Are these proposed central bank “digital currencies” anything more than a centralised or federalised database of who-owns-how-many?<p>And if so, how does that differ from what we have now? That is, in a European country, I have an account with my bank, and my bank has an account with the central bank (or the two interact in some other way).<p>My understanding of the current system is limited, I merely know some large portion of the issued currency today is without physical representation.
Summary of the biggest problem with digital currency managed by central banks:<p>Central banks can use negative interests in order to force people to buy stuff. In the current system people would just withdraw cash in order to avoid negative interest rates if they are too high/low. In the future people will be forced to pay the interests or buy stuff. Governments want to use this mechanism in order to control the economy.<p>If digital currencies managed by central banks really do get approved, it is like being forced to use Facebook.
one frightening prediction I've heard is that we will have parallel economies. One for UBI consumer serfs who receive a monthly stipend that expires at the end of each month, another for people who work and receive payment perhaps in other independent currencies, and another, which already exists, for the very wealthy who hold wealth primarily in tangible assets like real estate and fine art. This will either fail spectacularly or it will be the beginning of an even more rigid caste system.<p>Very worrying for a system like this to be produced and executed by institutions who have proven time and again that things like human dignity, civil liberties and a chance at upward mobility are no longer relevent.
It may come across as snark, but I happen to believe this quote of Bill Hicks truly captures most of my thoughts on the subject.<p>“Rock stars against drugs – that's what we want, isn't it? Government-approved rock-n-roll? Woo! We're partying now!”<p>The entire reason for crypto is the already ridiculous level of control exerted over various gatekeepers. How do I know? I am part of the system.
European banks recently started toying with the idea of passing down negative interest rates to customer bank deposits, so that banks are less squeezed by reserves yielding negative returns (breaking the typical bank business model).<p>Just think, if CBDCs pass down the negative interest rates to everyone's cash, inside or outside of banks. That's not a currency I would be happy to hold.
What is the difference between a digital currency and the digital money I see in my bank account online? It feels to me like I already transfer money digitally when shopping with a credit card.<p>Later on that twitter thread he shares a poll by the IMF [0] where they ask you how will you be sending money to a family member in 5 years. The possible answers are cash in envelope, money transfer service, digital currency or other. Are venmo and similar services not already using a digital dollar?<p>[0]<a href="https://twitter.com/RaoulGMI/status/1317836130788757504/photo/1" rel="nofollow">https://twitter.com/RaoulGMI/status/1317836130788757504/phot...</a>
I make the bet that "traditional" banks will steer to go cashless in the near future and start charging all kind of fees for things you never had to pay for back when you could hold money in your hand. This is why the utopia of a decentralized currency would be so needed and will be fought all the way.<p>Side-note: I don't like the environmental impact of BTC, but I don't like being a victim of banks (who tend to have a terrible impact on the env in their own ways).
ICYMI, earlier this year, the cLabs team wrote this paper that outlines not just how CBDCs can increase the efficiency of the global financial system, but also how it creates a new transmission channel for monetary policy.<p><a href="https://celo.org/papers/cLabs_CBDC_Velocity_v3.pdf" rel="nofollow">https://celo.org/papers/cLabs_CBDC_Velocity_v3.pdf</a>
The Bank of England has been using a digital currency for years. When British banks settle up overnight, nothing physical is moving around. I'm pretty sure the same would be true of any developed country.
I loved the discussion with Professor Richard Werner on a podcast lately. He talked about what the European Central Bank is planning and what this means for us as consumers and explains why CBDCs really mean for us.<p>Here's the full interview<p><a href="https://youtu.be/OdYmdKUiQNw" rel="nofollow">https://youtu.be/OdYmdKUiQNw</a>
But all of these CB backed digital currencies aren’t like crypto. CBs will presumably be roots of trust and just maintain entries in a normal database.
Worth reviewing the Banking for All Act, which could introduce a digital dollar: <a href="https://www.congress.gov/bill/116th-congress/senate-bill/3571/text" rel="nofollow">https://www.congress.gov/bill/116th-congress/senate-bill/357...</a>
So.... I'm lost. What is a Central Bank Digital Currency?<p>The article he links is pretty corporate-speak. Can anyone translate? What's in the seeming boilerplate now that wasn't there before. Why are they excited about it and how does this mean they can do more stimulus?
They want to track everything you do in a totalitarian surveillance system which is already powered on. This was why I rejected bitcoin.... lack of anonymity.
Honestly long overdue in my opinion. I've always thought of access to payment systems the same way as I think of clean drinking water. it's basic infrastructure and it should be available to everyone at as little cost as possible, both literal cost and hassle.<p>When I moved to the UK and healthcare basically worked by registering with a GP and that was it and I didn't have to deal with insurance any more it was extremely pleasant. I just want the same thing for payments tbh, just give me digital Euros, accepted everywhere and transfer it instantly between people.
This is the best explanation I have seen :<p><a href="https://youtu.be/uX7VpTqXJhY" rel="nofollow">https://youtu.be/uX7VpTqXJhY</a>
This is going to end up as a giant hyperledger failure. Once the committee forms on how to do "this" it will be mired in indecision and eventually collapse on itself.
The Fed Digital Dollar will be a purchasing instrument that exists only in an app or website. They will be added and subtracted as the government sees fit. If, for example, the government should want to spike consumer spending, they need only tell you that your account will have a maximum value of $100 as of midnight. Either spend the rest or it will be deleted.<p>Show up at a political rally for a group that is currently out of favor, your balance is deleted. Break the speed limit and your balance is deleted. Be home by 10pm or your balance is deleted. Pledge 10% of your balance to the poltical party currently in power and you can buy yourself forgiveness on your next potential balance deletion.<p>Buy gold.
The mandate of the European Central Bank is to maintain price stability.<p>Raoul Pal says "They can give, for example, restaurant owners a direct payments for stimulus whilst at the same time, charging negative interest rates on larger savers".<p>But I don't see how this fits in the mandate of the ECB. Raoul Pal says "(if they get the powers by the Governments, which will come)". But that's a prediction, nothing more, and he doesn't further support it.
So I've been tracking this fairly closely via the Banking for All Act and I think a lot of the issues around this are not what they seem to be although I think they signal a very profound shift in the world of monetary politics.<p>For one this has NOTHING to do with crypto currency. This also has NOTHING to do with any kind of technological advancement at all. There is really nothing particularly more digital about the digital currencies being proposed than any other electronic bank balance or credit card database line item. I think the word digital here is an attempt to sneak in some radical changes to how the federal reserve works under the guise of doing something to modernize banking in the world of cryptocurrency.<p>So then what is this about? What these digital currencies are about is the ability for normal people to hold deposit accounts that are held directly in the Central Bank although a normal commercial bank would still act as the custodian and you would still access them through your normal bank.<p>So why go through all of the trouble to do this? I think it's basically an admission that Quantative Easing era is over and that monetary policy in general has run its course and are no longer useful in the age of 0% interest rates while we still face deflation. By having normal people hold central bank accounts, they will be able to implement a new kind of policy that they have wanted the power to do for decades: hybrid fiscal / monetary policy where the monetary policy outcome is deposited directly into the account of a normal person, not a bank.<p>This is basically the Fed acknowledging that they are getting ready for MMT.<p><a href="https://www.congress.gov/bill/116th-congress/senate-bill/3571/text" rel="nofollow">https://www.congress.gov/bill/116th-congress/senate-bill/357...</a><p>Edit: I'm getting downvoted on this, maybe because this seems conspiratorial but I don't think I'm really saying anything that speculative here. Look at the title of the article linked to in the attached tweet from the IMF: "A New Bretton Woods Moment". The people involved clearly see this as a time when they need to completely rework the international monetary system (which is what Bretton Woods was in the 40's)
I agree with this, Central Banks will try to influence the public through military backed/forced digital currencies but considering that I’m not stupid, I’ll just move to another country that accepts Bitcoin and try to accumulate it in legal ways.<p>Their fiat system is about to crash and the exactly same people that caused the crash is saying that they will solve the problems they created through centralised digital currencies? Oh please, fool me once, shame on you. Fool me twice, you can't get fooled again.