Reserve Bank wants a Central Bank Digital Currency in Australia
Feb 25, 2022 – Senator Malcom Roberts – A Central Bank Digital Currency goes hand in hand with the idea of a Digital Identity. With all of your information and money stored online, central banks or governments could turn off your access to money and society in the blink of an eye.
The last time I asked the Reserve Bank about a Central Bank Digital Currency, there seemed to be no real plans. Conveniently, they are now considering it, just as the feared Digital Identity Bill proposal is being pushed by Government.
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[Chair] Senator Roberts.
Thank you. Thank you for appearing again. I’m gonna start with a sincere compliment, Mr Debelle. I’ve been impressed with your frankness and your directness and your succinctness. You convey a lot of confidence and I would also like to start by complimenting the Reserve Bank for the answers I received in the last estimates, which after examination were complete and factual. So question one, Chair: the Reserve Bank has now signed on to the International Central Bank Digital Currency Platform, Project Dunbar, and I quote, “aims to develop prototype shared platforms for cross border transactions which will allow financial institutions to transact directly with each other in the digital currencies issued by participating central banks.” Now, as I understand it, Mr Debelle, Australia will be testing this platform, along with Malaysia, Singapore, and South Africa, which suggests we have a digital currency to use, to test the platform. Where is the Reserve Bank on the development process for the Reserve Bank Digital Currency and what’s the timeframe here for testing and implementation?
Hello, pass that one to Ms Bullock, please, Senator, she’s the expert in this space. Well, has carriage of this, at least.
Thank you, Senator. So, the first thing to note is that Project Dunbar is a proof of concept, so I’d distinguish it from a pilot. Pilot is where you actually have actual real money. This isn’t a pilot, it’s actually a proof of concept. So really, what it’s about is going through the technical infrastructure you might need, the legal arrangements you might need, to patent requirements you might need to set this sort of multicurrency approach up. So there is no Central Bank Digital Currency, we don’t have one, the other central banks don’t have one, it’s purely a proof of concept, if you like, It’s a little bit of a desktop exercise with a little bit of experimentation with technical approaches to do it, so there’s no actual Central Bank Digital Currencies involved.
Okay. Thank you. Oh, sorry.
I was just gonna go on to your second question, if that’s all right.
So, your second question was about where we are at with Central Bank Digital Currency. So, we’ve had a multiyear process in this. We’ve done some small experiments. We’ve experimented internally with the concept of a wholesale Central Bank Digital Currency. Again, it’s not real, it’s just sort of a mock-up if you like, and we’ve done that internally to see whether or not individual banks could perhaps use it for settlement between them. We’ve also expanded that fairly recently. There was a report in December, Project Atom, which was an experiment again with Commonwealth Bank, National Australia Bank, Perpetual and Consensus and ourselves. And the concept here was, again, a proof of concept. It wasn’t a pilot; a proof of concept to see whether or not a Central Bank Digital Currency, paired with tokenized syndicated loans, would actually make a more efficient way of having syndicated loans transacted through the economy. We released the report on that in December and I think it proved that there were some efficiencies in this area, but –
Excuse me, did you say there were inefficiencies?
Efficiencies. So, syndicated loans is a very manual process, and quite lengthy, and what the project proved was if you tokenized the syndicated loans, you had a Central Bank Digital Currency to transact amongst the various players in the syndicated loan, that actually that made that a much more efficient process. Whether or not you can do it with normal payment systems as well is another question, but we didn’t test that, so there’s that. We’re also participating, as you mentioned, in Project Dunbar with the Bank for International Settlements Innovation Hub and those three other countries, and we’ve recently formed ourselves a Central Bank Digital Currency Group in the Payments Policy Department, and we’re going to be engaging with the Digital Finance Cooperative Research Centre, which is looking at all sorts of things digital. We’re going to be engaging with them on looking at Central Bank Digital Currencies as well, so that’s a little bit of a potted history of where we’re at with our work on this.
Okay. Thank you. If a new digital currency is to be created out of electronic ledger entries, will existing amounts of cash be converted into digital dollars? The public may be confused about how this is going to work. Can the Reserve Bank please provide a simple overview of what happens after the project gets the green light? Where’s the value coming from? So when we have a cash?
What we’re assessing, Senator, really, is exactly that: their value, given we have a pretty decent payment system as it is, which includes cash, clearly, but also electronic settlement, and you sort of nailed the question, really, which is: is there value in this? Is it worth the investment at this stage or not? Michelle, I don’t know if you wanna add anything to that.
The only thing I’d add, Senator, is that there is no suggestion in which we are getting rid of cash. This concept is not to replace cash and it hasn’t even been decided that we would do it. This would be a decision not for the Reserve Bank, but for, in fact, the Government, and it wouldn’t be replacing cash, so that’s very clear.
When I was talking about the value, I wasn’t talking about the value of the process. Is it gonna be more efficient? Is it worth doing, so I appreciate your answer and that quite clearly, that’s one valid interpretation of my question, but what I was getting at was, if someone’s got so much value in Australian dollars, how will that be converted into digital currency dollars or whatever the currency is? Will they still have that purchasing value?
Sure. So the way that most central banks are looking at this around the world is that the central bank itself won’t be providing people with digital money. It will work like cash does. So at the moment, if you want cash, you go to your ATM or your bank and you withdraw some cash from your bank account. A digital currency, if we had one, would work in a very similar way. You would go into your bank and your bank would have presumably a digital wallet, or you’d have a digital wallet, and you would take some money out of your bank account and you would put it into Central Bank Digital Currency, just like cash. So you can think about it in a very parallel way.
Yes, but if someone’s got $2,000 in cash today in their bank account, will that give them the equivalent purchasing power if there’s a conversion into digital currency?
Yes. Correct. It would be exactly the same as if it was a $100 bill or $100 on your mobile wallet.
Okay. Thank you. Now the BIS is involved. So, one specific case: our foreign exchange reserves are used to settle international transactions. These will now be replaced with the Reserve Bank Digital Dollars, if it goes ahead. Is the process to simply replace the US dollars we have in reserve with US Government-issued crypto dollars or a similar value-basis digital currency?
[Debelle And Bullock] No.
[Bullock] Do you wanna take this?
Straight to the chase: no, Senator, we would still continue to hold $USD reserves in the instruments we currently hold them at, which is primarily US Treasuries.
Okay. That’s pleasing to hear. What are the risks in doing this, for example, if this was handled badly, not necessarily from the Reserve Bank, but for the people you’re dealing with overseas, if the system wasn’t tight? What are the various risks that you can foresee that need to be managed?
This is why I think there’s a lot of water to flow under the bridge before any advanced economies really have launched into this. There are obviously cyber issues. You need to make sure that the system is secure. Overseas consultations demonstrate that people are very concerned about privacy, which is a very valid concern, but by the same token you’re also concerned about a use of digital currency for criminal purposes, so there’s a balance there. Another concern, that is one that most central banks identify, is concerns about the banking system and whether or not there might be a flight of deposits, if you like, to the Central Bank Digital Currency, which would have implications for banks’ balance sheets, potentially make it easy to run on banks, if people were concerned about banks, so there’s a whole lot of financial stability risks and issues associated with it. That’s just a sample of some of the issues that need to be considered if we were going to go in this direction and have some sort of what I would call “retail” Central Bank Digital Currency.
Thank you. Two more questions, Chair. Digital or cryptocurrency is not backed by any asset. It’s literally an exercise in trust that the government can protect the value of someone’s currency. Is this the time now to start talking about getting an asset backing behind this new currency, such as gold?
Senator, just like cash at the moment, it would be a fiat currency, which is to say it isn’t backed by anything. And you’re right. It’s all about trust in the institutions of the country, in the government, in the Reserve Bank, so in that sense, it would be just like cash, if we were going down this route, it would be an unbacked currency.
But it’s backed by the government’s capacity to raise revenue from its citizens, basically.
Backed by the government’s capacity to raise revenue, did you say?
Thank you. Last question. During COVID, there’s been a hell of a lot of money spent on non-productive outcomes. As much as food and rent can be considered non-productive, they’re essential, but they’re non-productive, the outcome of long-term borrowing for short-term gain is inflation. Is spending on productive capacity: roads, railways, bridges, dams and irrigation in this recovery phase, likely to produce a lower inflation outcome across forward estimates than continuing to spend on what can only be described as economic sherbet?
I don’t know, I mean, that’s an an interesting question, Senator. I mean, I’m not sure I would draw that distinction, I think food I would regard as a pretty productive and essential service, an essential thing for people to consume, so, I mean, we build roads for a purpose, not just because, which is to satisfy people wanting to use them, and the same with food and same with shelter, so not quite sure how we can draw such a clean line between what’s productive and unproductive.
Well, perhaps, well food is essential, as I said, perhaps spending on non-productive assets: entertainment, instead of travelling overseas, people are buying new cars, that kind of thing. What I’m talking about is spending on such items that may be essential, but not producing increased wealth, could lead to inflation. That’s the risk. On the other hand, spending on something that increases productive capacity, like a dam with irrigation systems to supply increased food productivity and lower the cost of food, leaves people better off and wealthier overall. That’s what I was getting at: a productive capacity, rather than just consumption.
There is a reasonable amount of dollars investment in infrastructure at the moment, that’s increased quite a bit, both from the Commonwealth and the State Governments, so that sort of spending is absolutely happening. Again, I’m still not quite sure I would draw such a clean distinction. In the end, people consume what they want to consume and I’m not sure it’s up to us too much to tell them what’s good and bad about that, within reason.
Well, that’s a wonderful statement to hear coming into my ears now. I love that, but yeah, sorry?
I said, “I thought you’d like that.”
So what we’ve got, though, is an acknowledgement that there is money being spent on infrastructure. You’ve answered my question. I just personally believe, Chair, that we need to spend more on improving our productive capacity. Thank you very much. Again, Chair, I’d like to put on record that the Reserve Bank always answers quickly, succinctly and factually. So thank you. It’s really appreciated.
[Chair] Dr Debelle, you’ve got a fan there.
[Roberts] Yep. He has.
[Debelle] Thank you.
Why should you be worried about the Digital Identity Bill? Here’s just a few of the reasons:
YouTube | Transcript | “1984: THE BILL” – THE TRUSTED DIGITAL IDENTITY
As a servant to the people of Queensland and Australia, tonight I draw attention to a new government bill, the Trusted Digital Identity Bill 2021. This is no time for subtlety. The Trusted Digital Identity Bill represents a watershed moment in Australian history. We stand at the divide between a free, personal-enterprise future and a digital surveillance age in which the government sits in the middle of every interaction Australians have with each other and with the world. It achieves this in the same way China does, creating a digital identity that forms a central part of a person’s life. Call it a licence to live.
This bill removes the privacy protection currently preventing this exploitation and allows the government to keep one massive data file with everything the government knows about you and to sell that file to private companies overseas. Those companies can add your private sector data to build up a complete digital record of every Australian—everything: medical, shopping, whom we associate with, social security, veterans services, travel, web viewing, employment, our social media comments. Everything will go on the record and be available to any large corporation that can pay for access. We will each have to pay to access our medical records from that corporation. In Morrison-Joyce news speak, it’s a ‘human-centric digital identity’—sounds great, doesn’t it!
This has frightening ramifications for government and corporate control of everyday Australians. Policy documents attached to this bill promote digital identity as a benign housekeeping bill to fix antiquated and incomplete government databases ‘to save a few minutes filling out that government form’, they say. ‘This will reinvigorate the economy after COVID,’ they say. What the economy really needs is for the government to get the hell out of the way and let Australians lift ourselves up through our own hard work and enterprise—remove vaccine passports or, as I call them, digital prisons; ditch QR codes; stop spreading fear; and let the Australian spirit do the rest.
One Nation believes in technological advancements and in streamlining services. We would love to see a bill come forward to clean up the government’s databases and improve the online experience of Australians trying to access our own data. This is not what the digital identity bill does. Digital identity will do nothing to fix the government’s IT, yet it creates a crown-jewel scenario for hackers to steal not just one set of government data but, rather, personalised treasure troves. Far from safe, the Australian government’s is one of the most hacked databases in the world. This year, medical records became a highly sought after target. If you want to know the direction in which global policy is headed, watch what the hackers are trying to steal.
Another concern is vaccination. Digital identity links medical history with consumer purchases. What’s to stop a government locking out an uninjected person from the economy, as more than one state premier already threatens? It is a social credit system. We should not have to ask these questions, because the power should not exist. Digital identity represents the cornerstone in a larger World Economic Forum and United Nations campaign to implement a global digital identity system.
Why is the Morrison-Joyce government allowing the World Economic Forum to write Australian legislation? This bill is a copy-and-paste from the World Economic Forum’s Global Digital Identity Project—part of the digital transformation initiative. The Morrison-Joyce government brought this package to Australia, and this bill will start the World Economic Forum package’s implementation. It’s designed to shift the global economy away from private ownership and into what the World Economic Forum calls an ‘access model’—in other words, control. Australians have heard the slogan of the globalist Build Back Better campaign. You will own nothing and you will be happy. The goal of digital identity is life via subscription. Put simply, everyday Australians will not own assets like a house, car or furniture. Instead, they will rent these from corporations—corporations that the cabal owns—or, as the UN calls them, ‘corporate partners’.
When they talk about us having less, or living sustainably, or living in a closed-loop economy, what they mean is: we will have less—a lot less—so that billionaires can have more. It’s this principle that informed the Liberal Party’s billion-dollar Digital Economy Strategy 2030 which is reliant on the Trusted Digital Identity Bill. Indeed, the bulk of the supporting commentary around digital identity and the Digital Economy Strategy 2030 obsesses about how the government will be able to manage Australia’s economy onto a so-called sustainable path—a UN path.
For a glimpse into this future, we need only look at the food menus on display at the UN climate summit that the Prime Minister attended earlier this month. Each dish listed its carbon footprint, with a United Nations pledge to reduce the carbon footprint of every meal consumed across the world, including ours, every day. What happens when a government, obsessed with pursuing digital net-zero policies, decides to encourage people to reduce the carbon footprint of our food choices? We already know the UN is pushing vegetarianism and limiting red meat consumption to one mouthful per person per day.
The level of control this legislation provides to the UN is frightening. Instead of allowing businesses to seek out and explore natural market forces and people’s needs, digital identity is a tool to introduce a controlled economy under international direction, where implementing something like net zero can be mandated individually.
One Nation rejects providing more power to unelected, unrepresentative, unaccountable UN bureaucrats to control everyday Australians in what we can eat, where we can travel, how much water and power we can use, under the threat of being shut off from the ability to feed, clothe and house ourselves.
It’s evident that this policy robs businesses of control over their own future. The government will dictate each and every business’s future interactions with customers and suppliers. Small and medium businesses will have to contend with a massive technology overhead and be forced into an unfair David-versus-Goliath fight against large, incredibly well-informed businesses that are in the globalist information-sharing club. More Australian businesses will fall to foreign multinationals.
Digital identity is the end of personal privacy, anonymity, confidentiality, sovereignty and choice. Despite the bill repeatedly insisting that it offers a voluntary service to make life easier, it’s clear from the full documentation that digital identity will be made compulsory in the same way that vaccine mandates are now.
With this bill, once again, Prime Minister Morrison is trying to ban cash. One Nation was successful in striking the government’s cash-ban bill from the Senate Notice Paper last year, after public outrage. Cashless payments are popular, but the complete loss of cash opens up an entirely different conversation. Cash is a safeguard. When we have cash, we have purchasing power. A digital identity, though, could easily limit our individual purchases based on government or corporate policy. So, under this bill, cash has to go and, under this legislation, cash will go.
Australian banks have already voiced their interest in the Trusted Digital Identity Framework, saying it will allow them to create a rich view of their customers. Most people do not want banking institutions creating rich data maps of their personal and private information. This bill will allow banks to micromanage our spending in the name of whatever social justice cause banks are promoting. The design of the new payment platform that the Reserve Bank of Australia introduced in 2018 and forced on all Australian banks, allows for the addition of a digital identity. In fact, the basic architecture of the new payment platform was designed for a digital identity. Under the new payment platform, every transaction, every retail sale, interbank transfer, pay, online sale, all come through one central server. This allows the digital identity of each party to be checked and approved before the payment is finalised. Just how long have the World Economic Forum and the UN been planning this? For decades.
In China, a person’s phone controls their lives. The same thing has happened in Australia during COVID. Without a phone to prove our identity and to cough up medical data, citizens are excluded from society. The need to carry a phone at all times—charged and ready to offer their digital identity to buy something as simple as a cup of coffee—can be replaced with a wearable or an implantable chip. I can’t wait to see how they sell that! All forced at the start of a social credit system.
The Trusted Digital Identity Bill makes a wild claim that it will solve online fraud and protect businesses and customers. The government even put ‘trusted’ in the title, so it must be true! Anyone with any experience in online fraud knows this system will not solve fraud; it will likely make it worse.
The reason we have a Constitution is to enforce absolute boundaries to stop politicians taking liberties with our liberties. The behaviour of politicians during COVID has shown everyone how quick many politicians and bureaucrats were to abuse rights and to punish and coerce citizens into undergoing untested and unproven medical procedures. This bill will give premiers and the Prime Minister the power to take such action at any time. What a terrifying prospect! For this government, once the public understand how much we’re going to lose under the global reset, oppression becomes essential. This bill becomes the framework for that oppression. The Trusted Digital Identity Bill is a global surveillance and control mechanism that profit-hungry corporations and power-mad politicians drafted and crafted. It aims to introduce the total-control economy where citizens own nothing and have no freedom and no choices.
One Nation opposes this inhuman dystopian future that the United Nations promotes as the great reset, and we condemn this parliament for signing on to it. The only way to stop this monstrous plan is, at the next election, to throw out the globalist cheer squad—Liberal, Labor, Nationals and Greens parties—and develop a potent One Nation representation to hold government accountable and return parliament to serving the people of Australia.
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