The Federal Reserve Bank of New York (FRBNY) announced a 12-week digital dollar pilot involving major global banking giants, but critics fear it marks the introduction of a complete control state.
“The project, which is called the regulated liability network, will be conducted in a test environment and use simulated data, ” the FRBNY said in a statement issued on Nov. 15.
“In a 12-week proof-of-concept project—the Regulated Liability Network U.S. Pilot—the NYIC [New York Innovation Center] will experiment with the concept of a regulated liability Network (RLN),” the statement continued.
“RLN is a concept for a financial market infrastructure (FMI),” it said, and its stated goal is to facilitate digital asset transactions.
“This connects deposits held at regulated financial institutions using distributed ledger technology,” it added.
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“Distributed ledger technology” is an offshoot term for blockchain technology.
Among the participants are the Bank of New York Mellon, HSBC Holdings, PNC Financial Services, Toronto-Dominion Bank, Truist Financial, U.S. Bancorp, Mastercard, Citigroup, HSBC, and Wells Fargo & Co.
These companies pledged to use a snapshot of their customers’ funds to simulate real world digital money transactions.
A public contribution
According to the statement, the New York Fed will provide a “public contribution to the body of knowledge on the application of new technology to the regulated financial system.”
“This project will be conducted in a test environment and only use simulated data,” the statement added.
“It is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a retail or wholesale CBDC, nor how one would necessarily be designed,” it said.
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“The findings of the pilot project will be released after it concludes,” it continued, however, without specifying when the pilot would kick off, and thus, neither is it clear when it will end.
When the test is done, the participants pledged to publish the results, but lenders “are not committed to any future phases of work,” it stressed.
Nothing but praise
Of course, the project was hailed by many of its participants as the end to all financial struggles, such as monetary crashes, inflation, or whitewashing.
“The NYIC looks forward to collaborating with members of the banking community to advance research on asset tokenization and the future of financial market infrastructures in the U.S. as money and banking evolve,” Per von Zelowitz, Director of the NYIC, said according to the statement.
Tony McLaughlin, of Citigroup’s Treasury and Trade Solutions Division, said in a statement, according to ZeroHedge, “Projects like this, that focus on the digitization of central bank money and individual bank deposits could be expanded to take a broader view of the opportunity.” without elaborating on what those expansions may entail.
Dissenting voices
However, critics suspect that the project is a test run for the introduction of a mandatory central bank digital currency where every financial transaction will be traceable and lead to the complete surrender of citizen’s financial privacy.
“The timing is perfect…Wow, they’re super good. Thank God they were ready for this to start right after FTX…A safe crypto controlled by the government. This is how you save democracy,” one Twitter user remarked sarcastically.
Others point at the still more grim scenario of a potential rollout of a social credit system via the introduction of a Central Bank Digital Currency (CBDC), leading to the end of freedom of speech.
“This is a pivotal point in history. A paradigm shift at a level that people simply do not understand. Everything is changing. Freedom of expression has been under attack for years. A centralized digital currency tied to a social credit score will completely end freedom of speech,” another Twitter commenter said.
