After Ditching the Dollar - Saudi Arabia Joins mBridge (Central Bank Digital Currency)
Published: 2024-06-17
Status:
Available
|
Analyzed
Published: 2024-06-17
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Saudi Arabia has joined Project mBridge, a cross-border digital currency trial led by China.
"Saudi Arabia has joined a China dominated Central Bank digital currency crossborder trial and it's called project embridge."
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Saudi Arabia has become a full participant in Project mBridge.
"Saudi Arabia is now officially a full participant in Project embridge."
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Project mBridge, initiated in 2021 and involving China, Hong Kong, Thailand, and the UAE, has reached its Minimum Viable Product (MVP) stage, indicating its transition from a concept to a functional trial for cross-border CBDC trade.
"this project which started in 2021 is a collaboration between the central banks of China Hong Kong Thailand and the United Arab Emirates to test cbdcs for crossborder trade and payments and they just reached What's called the MVP or the minimum viable product stage which means this project is not just some conceptual idea or a prototype it's happen for real this time"
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Project mBridge is presented as a new central bank digital currency (CBDC) challenging the existing financial system.
"there's a new player that's challenging the old system with a new one called embridge which is a central bank digital currency"
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A CBDC is defined as a fully digital representation of a nation's fiat currency.
"a cbdc is a true digital version of a country's fiat currency"
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CBDCs could facilitate direct and immediate stimulus relief to citizens during crises, bypassing traditional mail delays.
"imagine there's an earthquake somewhere or a natural disaster we can have direct stimulus relief to people during a crisis without any sort of a delay and that means no lost checks in the mail"
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CBDCs have the potential to challenge the US dollar's dominance in international trade.
"these cbdcs could potentially challenge the dominance of the US dollar in International Trade"
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Project mBridge is a CBDC designed for instantaneous and low-cost international value transfers.
"this is where project embridge comes in what it is is a central bank digital currency that allows the transfer of value across the world instantaneously very very cheaply"
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Project mBridge utilizes Distributed Ledger Technology (DLT), the same technology that underpins Bitcoin.
"how it does this is it uses something called DT or distributed Ledger technology which is the same technology that powers Bitcoin"
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Project mBridge prioritizes security and scalability over decentralization.
"embridge they chose to master security and sc avability but they left out decentralization"
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The sandbox version of Project mBridge has been made accessible to 27 additional entities, including the IMF, World Bank, central banks of Norway, South Korea, and Turkey, and major financial institutions like HSBC and Goldman Sachs, as well as the New York Fed.
"27 other official entities including the international monetary fund the World Bank and the central banks of countries like Norway South Korea turkey along with Banking and development from HSBC Goldman Sachs and the New York branch of the Federal Reserve"
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Currently, 134 countries and currency unions, collectively representing 98% of global GDP, are actively exploring CBDCs.
"134 countries and currency unions representing 98% of the global GDP who are exploring these right now"
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Out of the countries exploring CBDCs, 44 are in research, 30 are in development, 36 are in pilot testing, and 3 have already launched their CBDCs.
"44 of them for example are in the research phase 30 countries are already in development 36 of them are in the pilot testing phase and three have already been launched"
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The Project mBridge platform utilizes Ethereum's Solidity smart contract language and the Ethereum Virtual Machine.
"the embridge platform uses ethereum solidity smart contract language and the ethereum virtual machine"
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CBDCs have the potential to provide access to digital money for the 1.4 billion unbanked individuals globally who currently lack bank accounts and access to payment systems.
"there are 1.4 billion people that are unbanked they have no bank accounts and no way to get a hold of these Payment Systems when they need the most cbdcs could give access to digital money to people without bank account accounts"
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CBDCs are predicted to significantly reduce international transaction costs, which are currently averaging around 6.5% for a $200 transfer.
"it could also lower transaction costs which right now are super expensive the average cost of sending $200 internationally right now is about 65% and cbdcs can significantly lower these costs"
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The development of CBDCs could lead to a fragmentation of the global economy and pose a threat to the US dollar.
"it could fragment the global economy and threaten the US dollar"
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The introduction of CBDCs competing with the Petro dollar system could shrink the US dollar's ability to deflate inflation, leading to prolonged periods of higher inflation.
"a central bank digital currency that competes with this Petro dollar system has the effect of shrinking this balloon's exit valve potentially to a subatomic level to a tiny level which means if this balloon represents inflation it will take this balloon a lot longer to deflate back down to original size that just means inflation will stay around a lot longer than we want it to"
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CBDCs grant the controlling country or bank the power to implement expiration dates on money.
"it empowers the country or the bank that controls it with the ability to set an expiration date on money"
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The digital Yuan in China has been observed to have an expiration date, requiring users to spend it by a certain time to avoid losing its value.
"the digital Yuan has an expiration date use it by a certain date or you will lose it"
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Expiration dates on CBDCs are proposed as a mechanism to artificially encourage consumption and spending during recessions or depressions, counteracting people's tendency to save due to economic uncertainty.
"the way to get us out of one is to encourage people to go out borrow money and spend that money but whenever there's a recession people are not spending money they're saving money they're scared of losing jobs they are not spending money and so how do you get people to grow the economy if no one wants to spend you put an expiration date on it because that's what will artificially encourage people to go out consume and spend their money or else they'll lose their savings"
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The US Federal Reserve has stated that it would not support a CBDC system where the government could monitor all user transactions, as this would be unacceptable in the United States.
"the government would see all your transactions and that's just something we would not we would not stand for or do or propose here in the United States"
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The US Federal Reserve is not close to recommending or adopting any form of central bank digital currency.
"we're nowhere near recommending or let alone uh adopting a central bank digital currency in any form"
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If the US were to consider a digital currency, it would be implemented through the banking system, and the Federal Reserve would not hold individual accounts for citizens; only banks would have accounts at the Fed.
"we would do this through the banking system the last thing we would want we the Federal Reserve would want would be to have individual accounts for all Americans or any Americans for that matter only banks have Accounts at the fed that's the way we're going to keep it"
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CBDCs grant countries the power to monitor and control every transaction, including the contents of users' bank accounts.
"it also gives them a superpower that comes with its own set of risks like the ability for them to Monitor and control every single transaction including controlling what's inside of your bank accounts"
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The US Federal Reserve launched the FedNow instant payment system in July 2023, enabling immediate money transfers for households and businesses, eliminating traditional hold times.
"the Federal Reserve Bank of the US launched something called the FED now system in your bank account The Federal Reserve announcing it has gone live with its new fed now instant payment system A system that should allow households and businesses to send payments and receive money immediately without those troubling three-day holds on checks and waiting for payments to clear in the senders account and waiting for the bank to open on Monday or after a holiday"
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While the Petro dollar system is facing challenges from a new, albeit imperfect, system, the latter is gaining acceptance and testing among countries worldwide.
"the Petro dollar system is being challenged by another system that is not perfect it's also flawed but it's good enough that countries around the world are accepting it and they're testing it right now"
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