"Control the world."

Rivulets of perspiration ran down the brow of the metallurgist as he worked the oppressive heat of the furnace. Occasionally, a sharp hissing sound could be heard as a sweat droplet found its way to the crucible below, exploding into steam as salty liquid met blazing golden metal.

Working at the behest of King Croesus, the metallurgist’s task was one of great significance. However, he would never know that by crafting the shining coins that were part of his king’s mandate, he was also involved in the very creation of history itself.

At the time in 550 BC, King Croesus’ kingdom of Lydia was a place blessed with fertile lands and an abundance of trade. Its prime location made it wealthy almost beyond measure, with easy access to ship goods throughout much of the known world surrounding the Mediterranean and in Asia.

Croesus’ predecessor King Alyattes was a visionary; the first monarch on the planet to issue coinage as currency. Made from electrum, Alyattes’ intention was to provide the populace with a homogenous way to trade with each other, which would further foster trade within the kingdom.

But there was one inherent problem with making coins from electrum: its inconsistency.

As a naturally occurring alloy of silver and gold, one that also often contained traces of copper, the amounts of each precious metal in a lump of electrum varied significantly. Because of this, some coins minted by Alyattes were paler white in colour denoting metal richer in silver, while other coins carried a more red or yellow tinge, indicating a higher concentration of gold and copper.

Inherently, this made using electrum as a means of trade difficult. Arguments—even those ending in bloodshed—frequently broke out in Lydia over the amount of gold contained in each piece of electrum, which was the prime factor that determined the value of a coin. This made its reliability as currency about as transient as the whims of the humans that used it.

For Croesus, this economic insecurity in his kingdom was unacceptable. Seeking to provide his people with coinage they could trust, he furnished his council with orders to conceive of a resolution.

The obvious answer was to simply make coins by first mining pure gold or silver. However, as the kingdom didn’t possess a wealth of these unalloyed deposits, it would have been near impossible to create the amount of currency required. Instead, a simple but brilliant solution was found by transmuting the electrum they already had in abundance.

The king’s alchemists first melted lumps of raw electrum in coal-fired furnaces, using lead to remove impurities. Then by introducing large quantities of common salt, the gold and silver would separate from one another, allowing the ancient metallurgists of Lydia to collect each precious metal individually.

Once separated, the gold and silver could be mixed again with a controlled amount of each, guaranteeing the purity of each coin. The metals were first mixed in volumes of approximately 54% gold, 44% silver, and 2% copper, before being stamped with the king’s recognisable lion and bull motif. Furthermore, the separated gold and silver were also used to make pure coins of each respective metal.

With that, the Kroiseioi stateres—or Croeseid—was born; the first homogenous coin of equal, controlled value to exist in human history. An act that would indelibly mark King Croesus’ name as the man who would first unite people under a common currency.

But one might also call him the first financial authoritarian.

Following its creation, the Croeseid became the only form of legal tender allowed in Lydia, with the king the only authority sanctioned to produce it. Before long, the ancient kingdom of Lydia transformed from a place where individuals had sovereignty to trade as they wished, to being forced to trade in the currency of Croesus.

Croesus had provided his people with consistent and safe money. But also, the world’s first form of monetary control.

I fear this history may be about to repeat itself.

For those of you who are unaware, Rishi Sunak was just named the new Prime Minister of the United Kingdom, mere days after Liz Truss's resignation. Sunak’s previous role was serving as the Chancellor of the Exchequer, otherwise known as the UK’s finance minister—in other words, working as deeply within a system for centralised financial control as is possible.

While serving in his role as finance minister, last year Sunak proposed a central bank digital currency (CBDC) for the UK, that has come to be colloquially known as “Britcoin”. According to Sunak, a type of money that could potentially be usable by Brits as early as 2025.

You’ve likely read my thoughts on a CBDC before. But as a quick recap, a CBDC would effectively work as a form of cryptocurrency—but one that’s totally centralised, completely under the control of your government, and that can be programmed with rules that limit people’s ability to use their money, or force people to buy only certain “approved” items or services.

In other words, a CBDC would be a financial authoritarian’s wet dream.

But despite these many concerns surrounding how a CBDC could be used by a government to stifle individual freedoms, what’s perplexing to me is how much support Sunak has received from within the crypto community so far.

Sunak has previously suggested he wants to make the UK a hub for crypto, and provide support for blockchain-based companies to set up shop in the United Kingdom. He’s also pushing to have crypto recognised as a regulated financial instrument, meaning it can be legally traded like any other asset on exchanges. These proposals have resulted in him being smothered in praise by some within the community, acting as if Sunak is some kind of crypto messiah who will push the industry forward in the UK.

But there’s a big piece of this puzzle I believe many of these supporters are missing.

Once a government has complete power over your money via a CBDC, do you think it will still allow decentralised versions of that money—like Bitcoin or Ethereum—to be used? Forms of money that grant people anonymity and the ability to exist outside its financial system?

No way in hell.

We only have to look to China as proof of this. In 2021, the same year the government’s e-Yuan first came online, the CCP completely outlawed all other forms of cryptocurrency except its own. This is a move I predict will be echoed basically everywhere on Earth, once other nations get their own CBDCs online.

Also out of China is Bo Li: the former deputy governor of the People’s Bank of China, but who now serves as the deputy managing governor of the International Monetary Fund (IMF). At a recent IMF event, Li spoke about how CBDCs could help foster a world of “inclusion” via their programmable nature. But amidst this glowing dialogue, he also uttered this ominous line:

“By programming CBDC …money can be precisely targeted for what kind of people can own, and what kind of use this money can be utilised.”

Despite Li’s slightly broken English, we can clearly understand the meaning straight from the horse’s mouth: that a CBDC will be able to control what you can own, and how your money can be used.

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Only two years ago, talk of CBDCs coming into play sounded like something out of an authoritarian fantasy. But our own impending financial dystopia seems to be moving forward at lightning speed, because at the time of this writing, 105 countries—representing over 95% of the world’s GDP—are at some stage of implementing one right now. Australia, the United States, Russia, Mexico, South Africa, Sweden, Iceland, India, and Argentina, just to name a few.

In short, a CBDC will be coming to your country soon. Very soon.

Those of us who are worried about a CBDC generally predict that it will almost inevitably be tied to some kind of social credit score. A system where citizens are ranked or punished based on their actions in society. And if one were to take too many so-called “wrong” actions, a government could penalise you by removing your access to your money, or limiting your ability to buy certain goods. Something that again, has already happened in China.

The most commonly predicted way this would happen would be via some kind of personal carbon credit limit. A system whereby if you used too much carbon—for example via your travel, food, or buying choices—your ability to purchase more of these items would be limited. An ability your government would possess, if they controlled your cash with a CBDC.

And wouldn’t you know it? Personal carbon allowances look to be on the horizon as well, with the World Economic Forum (WEF) recently writing about how its proposed ‘My Carbon’ initiative would help make our cities more sustainable, and inclusive.

Of all the frankly disturbing predictions of how technology might be used to limit our individual freedoms in the near future, it’s CBDCs that worry me the most. Simply because when those in power have the ability to coerce, manipulate, or force people’s actions by controlling their ability to use money—our basic means for survival in today’s world—they would gain the godlike ability to engineer the behaviour of an entire population.

Or as former US Secretary of State Henry Kissinger aptly put it:

“Who controls money can control the world.”

Unfortunately, a CBDC seems to be inevitable, just about everywhere. So is there anything we can do to stop this from coming to pass? I’m not sure… but refusing to use it at all will likely be a good place to start.

Leon Hill.
Co-founder, Abundantia.

P.S. – If there is ever a post of ours I would encourage you to share with others, it’s this one. As always, thank you for reading. And thank you for maintaining an open mind to ideas like the ones in this newsletter.