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Is bitcoin the future of money, privacy and payments, the end of greedy banks and the fall of government fiat currencies; or is it an elaborate scam, the currency of cyber villains, and a threat to sovereign states?  

Drew of BitNational, a CCEC Member, says: “We all cherish money deeply, but most don’t truly understand what it is or from where its value is derived. Researching bitcoin and cryptocurrencies enables you to understand a lot more about how fractional reserve banking and quantitative easing only benefit the extremely wealthy, while constantly devaluing every dollar you earn. Bitcoin is honest and transparent at the lowest level.”   

Could bitcoin prevent a future global currency crisis like the ongoing Greek example? Earlier this year, there was a freeze imposed on fund transfers out of Greece and a daily limit placed on how many Euros that Greeks could withdraw from their own bank accounts. If all Greeks used bitcoin, their funds could not be frozen or rationed. We know that Fort Knox doesn’t have enough gold to support the paper currency in circulation, and lots of people are unaware that gold has not been tied to fiat currency since 1971. Is bitcoin, a currency created by the people for the people, the answer?

Bitcoin is not an easy concept to grasp, but at the moment, it’s the only currency without borders. There are many people who are now buying bitcoin in an attempt to learn more about digital currencies that are, for the most part, completely misunderstood.  According to Drew, of the DDP & BitNational, “People are infatuated with saving money, but they don’t really know what it is. The ‘money’ in bitcoin is stored fully in your control, on your cellular phone, in paper (cold storage) wallets, and now many hardware wallets are also coming into the market. There are however still risks in this fledgling industry, if you don’t know what you are doing. For example, the ‘address’ you use to transfer bitcoin must be correct or your funds could be sent to a different person and not returned. Bitcoin is a push system, rather than a pull system like credit cards and traditional banking. You are in full control of your money, if you want to be.” 

So, how are businesses using bitcoins? CCEC Member, the Decentralized Dance Party (link to blog) is selling “Peace Bonds”, exclusively using decentralized currencies, such as bitcoin, to complete The Global Party Pandemic AKA The Grand Unification Tour. The DDP’s recent European Tour was 100% financed by crowdfunding (see blog article on CrowdGIFT) using bitcoin.

So, how does it work? It is said that the blockchain technology behind Bitcoin could be a game-changer in the world of finance. It is virtually unhackable. The blockchain is the systematic ledger that keeps track of all bitcoin transactions. It can never be erased and is constantly growing as more transactions are added in chronological order. Because blockchain technology appears to remove the need for the middlemen of finance — banks, governments, notaries and even paper currency — it is thought that its system of decentralized consensus could be applied elsewhere. "Think about digital signatures, digital contracts, digital keys [to physical locks, or to online lockers], digital ownership of physical assets such as cars and houses, digital stocks and bonds and digital money," noted venture capitalist and bitcoin booster Marc Andreessen in a 2014 op-ed for The New York Times. He continues, "All these are exchanged through a distributed network of trust that does not require or rely upon a central intermediary, like a bank or broker."

Drew wants CCEC Members and their peers to be open to change. He says, “We all know that something is wrong with the current system and that we need to do something. Bitcoin is honest money… We all need to take more control of our finances and put in the effort to understand money. People don’t realize the power that they hold, and they need to understand that they can truly vote with their money.”

BitNational currently has 13 Bitcoin ATMs in Canada, 6 in Waves Coffee Houses in Vancouver and due to consistent transaction growth, will be expanding aggressively in the coming months.

For more information visit bitnational.com, bitcoin.org OR coinmarketcap.org

CCEC will be featuring more articles on decentralized currencies and bitcoin. Be sure to leave your comments on our Blog.

Contact Drew: drew@bitnational.com

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The Ministry of Finance is now reviewing credit union legislation, a process that will proceed over the next year.  Every ten years there is a review and consequently an opportunity to think critically about how financial services are regulated.  In BC, the two principal statutes are the Financial Institutions Act and the Credit Union Incorporation Act.

The last decade has seen some big changes in technology and also in the way international banks are regulated. Technology has changed the way credit unions do business (new service channels online, and mobile), process transactions (paperless payments), and communicate generally.  In addition, technology has introduced a host of new non-traditional service providers; virtual banks, online lenders, private payment services, digital currencies, and more. The failure of some large banks has prompted scrutiny of large scale financial engineering arrangements and of the role of regulators.

CCEC has made a submission to the Ministry in September that attempts to ensure the potential for communities to continue to organize and provide themselves with financial services; using the co-operative model. CCEC is vocal in asserting that the credit union model, at the local level, is to be facilitated and not burdened with regulation. CCEC substantially endorses a consistent legal framework for all credit unions with transparency and accountability among the government authorities.    

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Distraction, apathy and disengagement are rotting the foundation of western democratic traditions.  While it is tempting to repeat well known aphorisms about what a great place Canada may be, there is an underside of inequality, poverty, plunder and amorality that is both present and ominous.  For many, the challenge of these political 'realities' provides purpose and for many others this emerging global corporate empire is overwhelming.  

But the temptation to watch sports and reality TV, to binge in online games or HBO offerings, and to turn hotel chefs into celebrities is actually part of a a larger social pattern,  The Four Horsemen is a feature length documentary film that lays out a cogent and constructive overview of just what is going on; how certain ideas have become mainstream and blinded us, and how democratic institutions have been subverted.  The film, from the Renegade Economist  (Ross Ashcroft), features several notable thinkers and writers, including Joseph Stiglitz, Herman Daly, Noam Chomsky, and John Perkins.  

Notably, it outlines the need for local institutions and projects to counter this global 'financialization' project. It also emphasizes the need to participate, apathy serves the interests of the rich and privileged.   

 

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The name CCEC comes from our early manifestation, the Community Congress for Economic Change, and the board has chosen to re-explore that 'economic change' dimension of who we are. Sometimes we can see ourselves as an innovator, an advocate, and a champion. Two terms that challenge us are economic democracy, and economic justice.  Over the coming few weeks we have a community organizer meeting with a number of community groups, members and non-members, to get a reading on how people see things in our contemporary world and where CCEC can take action.

Some members may receive invitations to meetings. The conversations are expected to generate good inputs into the Board planning work scheduled for later this year. At the same time, we invite input from all members. CCEC has the potential to seed change - by being vocal, by being innovative, and by being compassionate.  We'll provide updates!   

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Canada is seeing the middle class shrink. After tax, Canada ranks a poor 19th in a measurement of income equality according to a recent study by the Organization for Economic Cooperation and Development (OECD).  Even the TD Bank expresses concerns.  See the CBC news item, and the OECD report.

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The US Foreign Account Tax Compliance Act (FATCA) is being implemented in Canada under an Intergovernmental Agreement (IGA) between Canada and the US.  The particulars are in the Budget Implementation Act currently being debated in Parliament. The upshot is that Canadian financial institutions will be obligated to send personal information to the Canadian Revenue Agency that will be shared with the IRS in the USA. The government has released some basic information here

There are substantive arguments that the IGA violates Canadian constitutional and privacy laws, and American law. However, the US has been insistent in negotiations and the Canadian government has acquiesced.   

Those with American citizenship or residency may have their banking information relayed to the IRS.  Canadian Banks, with some exceptions, will begin collecting and reporting information as of July 1, 2014.  "US persons" affected should be assessing their positions. There is the prospect that US tax collectors will be harassing many people in Canada who have US links or citizenship.  Call if you would like more information. 

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July 31 the van with a fully operational ATM is scheduled to visit CCEC!

Beginning Monday, July 29 the ding free sea to sea road trip will kick off in Victoria, BC and make it's way across Canada throughout the month of August, wrapping up in Halifax in early September.

The road trip will follow two seasoned improv comedians on a quest to share surcharge-free ATM banking with the masses; revealing some of Canada’s strangest roadside attractions and a host of colourful characters along the way.  Spearheaded by an alliance of Canadian credit unions, the road trip is the latest stunt in our year-long campaign to raise awareness of the thousands of ding free ATMs available to credit union members across the country.  Our goal: to spare even more people from the millions of dollars lost to ATM surcharge fees each year.

Armed with their wits and a camera crew, our comedic duo will travel from Victoria to Halifax over the course of 32 days. They will be chronicling their exploits through a series of online videos and social media content. Canadians can follow the team at www.ding-free.ca, as well as via Facebook, Twitter, Youtube, Instagram and at various locations along the way.

 

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Recent European research confirms an implicit strength of the credit union, or co-op, ownership model for a financial services intermediary.  In essence, the basic saving and loan paradigm of a credit union insulates credit unions from many of the larger risks that have gripped large banks. Credit unions do not speculate in aggregated 'financial' risks.    Consumer ownership, as opposed to investor ownership, has proven to be less fickle, and committed to local needs.  For a good overview check out this article at thenews.coop, or you can read the paper, Resilience in a downturn, The power of financial cooperatives.

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Euro's

As a credit union trying to serve our community and membership, we are beset with increasing regulatory pressures and expectations; all because some investment bankers in New York misbehaved (and some deranged fundamentalists made use of commercial banking services, another story altogether).  But are these 'regulatory' and monetary policy tactics having the desired impact? In short, no. 

In the minds of politicians, stimulus is the answer, but a large proportion of the resources being pushed out into the economy are not making any difference, the so called recovery is stalled.  The principle reason for this is that the key 'intermediaries' are stuck - large banks and public companies.  A culture of risk aversion is now present, rooted, first, in weak indicators and, second, a fear of another banking calamity.  

For a great overview check out this post at Pieria.  The upshot for credit unions is paradoxical; the new regulatory practices (largely fashioned for international banks) insist on 'reducing' lending risks at a time when local businesses and social entrepreneurs are eager to create jobs and resuscitate local economic activity.  In the end, the financial system is not working.    

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Credit unions in BC are, along with many other financial institutions, subject to added scrutiny as a result of the 2008 banking crisis. Good "Governance" is a subject of particular interest.  The BC regulator, FICOM, has proposed a new guideline for credit union governance in the recent past and invited comment from credit unions. 

CCEC's submission champions open democratic practices. One key issue is whether Boards should include 'professionals' who may better understand the risks in financial institutions. The regulator proposes that credit unions have more professionals sitting as directors. This is distinctly at odds with open democratic elections and member control. The CCEC position disputes the proposals on principal, but also on conceptual grounds; indeed, boards made of lay people have not proven themselves to be less prudent.  On the other side, the Board's of the large US banks that failed in 2008/2009 were filled with 'professionals'.

CCEC does not believe that lay people are less able to provide direction to community organizations, and indeed they provide a comprehensive linkage to the community and knowledge of our membership that is invaluable. 

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