Most people are unaware that the major international banks cannot operate without unrestricted access to the U.S. banking system. This is because the dollar is the world’s major reserve currency.
In order for the multinational banks to perform transactions internationally, they must have the ability to settle these transactions in dollars. Otherwise, they are out of business.
The U.S. banking system functions as the gatekeeper for the U.S. dollar in this way. Yet thanks to actions of the Obama administration, this system is under assault today. In 2014, the U.S. administration fined the French banking giant BNP Paribas a hefty $9 billion because it was working with nations the U.S. was against like Iran and Cuba.
The French bank had not broken any of France’s laws. Yet still, they had to pay this punishing fine because they had transgressed against U.S. laws. BNP Paribas attempted to resist the fine but was warned by the American government that they would be rejected from the U.S. banking system if they did not comply.
Needless to say, they paid because they could not afford to be cut off from the U.S. dollar as a settlement currency. The $9 billion was a stiff penalty. Losing access to U.S. dollar settlement would have ruined them though.
Under the Obama administration, other banks have suffered similar fates. British banking giants HSBC, Standard Chartered, and Barclays have also been fined billions as well. Swiss banks Credit Suisse and UBS paid billions in fines for helping U.S. taxpayers evade taxes. This was also not a crime in Switzerland, but it did not matter.
The end result of this aggressive persecution of foreign banks is that the banks quietly began looking for a way to get around U.S. bank and dollar settlement. They found blockchain technology as the answer to their problems. It offers banks a simple and effective means for sending payments to each other directly.
This idea saves them the costs of moving money inefficiently around the U.S. correspondent accounts. More than that, it frees them from having to keep trillions of dollars of funds in U.S. accounts. Soon it will end their dependence on the U.S. banking system and U.S. dollar settlement entirely.
How serious a threat is this? Four of the biggest banks on the planet have just revealed a brand new combined effort to develop a means for settling transactions based on this blockchain technology. Swiss UBS, Spanish Santander Bank, German Deutsche Bank, and American Bank of New York Mellon call this Utility Settlement Coin.
And these major players are not the only ones committed to this type of project. Another group of 15 different Japanese banks has signed on to implement rival technology Ripple backed by Google Ventures. It will similarly allow them to settle their financial transactions directly.
This is not something that will only shake up the U.S. banking system and dollar reserve currency status years from now. The Ripple system is already up and running. Dozens of more banks will be participating within 6 months. As for the new Utility Settlement Coin technology, the goal is for it to launch commercially in only 18 months.
International banks will finally achieve their independence from the U.S. regulators who abused their power. Wall Street banks will lose their lucrative foreign correspondent accounts and financial tolls. Foreign banks will no longer need to keep trillions of dollars in the U.S. and purchase American government debt with it.
The Federal Reserve is aware of the threat and has issued a warning that this type of financial technology could create instability in the American financial system.
Protect your portfolio
You can protect yourself from attacks on the U.S. banking system and the dollar. By using a part of your assets to purchase gold, you gain the protection of the greatest financial and currency hedge of all time. Consider acquiring some now before the Utility Settlement Coin and competing technologies reduce dependence on and the value of the U.S. dollar.
I hope you found this short post to be helpful, as always if you got any questions I will be more than happy to answer them below!
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I wish you success!
Investor, Student, and team member on Gold Retired