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Ask HN: Why do we need central bank digital currency (CBDC)?

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Re: Ask HN: Why do we need central bank digital currency (CBDC)?

#81

Post by tadfisher »

eternalban wrote: post #24

Related: https://emmer.house.gov/2022/1/emmer-introduces-legislation-... “Not only would this CBDC model centralize Americans’ financial information, leaving it vulnerable to attack, but it could also be used as a surveillance tool that Americans should never tolerate from their own government.”

I don't understand how CBDC would do either. I was under the impression that a CBDC would be an instant interbank transfer mechanism, so it would be replacing ACH, not bank accounts or cash. If that's correct, then a CBDC would give the government exactly the same visibility into money flow and financial information as it currently has, given that the Fed runs ACH and the central banking system.

Re: Ask HN: Why do we need central bank digital currency (CBDC)?

#82

Post by jqpabc123 »

hocuspocus wrote: post #72
jqpabc123 wrote: post #63

Earlier quoted context omitted.

EU's SCT Inst SCT Inst stands for SEPA Instant Credit Transfer scheme. It was introduced by the Euro Retail Payments Board (ERPB) in order to enable rapid electronic payments within the eurozone. In a nutshell, SCT Inst facilitates an instant or near-instant clearing of a transaction between originator and beneficiary. Potato, po-tat-o. ERPB = Central Bank Credit Transfer Scheme = Digital Currency Put them together a…

What you want is instant interbank settlements that have existed for 20+ years in some places. The scope of CBDCs is way broader than that. If no commercial bank is impacted by a CBDC then it wouldn't be a central bank digital currency, just a digital currency, and that's already the case for most of the money supply. If you use the term CBDC you're implying that the central bank would oversee a much bigger part of t…

If no commercial bank is impacted by a CBDC

Commercial banks will be impacted --- in a good way. Interbank transactions will take place instantly 24/7/365 at zero cost.

Consumers will be impacted too --- in a good way. They'll be able to transfer money from their bank account to merchants, friends and family instantly 24/7/365 at zero cost --- no delays, no fees, no processors, no paper forms, no middlemen --- something that never existed before --- at least not in the USA.

Basically, a CBDC will make it possible to add digital wallet functionality to all bank accounts.

Like it or not, a CBDC is coming. The financial case for it is overwhelming.

Re: Ask HN: Why do we need central bank digital currency (CBDC)?

#83

Post by eternalban »

tadfisher wrote: post #81
eternalban wrote: post #24

Related: https://emmer.house.gov/2022/1/emmer-introduces-legislation-... “Not only would this CBDC model centralize Americans’ financial information, leaving it vulnerable to attack, but it could also be used as a surveillance tool that Americans should never tolerate from their own government.”

I don't understand how CBDC would do either. I was under the impression that a CBDC would be an instant interbank transfer mechanism, so it would be replacing ACH, not bank accounts or cash. If that's correct, then a CBDC would give the government exactly the same visibility into money flow and financial information as it currently has, given that the Fed runs ACH and the central banking system.

(I have not read the specs so you should verify) My impression is that you no longer need a bank account. That is one of the selling points for addressing access to money for those who don't/can't have bank accounts.

Re: Ask HN: Why do we need central bank digital currency (CBDC)?

#84

Post by 0x64 »

jqpabc123 wrote: post #49
idiotsecant wrote: post #28

Earlier quoted context omitted.

In short, permissioned digital currency is all the bad parts of crypto and none of the good parts, while simultaneously getting rid of all the good parts of cash. There's almost no benefit to the user that something else doesn't do better.

Totally upside down and backwards. Crypto is all the bad parts of a CBDC and none of the good parts. A CBDC will eliminate any argument for crypto ... with the exception of paranoia ... which is unfounded since crypto keeps a public record of everything you do.

>A CBDC will eliminate any argument for crypto

So a US CBDC will be decentralized, permissionless, transparent, non-censoring, and run on open-source software based on an open specification?

Re: Ask HN: Why do we need central bank digital currency (CBDC)?

#85

Post by jqpabc123 »

0x64 wrote: post #84
jqpabc123 wrote: post #49

Earlier quoted context omitted.

Totally upside down and backwards. Crypto is all the bad parts of a CBDC and none of the good parts. A CBDC will eliminate any argument for crypto ... with the exception of paranoia ... which is unfounded since crypto keeps a public record of everything you do.

>A CBDC will eliminate any argument for crypto So a US CBDC will be decentralized, permissionless, transparent, non-censoring, and run on open-source software based on an open specification?

No, it will a be a stable currency that people actually use without even thinking about it to make instant money transfers at zero cost.

Re: Ask HN: Why do we need central bank digital currency (CBDC)?

#86

Post by 0x64 »

jqpabc123 wrote: post #85
0x64 wrote: post #84

Earlier quoted context omitted.

>A CBDC will eliminate any argument for crypto So a US CBDC will be decentralized, permissionless, transparent, non-censoring, and run on open-source software based on an open specification?

No, it will a be a stable currency that people actually use without even thinking about it to make instant money transfers at zero cost.

Because stable currencies do not exist in the world of cryptos? Dai [1], Rai [2], and USDC [3] are some examples that are all stable, and all dramatically different from each other.

Fees are currently as low as $0.03 on Ethereum layer-2 solutions (!= side-chain) [4]. The fees will further fall as the technology improves, and once L1 gets (data-/dank-)sharding and other L2-scaling oriented upgrades.

[1] https://makerdao.com/en [2] https://reflexer.finance [3] https://www.circle.com/en/usdc [4] https://l2fees.info

Re: Ask HN: Why do we need central bank digital currency (CBDC)?

#87

Post by glennvtx »

jqpabc123 wrote: post #49
idiotsecant wrote: post #28

Earlier quoted context omitted.

In short, permissioned digital currency is all the bad parts of crypto and none of the good parts, while simultaneously getting rid of all the good parts of cash. There's almost no benefit to the user that something else doesn't do better.

Totally upside down and backwards. Crypto is all the bad parts of a CBDC and none of the good parts. A CBDC will eliminate any argument for crypto ... with the exception of paranoia ... which is unfounded since crypto keeps a public record of everything you do.

Governments are proven oppressors, Every single mass abuse of human rights, war, genocide has been carried out by government. Taking the power of the purse from government is the next big human rights issue of our age, rendering taxation by inflation impossible, and empowering individuals to hold government accountable.

Re: Ask HN: Why do we need central bank digital currency (CBDC)?

#88

Post by glennvtx »

pid-1 wrote: post #13
yonaguska wrote: post #8

Earlier quoted context omitted.

> Practically, it will make little or no difference to you. So when the fed reserve decides inflation is too high because they printed too much money and kept interest rates low- instead of trying to "soften the labor market"/drive unemployment up and more people into poverty - with a digital currency, they can simply zap your money away. No need for financial "austerity" for the poor's to endure. What could go wrong…

> with a digital currency, they can simply zap your money away. Brazil did that in the 90s, digital currency wasn't needed.

Yes, but with an open, global system like bitcoin, they can't do this any longer.

Re: Ask HN: Why do we need central bank digital currency (CBDC)?

#89

Post by glennvtx »

lakomen wrote: post #6

... mining is killing the planet, it's a big contributor. No we don't need more reasons to waste energy.

Mining isn't killing the planet either, mining is securing a ledger. These technologies are for the first time in human history, divorcing the power of the purse from governments, who have only ever abused it. It is the human rights issue of our age, rendering things like inflation and financial censorship impossible without resorting to threats of violence. They provide an open, public ledger enabling new forms of ownership in a trust-less, transparent system, we can use to organize solutions previously mired in human bureaucracy.
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