will play this Role but it's much too soon to say even So one thing is for certain when the Embridge MVP launches the US and its Allies probably won't be too happy about It the result could be additional Geopolitical escalation that results in Anything from more conflicts to more Trade restrictions and that would make For a lot more volatility in the markets So buckle Up okay that's all for today's video Folks so if you found it informative Smash that like button to let us know if You want to stay informed subscribe to The channel and ping that notification

Bell if you want to help inform others Then take a second to share this video With them and if you happen to be into Crypto then you need to check out the Coin Bureau deals page it's got trading Fee discounts of up to 60% and sign up Bonuses of up to $50,000 on the best Crypto exchanges it's also got the Biggest discounts on the best hardware Wallets and much more besides these Deals are available for a limited time Only so check them out using the link in The description before they expire as Always thank you so much for watching And I'll see you in the next one this is Guy signing [Music] Off


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