Juno News - December 02, 2023


On C2C – The dangers of digital currency

Topics
Nigeria CBDC failure
Mentioned
Gleb Lissick Nigeria Rogers Andrew Lawton Show Hush Money
The legacy media got it wrong again! Why families are leaving the public school system

Episode Stats


Length

13 minutes

Words per minute

152.83

Word count

1,997

Sentence count

132


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

A Central Bank Digital Currencies (CBDC) is being discussed by the Bank of Canada as a possible replacement for cash. In this episode, we talk with Gleb Lysik, a writer with The C2C Journal, about the pros and cons of introducing a central bank digital currency.

Transcript

Transcript generated with Whisper (turbo).
Topics generated with Qwen2.5-3B-Instruct.
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.000 In particular, I want to just revisit this idea of central bank digital currency that I was talking about earlier on in the program briefly and also a couple of weeks back because this hasn't gotten a lot of coverage in Canada.
00:00:21.940 Part of the reason is because we don't have a firm ironclad proposal, but we do know that the Bank of Canada is proceeding with this.
00:00:28.460 They are talking about it, if you read their materials, as though it is inevitable, as though it's just this thing that's going to come.
00:00:34.980 We're all mere passengers and they're just going to shepherd us through this transition.
00:00:39.840 And if you're someone who, like most people in Canadian society, walks around using your debit and credit card everywhere, you're probably thinking, all right, well, digital currency, what's the big deal?
00:00:48.320 Well, electronic banking and digital currency are two very different things.
00:00:53.120 And we'll talk about why that is now with Gleb Lysik, who is a phenomenal writer with the C2C Journal.
00:00:59.360 We've had him on before about his work there.
00:01:01.480 And in particular, he has a great piece out this month, Hush Money, The Untold Dangers and Delusions of Central Bank Digital Currency.
00:01:09.980 Gleb, good to have you back.
00:01:10.920 Thanks for coming on the show today.
00:01:13.080 Hey, nice to, thanks a lot for having me back here.
00:01:16.340 So let's talk first off with what Central Bank Digital Currency is, because I do think it's important people not conflate it with online banking and electronic finance, which is a pretty ubiquitous part of the finance system right now.
00:01:30.820 The major difference in between CBDC or Central Bank Digital Currency is that it is controlled by the Central Bank, right?
00:01:39.640 So the Central Bank has it has a liability to you for that currency.
00:01:47.080 It's very similar to cash in that respect.
00:01:50.760 So if you have a bank note, you can always go to the Central Bank and say, well, I need something for it.
00:02:01.340 And what we have right now is with commercial banks, you have the money, your online banking.
00:02:11.000 These money are, they belong to the, they sit with the commercial bank, right?
00:02:17.520 And they, they, they don't really, they're not affiliated with the Central Bank for the most part, the Central Bank just offers some insurance that these banks will pay you, let's say cash.
00:02:35.300 You can withdraw cash if you have an online banking account.
00:02:37.780 So that's, that's the, that's the major difference, the liability, the liability of CBDC, CBDC as with cash lies with the Central Bank, the liability of the digital money we use now lies with the commercial banks.
00:02:54.340 One of the things that the government, the Bank of Canada has told us on this is that it will remain available.
00:02:59.860 It's an option, it's voluntary.
00:03:01.280 It's not basically outlawing cash, but I've heard some people who don't really buy that.
00:03:08.000 I mean, we already see in some ways aspects of a society that's moving beyond cash.
00:03:12.260 There are some major retailers that have said they won't take cash in certain venues and COVID was certainly a part of that.
00:03:17.480 Do you buy from what you've seen that a Central Bank digital currency would coexist alongside cash or do you think it would really eventually be a replacement?
00:03:27.780 That's definitely how it is explained to everybody.
00:03:30.900 Well, everybody, it's not widely advertised as to how CBDC exactly is going to behave in Canada, what it's going to do.
00:03:38.880 But certainly the way the Central Bank, the government is assuring us is that if CBDC gets introduced, it will not replace cash.
00:03:50.040 It will not replace your online banking account or anything.
00:03:53.080 It will just be an alternative, a third type of a currency.
00:03:56.740 Obviously, if you read my article, you will probably get from it that I have personally.
00:04:06.820 I doubt that this is the case.
00:04:09.060 There's no reasons for CBDC to be introduced as a third method of payment.
00:04:13.460 There's absolutely no impetus, no incentives from the people who use money.
00:04:19.780 Right. There's even Central Bank itself did the research on that.
00:04:24.820 There's absolutely no need for it.
00:04:26.380 Right.
00:04:26.960 So that begs the question.
00:04:29.560 If the CBDC gets introduced, then obviously it needs to take its place over something and it's over something is probably going to be cash.
00:04:42.220 And we have examples in the world how it's been introduced that I explained in my article what happened in Nigeria, for example, where they went live with the CBDC under the same promise that CBDC is not going to replace cash.
00:04:56.820 And as soon as the CBDC, well, not as soon as a year after from the introduction of CBDC, they just cancel cash there.
00:05:03.980 And half of the population in Nigeria relies on cash and they canceled it.
00:05:09.940 Right.
00:05:10.340 Despite of the promises.
00:05:12.620 I'm not going to claim that it's going to happen exactly the same in Canada.
00:05:16.000 Well, I'm just speculating on that.
00:05:18.100 But I'm just saying that the promise is made.
00:05:22.320 It's not going to replace anything.
00:05:24.300 It's just going to be introduced as an option.
00:05:26.820 It's a convenience.
00:05:28.280 But we know how it works for the most part.
00:05:33.320 It gets introduced for a reason.
00:05:35.520 And right now I don't see any reason other than replacing something which is probably going to be cash.
00:05:40.740 I want to talk about the Nigeria case in just a moment.
00:05:43.680 But before we get there, Gleb, I wanted to ask you about the offline aspect.
00:05:48.360 I've mentioned when this topic has come up on the show in the past.
00:05:50.920 We have a very real and very recent example of what happens when our telecom infrastructure is just hampered instantly, which is when the Rogers outage happened.
00:06:00.500 I think it was about a year and a half ago or 15 months or so ago.
00:06:04.760 And you had retailers who were entirely reliant on Rogers to run their debit and credit card terminals that couldn't do transactions.
00:06:11.680 If people didn't have cash, they were up the creek without a paddle.
00:06:15.440 And, you know, the central banks that are pushing CBDC kind of claim that they can find a way around this.
00:06:22.660 But really there has been no solution proposed for what happens in a situation in which, for whatever reason, people cannot use an electronic device, in which case you have power outages or whatnot.
00:06:33.640 But they kind of avoid that that's a big, giant, glaring problem in this.
00:06:40.000 Yeah, absolutely.
00:06:41.320 It's pretty obvious to me, it should be for anybody, that if you want to do an electronic transaction between two parties, a seller and a buyer, at least one device needs to have power, right?
00:06:59.300 I mean, they are transmitting electromagnetic waves to exchange the information, so you must have power.
00:07:06.020 There's no question about that.
00:07:07.640 Whereas with cash, obviously, you just pass on the banknotes.
00:07:11.260 So fundamentally, everything, every solution about CBDC, and there are lots of interesting innovations, you know,
00:07:21.580 that allow to exchange this currency in sort of a semi-offline mode, but they're all nowhere near in what cash offers in this respect.
00:07:37.000 So it's a very long discussion.
00:07:40.200 It's like all the offline solutions I couldn't fit into my article.
00:07:44.200 So they're pretty complicated, and you need to consider various scenarios.
00:07:49.440 There's like a long-term outage.
00:07:52.040 Was it just a short-term outage?
00:07:53.640 How much cash you can exchange sort of in that semi-offline mode with the other party?
00:07:59.560 Yeah, it's a bit convoluted, but again, cash is such a simple solution to all of that problems that CBDC brings up when we start talking about offline operations and stuff.
00:08:11.560 So I'm not sure if I'm answering questions.
00:08:15.040 Well, you are, and I said I wanted to go back to Nigeria because Nigeria had this pilot project originally, and it had very, very little uptake.
00:08:24.360 And this is a, you know, very large country.
00:08:26.420 Half of them are, as you say, reliant on cash.
00:08:28.780 They did this, and I think it was 0.8% of people started using this, and then they expanded it.
00:08:33.800 And what happened?
00:08:34.580 Yeah, so the way it started in Nigeria is that they introduced CBDC in 2021, and just for the people who already had bank accounts, just to see what the uptake is going to be, I guess.
00:08:51.800 And they only, they didn't really see much of an adoption of CBDC.
00:08:58.460 It was already obvious.
00:09:00.260 Only 0.8% of that banked population downloaded the wallets, and they weren't using them at all.
00:09:09.740 I guess some curious people just downloaded a new free application to their phone and didn't really know what to do about it.
00:09:18.120 And that's pretty much was the level of adoption, so not much that.
00:09:23.220 And a year later, the government, seeing those results, maybe they didn't want to take that as a voting choice of the constituents.
00:09:38.400 They just decided to double down, and they just canceled cash and requested everybody, including those who did not have accounts with banks.
00:09:50.680 They just wanted them to bring their paper money to the bank offices and exchange that for the digital currency.
00:09:59.320 So that was a great failure, and people were literally starving there because they ended up with the paper money that was worthless, that would not be accepted anywhere.
00:10:10.080 So, and up until this moment, Nigerians don't understand what's going on.
00:10:16.940 They don't understand the value that CBDC offers.
00:10:20.640 The adoption is happening, but that's only because of the artificial cash shortages.
00:10:29.020 People just don't have any other choice.
00:10:32.000 Well, you mentioned in your essay here, the advisors from the World Economic Forum and the International Monetary Fund.
00:10:39.300 I mean, were they pushing this on Nigeria as just a massive experiment, or was this the Nigerian government that wanted to do this and then asked for some external advice?
00:10:49.220 Or do we not know kind of who the initiator was?
00:10:52.320 Yeah, yeah, they definitely had the advisors and consultants from the IMF and the World Economic Forum.
00:10:59.740 I would probably put more emphasis on the IMF.
00:11:04.900 But were they the ones pushing this?
00:11:06.940 Did they kind of look at Nigeria as being basically a lab for this CBDC experiment?
00:11:12.660 I honestly don't know much about who was pushing who, right?
00:11:17.080 I just know that the consultants were there.
00:11:19.240 They were pushing that agenda.
00:11:21.420 And I just don't understand why, because actually, if we look at the World Economic Forum, they have a pretty decent framework for introducing CBDC.
00:11:32.380 They give you a very balanced approach to what are the cons and pros of CBDC and what are the risks of etc.
00:11:40.960 So I was actually quite surprised at how I'm biased that that framework was.
00:11:45.920 But if in Nigeria case, it just didn't work, right, for some reason, if they followed through that very same framework, they would have said,
00:11:58.800 No, guys, sir, you should stop immediately.
00:12:02.020 Like, there's no way it's going to work, right?
00:12:04.680 Instead, they just pushed it through onto the starving people.
00:12:08.560 So it just blows my mind.
00:12:10.880 Obviously, I'm not privy to all the details as to who exactly did what there and why.
00:12:16.720 But you can judge the results as to what happened there.
00:12:22.020 It looks like they were just pushing that, whether it was coming from the government or from IMF or World Economic Forum.
00:12:29.680 Well, obviously, together, they decided to push.
00:12:35.560 Well, I appreciate you bringing it up.
00:12:37.460 I hadn't actually read about the Nigeria case until you put it in your essay there.
00:12:40.740 People can read that at c2cjournal.ca.
00:12:43.200 Hush money, the untold dangers and delusions of central bank digital currency.
00:12:48.060 It's a lengthy read, but definitely a good one.
00:12:50.640 Gleb Leisik, the author, joins us now.
00:12:52.600 Gleb, thanks for coming on, as always.
00:12:54.060 Good to talk to you.
00:12:55.200 Thank you very much.
00:12:56.080 Thanks for listening to The Andrew Lawton Show.
00:12:58.500 Support the program by donating to True North at www.tnc.news.