This Rapsody is about my fictious strategy for rolling out a fictious Central Bank Digital Currency (CBDC) scenario. It’s not a prediction, just a plan for how I would implement this OPERATING MODEL.
The power of forgiveness is immense, especially when we can “start again”. The common expressions “I’ll do it tomorrow”, “I’ll start on Monday”, and “I’ll never do it again” reflect our natural tendency to reset and begin anew, a concept referred to as “A Big Reset” by the World Economic Forum.
Debt relief takes many forms, including debt restructuring, debt forgiveness, and sovereign debt restructuring. As we approach 2023, conflicting narratives surround the state of the economy, with some predicting a mild recession and others a major financial crisis. I personally see a total upheaval of the old monetary system, leading to the creation of a new foundation for managing money. I call this THE RECESSIONDEMIC .
The subject of CBDCs is vast, and I could write a script as long as the Godfather Trilogy, but I’ll assume a basic understanding. I would like to outline some steps I would take to achieve CBDC utopia in a hypothetical world and government .
THE INCENTIVE
Separating individuals from cash and transitioning them to a digital version requires motivation. It’s important to recognize that while I believe digital will eventually replace cash, it will be a gradual process in which both will coexist for a period of time.
So what can be done to encourage people to use newly issued CBDCs over cash?
- Tax incentives: Governments could offer a lower tax rate for selected benefits linked to pensions. The more individuals transfer to CBDCs, the more they can benefit their pensions.
- Pension schemes: CBDCs could be linked to pensions and offer savers favorable tax-free or discounted rates for holding CBDCs instead of cash.
- Wallet kickstart: Banks could offer a one-time free deposit to encourage spending using CBDCs, similar to a “starter account” for students. ·
- Debt exchange: Moving fiat debt, such as credit cards and mortgages, to CBDCs could offer more favorable repayment rates.
With the right operating model and team, some governments could recover faster during this transition.
