Any advice, financial or otherwise, for us common-folk as to what we can do to prepare for this eventuation?
Well, I'm not sure how to prepare, but here's a taste of what to prepare for. I haven't watched the entire video (second link) and the source for the first link looks less than objective, but if this IMF fellow said what the article says he said, well, then he said it. (It's early here.)
From:
IMF Chief says Central Bank Digital Currency should be used alongside Social Credit System to control what people can and cannot buy
The live stream went under the radar for many but our buddy Tim Hinchliffe over at The Sociable kept an eye on what was going on. Tim posted a video of Bi Li, the Deputy Managing Director of the IMF, explaining how CDBSs can be programmed.
He said: “The smart contract would allow targeted policy functions, like welfare payments, consumption coupons, food stamps, etc.”
“With CBDCs, we can precisely control what people can and can’t own. Also, what kind of use this money can be programmed for, like food only.” – Bi Li
The key word he used was programmability.
He went on to say that: “CBDCs can’t solve every financial inclusion challenge, but they can work together with financial literacy and digital literacy.”
So, a CBDC would work with other policies like digital identities and digital wallets.
This goes hand in glove with what the World Bank Group described in November 2021. “Digital identity verification is essential to the operation of CBDCs, particularly in cross-border transactions. “
“Tradable digital assets must be tied to a digital identity system, which in turn should be tied to an automatic KYC and AML/CFT verification system.“
“This is a foundational step to the potential use of CBDCs, and emerging developments in regulatory and compliance technology may benefit central banks’ experiments in the digital currency space.”
Bo li described a CDBC as an eco-system, and that the data it would produce would be very valuable to third parties.
When questioned on how this transactional data could be used, Bo Li explained: “I can give you one example in China, those transaction data can be utilised by service providers in credit underwriting.”
Underwriting is the process by which the lender decides whether an applicant is creditworthy and should receive a loan.
“Those transaction data in terms of how many coffees I drink every day, where I buy coffee, do I use UBER every day and what kind of working hours I have.”
“Those non-traditional data can be very useful for financial service providers to give me a credit score and based on that credit score the service providers can give me a credit line without any face-to-face due diligence.”
He continues to say that this “will create value in addition to finance and that data can be very profitable, and that’s the value we are talking about to make it attractive to private sector players to join this eco system.”
Here's the video:
Central Bank Digital Currencies for Financial Inclusion: Risks and Rewards