Carney’s “Values”: A new investigative series by True North that takes the Liberal leadership hopeful’s own words as a launch pad to uncover his beliefs, background and vision for the world. Read the first part on carbon taxes here.
There are those who merely advocate for sweeping financial transformation, and then there are those who take steps to radically alter the way money works.
Mark Carney, former Bank of Canada and Bank of England governor – now Liberal party leadership hopeful – falls into the latter category.
If the vision Carney elucidated in his 2021 book Value(s) holds true, the future of money will be an inescapable digital version of cash issued as central bank digital currencies, or CBDCs.
Carney has been unambiguous in his stance.
“The most likely future of money is a central bank stablecoin, known as a central bank digital currency or CBDC,” he wrote. Carney elaborates that a proper CBDC could fulfil all the roles that private cryptocurrencies and stablecoins aspire to without the regulatory trouble that comes with total anonymity – a central feature of cryptocurrencies.
As for private cryptocurrencies? Carney believes that while they have some use, he is largely dismissive in his prescriptions. His skepticism towards them, particularly Bitcoin, is evident.
“It is simply untenable in democracies that the core of the monetary system could be based on forms of electronic private money whose creators control large blocks of the currency, like Bitcoin,” writes Carney.
Yet the issues Carney raises — concerns over money laundering, terrorism financing, and tax evasion — are conveniently absent when discussing the countless financial crimes facilitated by traditional banking institutions.
For example, just last year one of Canada’s major banks, Toronto-Dominion Bank, was fined over $3 billion for violating the United States’ Bank Secrecy Act and allowing money laundering.
“Cryptocurrencies are not the future of money,” Carney declared with certainty.
That Bitcoin has been increasingly recognized as a digital form of gold, or that it provides financial sovereignty to millions facing devaluation and capital controls, is of no concern to him. The reality of its growth is simply a stepping stone towards a total monetary revolution in the form of centralized digital currencies: CBDCs.
“As we shall see, the electronic pretenders to the monetary crown currently fall short on most criteria, but the revolution they have launched will overthrow the old regime,” writes Carney.
Carney writes of cryptocurrencies as if they are a useful inconvenience that should bend to the will of central banking. If Bitcoin and decentralized finance are money for the people, then CBDCs are money for the bureaucrats.
“If properly designed, a CBDC could serve all the functions to which private cryptocurrencies and stablecoins aspire while addressing the fundamental legal and governance issues that will, in time, undermine those alternatives,” writes Carney.
Additionally, Carney’s antagonism toward Bitcoin is rooted, in part, in his relentless commitment to the climate agenda.
“Transactions are very slow and highly carbon intensive,” he complains.
Yet his proposed alternative, CBDCs, is a solution in search of a problem. “Ultimately, the scalability of cryptocurrencies will likely rely on the netting of transactions within digital wallets, a framework that is better suited to central bank digital currencies,” he argues
In other words: the freedom to transact must be reined in, your financial choices confined to state-sanctioned digital wallets where every purchase, every transfer, and every investment is monitored and, if necessary, controlled.
Perhaps the most chilling revelation of Carney’s worldview is his own comparison between the use of fear to instil pandemic lockdowns and the future of monetary policy.
“With fear on the march, people were willing to surrender to Hobbes’ ‘Leviathan’ such basic rights as the freedom to leave their homes. And so it is with money. People will support the delegation to independent central banks of the tough decisions that are necessary to maintain the value of money provided the authorities deliver monetary and financial stability,” writes Carney.
This is no theoretical concern. The Liberal government has already demonstrated a willingness to freeze the bank accounts of political dissidents, as seen during the 2022 trucker protests. Carney even spoke in support of such measures in an op-ed published by the Globe and Mail.
“Those who are still helping to extend this occupation must be identified and punished to the full force of the law,” wrote Carney.
“Drawing the line means choking off the money that financed this occupation.”
Carney’s ambition extends far beyond national borders. In 2019, he delivered a speech in his role as the governor of the Bank of England proposing that CBDCs could “displace the U.S. dollar” as the world’s reserve currency.
The dollar, long the backbone of international trade, is seen as problematic for its “spillover effects.” Carney’s proposed solution? A “Synthetic Hegemonic Currency”, a new global digital currency managed by a network of central banks.
But for all his talk of progress, Carney remains staunchly opposed to the gold standard. “Promoting solidarity means never going back to forms of money, like the gold standard, where the burden of adjustment falls most heavily on one class, labour.”
Carney has spent years manoeuvring in elite financial circles, from leading the Bank of Canada and the Bank of England to the United Nations to the upper echelons of the World Economic Forum. He co-chaired a working group on CBDCs with Christine Lagarde. He played a leading role in the Bank of England’s early steps toward digital currency. He helped launch a global central bank initiative with six major central banks on CBDCs in 2020.
Now that he’s running for the Liberal leadership, Carney has had little to say about monetary policies and his vision for a world financial system that runs on CBDCs.
