Christine Lagarde recently announced ECB (European Central Bank) Policy Makers are discussing plans to create their own Central Bank Digital Currency.

In her previous role at the IMF, Lagarde gave a speech – Winds of Change: The Case for New Digital Currency.

She gave this speech in November 2018.

For that paper she referenced, named Casting Light on Central Bank Digital Currencies – a particular section is very interesting indeed…

“This note contributes to a growing body of literature on CBDC. Others have already explored this topic, including international organisations such as the Bank for International Settlements and several central banks (Bank of Canada, People’s Bank of China, Bank of England…….”

Remember, this report is from November 2018 – so Central Banks and powerful entities such as the BIS, Bank of China and Bank of England have explored this topic in detail for longer than one initially assumes.

There are important points to discuss, as it could have huge implications for society in general:

  1. The first is the trend towards a cashless society. The infrastructure required for using cash costs countries a fair amount every year. Also, younger consumers prefer the convenience of mobile payments.

  2. What does this mean for privacy (particularly financial privacy)?

  3. What does this mean for the most vulnerable in society who are heavily reliant on cash, such as the homeless?

  4. As well as this, any trusted third party is a security hole – thus these centralised institutions are honeypots for skilled hackers

  5. There is of course Facebook’s Libra and the recent news of China’s plan to introduce the Digital Yuan

Outgoing Bank of England Governor Mark Carney has stated that digital currencies can be used to reduce the reliance on the US Dollar


Demand is there, and Pandora’s Box is now opened


Here is my current take on the situation.


Things can change and you should conduct your own due diligence.

I think Central Bank Digital Currencies will happen and start the trend towards a cashless society.

This will also make it easier to collect taxes for Governments.

Unfortunately, I believe this probably will be a centralised network.

This means that funds can be frozen (which is bad for certain privacy conscious consumers), although it will mean that transactions will have reduced fees and that the ‘middleman’ aspect of the financial services industry will be hit (which is good for all consumers).

Therefore, Bitcoin will be (and already is my opinion) the decentralised hedge against bad monetary policy and centralised power structures.

Allowing for peer to peer transactions in a decentralised manner.

In terms of long term investment, I think that Bitcoin will hit $100K within 2-3 years, and $1MM within the next 15 years.

This will be a critical issue over the next decade that could have some very serious consequences for those who are not prepared for this transition.

As an investor, it is important to understand where the long term trend is heading.

Generally, this revolves around technological innovation that makes our lives more convenient and makes it more efficient to transfer value and thus drive progress and prosperity.

These developments are an indicator of that, but it is important to remember that those in positions of power and that control the flow of money are ruthless in their pursuit to maintain that power and maybe, just maybe, the guys at the NSA created a decentralised hedge against their incompetence…


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