The Denmark Central Bank, National Banken, will be discontinuing the printing of new fiat in 2016. They will be outsourcing the printing of money to a private business or businesses, this part remains unclear.
Their reasoning for this is because more and more people are using digital payment systems. Such as cards, online payments, third party platforms, and to a minor extent (yes, we are still relatively very small), cryptocurrency. Shop owners can even refuse to accept notes and coins from 2016.
The definition of a virtual currency by the UK and Europe is one that can be inflated at command by the issuer of the currency which is also the central controller. A centralised currency. Exactly along the lines of World of Warcraft gold, or Diablo III gold.
I am not complaining, but I will feel sorry for those that suffer from a pure virtual currency. And this is not to say that there are mistakes and loss in the bitcoin sector, there has unfortunately been plenty of that to go around.
And let us not forget negative interest rates. For those forced into a pure virtual economy that suffers from inflation and your money would be drained through negative interest rates. You would be taking it from the front and the back.
It is clever, particularly evil, but clever
And do not even think about quantitative easing and where all those hundreds of billions are going. The trickle-down theory has apparently been serving the population so well. Meanwhile, the rich get richer, and the poor get poorer.
When both inflation and negative interest rates are eating away at people’s life savings in a pure virtual world that is subject to absolute capital controls, then we will see mass exodus towards a digital answer.
The wealthiest will not notice at first as their savings will be offset by the various tax cuts and profit they make from their various ventures. The not so wealthy will notice the ever increasing monetary supply inflation from global quantitative easy, combined with negative interest rates.
But hey, don’t worry, it will be alright because trickle down.
Let us not overreact though. Fiat is not completely disappearing. They are outsourcing printing of money; nothing can go wrong with that, right?
And some of the main reasons cited for this move to a pure virtual economy is the ability for banks to track your funds. For the purposes of tracing transactions that will be used to combat terrorism financing, money laundering and tax evasion. Let us not think about HSBC (2012, 2015) at this moment, bless their little cotton socks.
More Benefits For the Denmark Central Bank
As most of you are probably aware of, the banks do not have the physical cash that should represent what they have on their systems. If people make a bank run they would all be up the creek without a paddle.
So why not get rid of physical cash? It removes the possibility of bank runs from ever happening. With the benefit of having even more funds available in case a bailout is needed again and with the coincidental bonus of negative interest rates, because banks are not making enough money, and higher bonuses are needed.