Not sure if direct electronic payments without intermediaries are all that useful. How are disputes going to be dealt with?
might makes right
Bank of England to explore a potential Central Bank Digital Currency
91–100 of 277 posts
Re: Bank of England to explore a potential Central Bank Digital Currency
#92I've not really understood the need for a "digital" pound, the pound is pretty digital already. I can already have an entirely digital bank account from at least three "challenger" banks. There are also now at least two business accounts that also entirely virtual. "Faster Payments" (customer bank transfers) are delivered in seconds. I can see a need for speeding up BACS, and reducing the price of CHAPS, but apart fr…
Someone explained this to me last year with an example, and it 'clicked'. The idea is to let the government control the 'velocity of money'. For example, the US is giving out stimulus checks for COVID - the clear goal is to keep business afloat and people spending, but what if they just put the money into savings or crypto? The government did not achieve their goal. To achieve their goal, they program the money with…
Japan tried this in the 90s with expiring vouchers, results were subpar.
The bailwick of Jersey sent citizens a prepaid card with £100 expiring in 6 monhts which was also disabled for ATM withdrawls during 2020. Again moderate results.
Money is a unit of account, if you mess with it people adjust quickly, there is no free lunch.
It's not the same as giving Wellbutrin+Ritalin to somebody who is depressed.
Re: Bank of England to explore a potential Central Bank Digital Currency
#93Central banks are going fintech. Now the global currency wars can begin
Well - they began in about 1914 when the UK got out of the gold standard. Very good essay by Adam Tooze about the recent shots fired. https://foreignpolicy.com/2021/04/01/janet-yellen-mario-drag...
Thank you, enjoyed the read very much.
Re: Bank of England to explore a potential Central Bank Digital Currency
#94Earlier quoted context omitted.
The reason for a CBDC are new features. Money that can be programmed to only be used in certain ways, with certain groups, or at certain times, e.g. expiring money. It’s more nudging power for our unelected technocrat dear leaders. Imagine the possibilities!
So, less functional money? More complicated gift card?
Just think of it as money-as-a-service
Re: Bank of England to explore a potential Central Bank Digital Currency
#95Earlier quoted context omitted.
My parents grew up with the "old money", and my father in particular always said that it was easier to work with because everything divided by 2,3 or 4 easily. His opinion was always that the new money was introduced to make computerisation easier. In other words, the benefit wasn't for humans (who prefer working in 12's), but for computers.
That does not make sense to me, since computers "native" numbers are not binary and the layer on top would not care one bit if it converts the binary representation to whatever base. Not to mention that the wide-spread use of the decimal system among humans happened long before computers where even dreamed of. So those things point to the decimal system adoption having been made for humans and not for computers. Coun…
I have no evidence for any of it except the anecdotal mumblings of an old man ;) Though a lot of different societies came up with 12-based systems, so there might be something to it.
It is clear that illiterate people could work in "old money" fine. I suspect this is like the darts players who can do the mental arithmetic involved in a darts match fine, but would consider themselves "bad at maths". It's a learning cliff, but like any learning cliff, it no longer matters once you've climbed it.
Re: Bank of England to explore a potential Central Bank Digital Currency
#96I've not really understood the need for a "digital" pound, the pound is pretty digital already. I can already have an entirely digital bank account from at least three "challenger" banks. There are also now at least two business accounts that also entirely virtual. "Faster Payments" (customer bank transfers) are delivered in seconds. I can see a need for speeding up BACS, and reducing the price of CHAPS, but apart fr…
uhm... physical cash is an anonymous payment system?
Which is why it's under attack. Here in Australia the government considered (though later dropped) a bill criminalising cash transactions of over AUD$10,000 between businesses and an individual.
Covid was also used in government PR to try and sell the idea of a cashless society.
Re: Bank of England to explore a potential Central Bank Digital Currency
#97I've not really understood the need for a "digital" pound, the pound is pretty digital already. I can already have an entirely digital bank account from at least three "challenger" banks. There are also now at least two business accounts that also entirely virtual. "Faster Payments" (customer bank transfers) are delivered in seconds. I can see a need for speeding up BACS, and reducing the price of CHAPS, but apart fr…
Money is infrastructure, and the digitization of money has resulted in the privatization of that infrastructure. I don't think that was ever part of the plan, really, as far as the government goes.
its a good point but more interesting to consider the history of money as a private enterprise, aka fractional reserve banking and independence of the fed, -> private financiers of governments going back through the ages. Modern gov fiat has been the best form of money yet but is still backed by private 'lending' . Whats SUPER interesting is how the proof of work -> proof of stake models continue to provide a monetary system in which the money holders control the system, it seems for now an unavoidable component -> good incentives for value allocators
Re: Bank of England to explore a potential Central Bank Digital Currency
#98What I believe the BOE is exploring is for each citizen to have an account with the BOE and the potential for the types of money that can be used in this parallel banking system. If we think of the financial system as plumbing, the central bank has direct pipes to banks but rarely to citizens. This is not usually a problem except when you need to do a big emergency stimulus push not having direct pipes to individuals…
That idea is usually associated with postal banking - letting citizens open a bank account at the Post Office that provides basic services, no interest, but no fees either.
Re: Bank of England to explore a potential Central Bank Digital Currency
#99Earlier quoted context omitted.
> Please tell me how I can transfer one pound from me to you using a 20 line Python script? That's what people mean by digital currency. It’s been a few years so I don’t remember the details, but I’ve written Python that was about that simple using Teller[0] without any problems. Didn’t need a digital currency or direct access to the Open Banking API, just used normal Pounds Sterling and normal bank accounts. [0] htt…
A good start, but still suboptimal. It gives Teller full access to your account from what I read, can you limit it for example to just send money, without them going through your statements? And it's still only intra-UK.
> And it's still only intra-UK.
Wise (Formerly TransferWise) does forex.
Re: Bank of England to explore a potential Central Bank Digital Currency
#100Earlier quoted context omitted.
What would happen if you walked in to their server room and tried to update their database to reverse a payment?
You would be politely asked why you were in a restricted area, and asked to leave. Currency is based on trust. Trust that the ledger is correct, auditable and matches up. but to address your question, its possible to unilaterally reverse a payment, but as you'll then have to tell the clearing house to reverse the transaction, you'll need to get authorization from thirdparty, which is tricky. Moving money around insid…
How do you know that I won't steal funds from your account?
Do you simply trust that I won't, and that your bank trusts me not to do so?
I suppose the question is, what's stopping me? Trust or security?