With China acting as the guinea pig for the world regarding a Central Bank Digital Currency (CBDC) and a social credit score system – the public is getting a sneak peek into how a country would look once their financial system goes fully digital.  When looking at how countries are operating using a CBDC version of their national currency, China led the way announcing on April 7^th of 2022 that their digital Yuan would be released and available to be used for payments.  Around this same time, three major banking institutions in China, Yu Zhou Xin Min Sheng Village Bank, Shangcai Huimin County Bank and Zhecheng Huanghuai Community Bank — froze a total of 10 billion Yuan ($1.49 billion USD) in deposits; effectively eliminating the ability for that currency to be drawn out in physical cash.  Protests quickly erupted after the People’s Bank of China announced it would cover only up to $7,400 USD (50,000 Yuan) per person affected, but anyone with more funds lost, would be out of luck.  In order for the government to halt these protests, social credit passes were turned red and protestors were subject to isolation until their pass was turned back green.  Imagine in a flash your life savings shrunk to under $10,000 and when you tried to get it back, you were locked down against your will?  Without physical wealth, there would be no way to recoup your losses and move on.

It should come as no surprise that as China ushers their population into using strictly the digital Yuan for payments, the People’s Bank of China along with many other major central banks have been LOADING up on physical gold and silver.  It appears they are looking to store wealth in physical form, while encouraging the public to store wealth in a form 100% controlled by the issuing government/central bank.

What may surprise many Canadians though, is the fact that Canada outranked China, and every other country in the world, as the most cashless country and the most likely country to be the first to go fully cashless.

It should be noted that this transition for Canadians started during the onset of the global pandemic as cash was deemed a virus spreader and unsafe for mass usage.  The public was encouraged to deposit their cash in the banks and to begin using their debit or their credit cards.  This would allow for 100% of all transactions and currency to be tracked, controlled, or subject to surprise losses when the system falters… * cough * Rogers outage * cough *.  Once a large percentage of Canadians had gone cashless, we began seeing signs like this:

Without getting too deep into the Roger’s outage, as we previously have written extensively about it in past newsletters, Canadians quickly learned the importance of holding wealth outside the system whether in cash or in precious metals.  Precious metals, of course, being the asset used to store wealth over a long period of time, where as cash is for spending, as Gresham’s Law states, good money drives out bad money, and so cash will be spent until it is gone while sounds money (precious metals) are hoarded for a rainy day.

All that said, the Bank of Canada is in no way turned off by the Roger’s outage and what it would mean for the stability of our financial system if we were to go fully digital as governments are planning.  It was announced that in late November, early December of 2022, the Bank of Canada would be moving from the research phase of their CBDC program, to the development phase; bringing CBDCs closer to a reality in the Great White North.  The reason this transition was made was highlighted by the Bank of Canada’s Governor, Tiff Macklem, when he stated “We could lose control over our own monetary sovereignty if they start to use other digital currencies,” likely referring to foreign CBDCs.  It is clear there is a race by governments and central banks to keep control over the spending and savings of the population by moving into purely digital currencies.  At the same time there appears to be a race by central banks, governments, and select portions of each countries’ public that are in turn, rushing to keep control over their own spending and savings by securing precious metals like silver and gold prior to any major digital transition.

Below you can see just how far CBDC popularity has grown.  In 2021, there were only 35 CBDC pilot programs launched whereas today, we sit at over 115…

Even if a transition to a fully digital system does not raise any warning flags for you, what is more easily understood is the ole’ “don’t keep all your eggs in one basket” saying.  While you may be okay with having a portion of your wealth in CBDC form, ask yourself, given all the chaos with bank accounts being frozen, financial systems going down, CBDCs being fully programmable by their issuer leading to negative interest rates on savings to encourage constant consumerism, or simply carbon taxes that limit how much of one product you can purchase each week – it is clear having wealth in physical gold and silver give you another option if the digital system turns nefarious.

If you are looking to secure physical wealth, while getting the best ‘bang for your buck!’ look no further than our 10oz Royal Canadian Mint Silver Bar.  It comes out of one of the most reputable mints, in combination with having one of the lower premiums attached for this size bar.

10oz RCM Silver Bar