Following on from an article I published last month about the Bank for International Settlement’s new Innovation BIS 2025 project, the institution has since made a series of announcements regarding the initiative, along with details of key personnel changes within the ranks.
Beginning with the personnel, Bank of England governor Mark Carney is stepping down from his roles of chairing the Global Economy Meeting and the Economic Consultative Committee. Both groups convene at the BIS headquarters in Basel every two months in what are known as the bank’s bimonthly meetings. Although the BIS do not officially disclose the timing of these meetings, by judging the movements of central bankers they appear to take place every January, March, May, July, September and November.
Carney’s tenure as chair of these groups ends on January 31st – the same day he is due to step down at the BOE. I would take this news as confirmation that Carney will not be extending his stay at the BOE past January. To add weight to this likelihood, Chairman of the Board of Governors at the BIS, Jens Weidmann, is quoted in the press release as thanking Carney ‘for his contributions in various capacities to the BIS and the international central banking and regulatory community since 2008.’
From what I understand about the BIS, they usually take decisions over the long term. So the appointment of Jerome Powell as Carney’s successor would indicate to me that his job at the Federal Reserve is not under threat. A running narrative since the spring has been how Donald Trump could choose to fire Powell as Fed Chair at any moment. But when asked in September by Fox News about Powell’s position, Trump answered, ‘It’s safe, yeah, it’s safe. I mean, sure, why not?.’
Despite threatening to fire Powell on multiple times, in reality Trump does not have the authority to do so – something that Powell himself remarked upon back in March. A cursory look into the Fed’s history shows that rather than being a federal institution, they were conceived by private banking interests who managed to successfully lobby the U.S. legislature to grant them autonomy over the money supply by way of the Federal Reserve Act . Authors G Edward Griffin and Antony Sutton both exposed this fact many decades ago.
With Powell taking on more power at the BIS, his governorship of the Fed is assured for the time being.
Elsewhere, having departed as President of the European Central Bank, Mario Draghi has also stepped down as a member of the BIS Board of Governors. New ECB President Christine Lagarde has replaced him. Lagarde’s role at the ECB now affords her the right to attend BIS meetings. As I have written about extensively, Lagarde was a leading proponent of fintech and digital currencies whilst managing director at the IMF. She finds her way into the BIS just as the organisation are actively developing and preparing to take a leading role in determining what constitutes money ‘in the digital age.’
As for Innovation BIS 2025, the BIS have announced that Benoit Coeure, a current member of the ECB’s Executive Board and chair of the Committee on Payments and Market Infrastructures at the BIS, has been selected as the head of the bank’s Innovation Hub.
To gain an insight into Coeure’s thinking on digital currencies and the future of money, I would recommend a speech he have in September in Luxembourg – ‘Digital challenges to the international monetary and financial system‘. Here he picks up on what Mark Carney spoke about at Jackson Hole in August regarding a ‘synthetic hegemonic currency‘ to replace the dollar as world reserve:
Cooperation is precisely what Governor Carney is calling for: closer central bank coordination to reap the benefits of recent technological advances more quickly and more efficiently. Much in this spirit, the ECB and the Bank of Japan have already joined forces to examine the possible use of distributed ledger technology in financial market infrastructures.
The next natural step would be for global central banks to join forces and jointly investigate the feasibility of CBDCs based on common technical standards.
In Coeure’s view, provided that ‘Stablecoins‘ offer price stability i.e. they are linked through a basket of fiat currencies under the auspices of global financial bodies, then they would be the ‘natural next step in the evolution of digital assets.’
Coeure’s appointment came as the BIS launched an Innovation Hub in Singapore, in what they described as the ‘first expansion of its global footprint in 17 years.’ Gradually the BIS have been extending their influence beyond the West and into the East, a process that is now clearly evident through their Hub in Singapore and another in Hong Kong.
The Singapore Hub will have two objectives. The first is to ‘establish a framework for public digital infrastructures on identity, consent and data sharing‘, with the second being to ‘create a digital platform connecting regulators and supervisors with digital and technology solution providers.’ The latter project will directly involve the input of fintech innovators, but what it will also do, as managing director of the Monetary Authority of Singapore Ravi Menon explained, is ‘connect the global central banking community with the vibrant fintech ecosystem in Singapore and the region.’
It is of no surprise, therefore, that the launch of this Hub coincided with the 2019 Singapore Fintech Festival, the world’s biggest Fintech event featuring tens of thousands of participants. And as BIS General Manager commented on the inception of the Singapore Hub, the BIS is ‘taking a leading role in coordinating central banks’ innovation efforts.’
In an op-ed for The Business Times Singapore titled, ‘The changing colour of money – new directions for payment systems, currencies,’ Carstens described the ‘process of evolution through innovation‘ as growing at an exponential rate. The whole subject of digital money is framed around the belief that it is a product of natural evolution. Something that is unplanned and simply in response to the advancement of technology. But you only have to study the communications of global planners (which includes the BIS and the IMF) to understand that the growth of digital currencies is not random. A concerted effort has been taking place over the last decade in particular to ostracise what globalists call ‘tangible assets‘ in favour of the intangible – that which exists in the ether and not in physical form.
This is why the BIS have introduced the Innovation Hubs, as the next step in their progression towards the global adoption of digital currencies. They perfectly embody the globalist strategy of using gradualism as a means of achieving change – in this case, reformatting the concept of what money is and how it is used. Distributed ledger technology is a big part of how any future digital currency system would operate, a reason why the Hong Kong Hub has been assigned to work specifically in this area.
The introduction of central bank digital currencies are a clear objective, but according to Carstens, whilst they represent a ‘technological leap forward‘, they are ‘not a reinvention of money‘:
A key question informing the BIS Innovation Hub’s work is whether money itself needs to be re-invented for a changing environment, or whether the emphasis should be on improving the way it is provided and used.
What does Carstens mean by reinventing money for a ‘changing environment? I would speculate that he is alluding not so much to what money in the future will look like, but more about who will have jurisdiction over it. This brings into focus the current crop of fiat currencies. The dollar is regarded as the world reserve currency, but this is a status that is coming under heavy scrutiny at the top of central banking. There is increasing dialogue to suggest that the hegemonic role of money through a single fiat currency will over the next decade be sacrificed in favour of an all digital system that embodies a basket of currencies (modelled on the IMF’s Special Drawing Rights) that are utilised through the use of ‘Stablecoins‘. Private firms are pioneering stablecoin technology, but in parallel central banks are in the process of reforming their payment systems to ensure that they are compatible with blockchain and distributed ledger.
Right now the system is such that cash is made available by central banks and digital money through commercial banks. But the abolition of cash, and with it any semblance of anonymity, is not going to impair central banks. Their extensive research programmes into CBDC’s tells us that they are actively preparing for a future without physical capital. Of note as well is how the traditional role of commercial banks being the sole provider of digital funds is being brought into question by central bankers.
It is the hope of the BIS that consumers will demand that the future of money, whatever digitised form it takes, is backstopped by the central banking fraternity. Much of that will depend on the geopolitical climate, and whether individuals perceive events stemming from the likes of Brexit and Donald Trump’s presidency as the cause for economic instability.
2025 is the next staging post in the globalist quest to completely digitise money. Whilst I doubt they will have succeeded by then, the danger is that in five years time the world will have irreversibly moved in that direction.