These past few days it seems like the entire blockchain industry has been tuned in eyes wide open to the hearings on Capitol Hill about bitcoin, cryptocurrencies, and whatever it is that we're gonna call Facebook's Libra.
Cuz it shore ain't no bitcoin or cryptocurrency!
I got to thinking, "Why is everybody so up in arms about this thing?" After all, China has had digital currency for going on 5 years now. Last year over $5 trillion worth of transactions were processed on Alipay and WeChat Pay platforms. Isn't this just Facebook trying to play catch up to its global rivals?
A lot of congresspeople are up in arms about a consortium of private interests determining the direction of the American monetary system. The lovely AOC summed it up best when she criticized the proposed coin as "a currency controlled by an undemocratically-selected coalition of largely massive corporations."
But that got me to thinkin', "Wait a minute, isn't that exactly what the Federal Reserve System is?"
Sure enough, according to the St. Louis Fed, "the Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends."
🤔🤔🤔
Here's another aspect of the Federal Reserve that's gonna blow your mind. The Fed actually calls itself a "decentralized system structure" ON ITS OWN WEBSITE:
And if that wasn't enough, here's the cherry on top. The Federal Reserve itself was formulated in the aftermath of yet another financial panic. (America is really really good at creating those, apparently). This one was in 1907 and was caused by a liquidity crunch supposedly created by the San Francisco earthquake of 1906. At the time, the country clearly blamed the banks for the panic as evidenced by their withdrawal of funds from investment trusts and New York banks. That's why the episode is sometimes referred to as the Knickerbocker Crisis.
So, after the banks caused the run up and following economic crash, who did politicians get to build a better financial system?
You guessed it. Of course, politicians chose the banks.
In 1910, Senate Republican leader Nelson Aldrich convened a secret meeting of all the financial magnates of the time to develop what would become the Federal Reserve Act of 1913. They met in a posh getaway residence on Jekyll Island, Georgia owned by... wait for it... the Rockefellers!
This little slice of heaven is what is known as Rockefeller Cottage on the island. Cottage.
All of the financial elite was there to decide the fate of the future economic monetary system, among whom was J.P. Morgan and J.D. Rockefeller Jr., who just by chance (of course!) happened to be Aldrich's son-in-law.
Sounds like a consortium of private entities working to issue a globally-used currency to me! Let's get 'em, AOC.
The Fed is Libra. Libra is The Fed.
Just a digital one for the 21st century.