top of page
  • Writer's pictureJon Ungerland

Decades in Days - Bitcoin Banking and CBDCs Last Week

Guest Editorial by Jon Ungerland, CIO, DaLand CUSO


"There are decades when nothing happens, and there are weeks when decades happen."




You might be thinking, “Didn’t Lenin say that?” Perhaps; but it’s difficult to pin down the exact origin of this now obvious and timeless truth. These words are attributable to at least half a dozen significant sources across the last century, and that’s important because it illuminates a fact that innovators and disruptors of all sorts recognize as a timeless, obvious, and oftentimes inconvenient truth: Revolutions are unveiled suddenly, after unfolding slowly (usually for decades). 

Jon Ungerland

Last week proved that the local banking and credit union industries are currently drifting through such culminating and decade-defining moments of a “slow and then sudden” revolution. The fourth week of May, 2024, is likely to be remembered as a time when decades came into focus for local banking and community financial collaboratives.


Not one, not two, but three significant legislative initiatives moved forward on Capitol Hill, major presidential candidates weighed in on the future of money in our society and world (with Bitcoin and CBDCs [central bank digital currencies] becoming voting bloc issues for at least three political parties), and credit union industry leaders finally spoke out regarding what might be the most significant existential threat to an entire noble industry of local banking and non-profit financial services: those aforementioned CBDCs.


On May 22nd, Jim Nussle (president/CEO of America’s Credit Unions), issued the following public remarks regarding House Majority Whip Tom Emmer’s H.R. 5403: “While a Central Bank Digital Currency (CBDC) might sound like it would be of massive benefit to consumers, it brings with it privacy concerns and many of the design features necessary to achieve certain benefits come with serious tradeoffs that could negatively impact credit unions and pose broader financial stability risks.”


It’s refreshing to see credit union advocates speaking so plainly and directly, at last, regarding the inherent “deal with the devil” represented within any CBDC. As I’ve said and written many times before, a cursory review of Federal Reserve comments and public replies quickly reveals that neither credit union nor local banking leaders have any reason to assume they’ll be “dealt in” to the game of the digital dollar (if it takes the form of a CBDC).


The fact your credit union or local banking institution happens to deal in the decades-old data of the electronic dollar likely buys very little assurance as to whether your institution would be welcomed into the ledger and cartel of the digital dollar Thus, it’s a relief to hear Nussle explicitly state there would be potential risks to consumers should the dollar be reborn as a CBDC.


We needn’t look any further than the Federal Reserve’s own white papers and public disclosures to better understand the specifics of some of those potential risks:


  1. programmable currency with in-built restrictions or incentives to accelerate movement of stimulus and other deposits out of bank accounts and into the “real [consumption] economy” (based upon logic or dictates of bureaucratic agents and entities and coded in agreement with prevailing political party ideologies),

  2. negative interest rates (i.e., the end of savings and the final shift away from local wealth accrual and to perpetual consumer debt cycles via a new level of efficiency for programmatic poverty and electronic financial illiteracy),

  3. direct-to-Fed consumer relationships. The Fed’s own white papers on the topic of the CBDC make it clear that the current structure of thousands of retail banks would not only be unessential in a world with a CBDC, but probably an encumbrance to the planned “benefits” of said currency “upgrade,” and

  4. total and final collapse of privacy, autonomy, or sovereignty in financial transactions (removal of cash, elimination of banking data privacy, total consolidation and centralization of all transactions into a single, centralized, digital ledger at the Federal Reserve and its preferred commercial bank “issuer” partners).


For nearly a decade now, I’ve been outspoken about the privileged and fragile position credit unions and local banking institutions enjoy when it comes to serving as local storehouses for the fruits of community labor, begging credit union leaders to vigilantly contemplate and protect the pivotal place they occupy as catalysts of community economies. I continue to encourage board members and executive teams of local financial cooperatives to examine the unique diversity of American banking, most notably our thousands of local and regional private banking institutions.

To be sure, complacency, compliance, and other political and practical pressures have essentially eroded local financial services into an industry wherein logos and retail locations are mostly a facade (e.g., repeal of Glass-Steagall, bank bail-ins, advance of Basel III). Still, the United States is a unique market, insofar as there are tens of thousands of local board members, executives, and mutual/member owners who possess certain rights to govern their financial affairs and steer toward financial flourishing independent of strategies, mandates, and policies of big banks and central bankers.

I’ve long wondered if this is the sort of luxury which is impossible to understand or adequately appreciate until it is lost. I’m gathering Jim Nussle (and let’s hope a few others like him in Washington, D.C.) are starting to realize the ease with which our continent could drift into financial authoritarianism (or even to central currency planning communism) without the diversity and democracy still preserved in the shards and remnants of our local financial institutions. Our great grandparents knew the life-robbing reality of big bank usury. They experienced the multi-generational strategy of wealth erosion and property control which is always the agenda of those vampires of local economic output: big bankers and central banking “planners.”


Remembering we are benefactors of the efforts and victories of our predecessors, and we enjoy and inherit the fruits of their labor to promote local financial flourishing and economic autonomy, we should likewise celebrate other important advances of our time. Proponents of local preservation and governance of capital have reason to celebrate last week’s House overturn of SEC SAB-12, and probably ought to cautiously anticipate good things to come from the House passage of Financial Innovation and Technology for the 21st Century Act (FIT21).


Both of these happenings in the U.S. House should clearly suggest to local banking leaders that it’s well past time to prepare strategies for a world of financial services beyond the current era of the electronic dollar. Further, these legislative milestones make it clear that it’s becoming increasingly difficult to uphold one’s fiduciary duty to members and customers, let alone to the legacy and posterity of an institution, if one’s board and executive team are not earnestly and consistently investing in understanding the metamorphosis of money into new forms of data and new networks for financial services products and banking transactions.


During a recent visit to Capitol Hill (February, 2024), I was privileged to sit down with House Whip Emmer’s staff and converse beyond the obvious risks of a CBDC. We talked more broadly about Bitcoin, digital capital, community custody and direction of digital assets, and the evolution of storage and processing of economic value away from the legacy electronic dollar systems and networks. While I was comforted by Emmer’s office and their assurance that a CBDC was a “non-starter,” I wanted to encourage them to speak more clearly and directly to local and regional banks, and ensure leaders of such institutions understood the essential and urgent nature of investing into and interconnecting with networks like Bitcoin - which, at their roots, are modern tools for financial autonomy and economic collaboration independent of central and big banking institutions, resistant to the usurious and costly agendas of such institutions.


Thus I was delighted this past weekend to read and watch additional highlights of campaign trail speeches from President Trump as he apparently pivots toward digital asset holders and Bitcoiners, as did RFK Jr., speaking about Bitcoin, CBDCs, and their relationship to local/personal liberty and various economic risks and challenges confronting our nation. As I’m not particularly inclined to the “Team Red vs. Team Blue” variety of political discourse, rather than plucking excerpts from their speeches at the risk of appearing to prefer or endorse one or the other candidate, I’ll make a simpler and more universal point. The 2024 presidential election cycle has seen Bitcoin mature into far more than a currency for criminals and tax evaders (a straw man portrayal if ever there was one); digital assets and Bitcoin in particular have become a voting bloc, a campaign defining topic, a regular theme in speeches of past presidents and presidential candidates.


Considering the way decades of financial services “suddenly” came into focus this past week, a crucial question to ask in the interest of the thriving of your local financial institution is: “How long can digital assets, Bitcoin, CBDCs and related topics remain outside the strategic plan and leadership vocabulary of my financial institution if they’ve become part of the mainline vocab of politics?” If past presidents and presidential hopefuls intentionally address “the nation’s 50 million crypto users,” in pursuit of relevance for their campaigns, it’s safe to assume there’s little risk and it’s well overdue for your local financial cooperative to embrace education, awareness, and promote financial literacy around these recent legislative events and other important technological, economic, political, and social realities represented in these current moments of monetary revolution and innovation.


P.S. This article focused a great deal on recent relevant events at the federal legislation and representative level in D.C., but we mustn’t overlook arguably more important events in our Republic of States, such as Oklahoma’s recent passage of Bitcoin right’s legislation, protecting the sovereign rights of local individuals and communities to self-custody digital wealth. In many ways, this is clearer writing on the wall for local institutions than any of the above analysis or reporting.


On Deadline: Late in the evening on Friday, May 31, President Joseph R. Biden vetoed Congress’ repeal of SAB-121. The action taken by Congress would have allowed regulated financial institutions to own Bitcoin, carry it on their balance sheets, and custody such digital assets for members/customers. Thus, it seems the current administration sees no need for local FIs in a financial world beyond the electronic dollar. Imagine a world where President Clinton had tried to turn off the Internet or ban business use of it. Some emperors know better than others whether they are clothed, and understand how to avoid making embarrassing naked decrees. Anyhow, bureaucrats are going to need more prodding and/or less heeding, if local financial institutions want to remain plugged into the future of money.


bottom of page