Fedcoin: The U.S. Will Issue E-Currency That You Will Use

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The U.S. Federal Reserve will not only issue its own cryptocurrency but will also make sure Americans use it. That’s the prediction of currency guru Doug Casey who has an uncanny record of being correct about economic and political trends. His latest book, Surviving Fedcoin: How to Protect Yourself (and Profit) from America’s Coming Currency Change, is a public bet that the U.S. government will issue its own bitcoin which Casey views as “the last arrow” in its money quiver.

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fb521c2678Fedcoin refers to cryptocurrency and/or protocol established by a central bank. National banks could forge their own ‘bitcoin’ with comparative ease and bitcoin consultants have sketched possible scenarios on how.

In “Some Thoughts on Fedcoin – a Fed backed cryptocurrency” (March 9, 2015), Albert Szmigielski suggests, “[T]he Fed should premine all the currency that they want to issue on a blockchain….A premine happens where all (or part of) the cryptocurrency is issued in the first block, the genesis block. Then the Fed would just exchange the fedcoin for a dollar each.”

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Fedcoin would give the government God-like ability to track wealth. The justification will be to prevent criminal activities such as drug dealing and money laundering.

It would also become a more powerful engine of social control. In terms of privacy, Fedcoin could become the anti-cash. “If I’ve got a $100 bill in my wallet or a bunch of 10s and 20s,” Casey explains, “I can spend them on anything I want with anybody I want and nobody knows. With blockchain….[the feds] know exactly who’s getting the money and what it’s being spent for. It can be programmed [perhaps through a mechanism simiar to smart contracts] so that certain transactions can’t take place….So you are pretty well blocked in.”

Fat people could be prevented from buying sugar; gun owners could be cut off from ammunition; teenagers could be banned from buying beer, cigarettes or video games. The possibilities seem almost infinite. In doing so, Fedcoin would merely extend existing policies under food stamp programs that prohibit spending on alcohol, casinos or strip clubs. The efficiency would be so much greater, however, that the difference of degree would become one of kind. The government could “prohibit anything without even passing a law….If your Fedcoin smartphone or chip isn’t programmed to let you buy that, how are you going to get it?” Politically controversial items, like a gun registry, could become irrelevant.

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