211–220 of 277 posts
Earlier quoted context omitted.
Also the British Sovereign with a nominal value of a pound an an actual value of about £320 judging by ebay https://www.ebay.co.uk/sch/i.html?_from=R40&_trksid=p2334524...
I see the scams are out in force selling "gold (plated) sovereign".
Earlier quoted context omitted.
How is it different from what we currently have, assuming that digital pounds/dollars/whatevers are convertible with existing currency? Is existing currency not issued digitally? When central banks issue cash now are they literally sending billions of dollars to the mint, trucking it off to a bank, and then the bank records it on a digital ledger? Seems wasteful.
> Is existing currency not issued digitally? It is, but it's restricted. M0 is central bank money [1]. Currently, only financial institutions have it. If the public could open accounts at the BoE, they too could own M0. CBDCs are a way to give the public M0 without putting the central bank into the retail banking business. That gives central banks powerful new levers. For example, cash limits how negative rates can g…
Bank deposits are insured up to £85k, which means they are as solid and as good as cash.
It’s well known that negative rates only bind on commercial bank deposits - if at all.
Negative rates are just a tax on banks - which they recover by charging more for loans, and paying less for deposits like any other costs.
A game the Bank of England got out of back in 2008. (People who worked at the BOE used to have the perk of a BOE bank account with the fabled 10-xx-xx sort code)
Funny how these things go in cycles.
Earlier quoted context omitted.
I would imagine this could lead to interesting changes in how people are taxed. IE taxes based on savings instead of income.
In a sense, inflation regulation is already taxing based on savings. When the value of the currency falls, everyone's savings is worth a little less (and the more one saves, the more one's relative wealth has diminished).
Earlier quoted context omitted.
The funniest thing I've seen on HN in quite a while. You could even monetise it by marketing to those people who are fans of pre-decimal currency for bizarre political reasons.
To be fair, a base-60 system has some value over a base-100 system. That being said, a pound is so worthless today that the difference between 1/60th of a pound and 1/100th is meaningless; it would just be a rounding error in most calculations. I suspect that all fractions of a £ will go the way of the shilling in the next 30 years.
A bunch of comments in this thread claim that the pound is already digital, because you can send and receive pounds using a mobile app or online banking. But these transactions simply transfer obligations (debts) denominated in pounds between parties. They are not operations on actual pounds (i.e. on the central bank currency). You can trade 'pork bellies futures' quickly, and using nothing but a computer. But no one…
Earlier quoted context omitted.
I would imagine this could lead to interesting changes in how people are taxed. IE taxes based on savings instead of income.
In a sense, inflation regulation is already taxing based on savings. When the value of the currency falls, everyone's savings is worth a little less (and the more one saves, the more one's relative wealth has diminished).
This is a pretty fundamental misunderstanding of modern economics.
What 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.
(Most bank accounts in UK have no fees if you never go overdrawn anyway, but previously banks could refuse to open one if they considered you a credit risk.)
Earlier quoted context omitted.
Agreed. The money supply should be flexible to help alleviate the effects of inevitable financial crashes. This of course devalues the savings of the average person when this happens, but it's the only way to recover from mistakes like the mortgage bubble.
> Agreed. The money supply should be flexible to help alleviate the effects of inevitable financial crashes. In reality, you either do it in secret...or it makes the crash even worse because people would be even more risk averse because they see the government using these non conventional tool...hence "it must be pretty bad, better save some more" QE is the quintessential example of this. The only American who benefi…
The US came out of the 2008 Great Recession much better than the Eurozone due to its ability to borrow cheaply as a result of QE. The Eurozone was hamstrung by the ECB's inability to act similarly and the 2012 agreement to allow the ECB to purchase "unlimited" amounts of bonds saved the currency.
Earlier quoted context omitted.
Digital currency makes negative interest rates possible, which is either exciting or terrifying depending on your view.
This is possible now, since there's a practical limit on how much business can be conducted in all cash. Even if every bank account in the country started charging an account fee to cover negative interest rates, people would continue to use banks because they are just so damn convenient.
It's really only the wealthy who would be faced with this being any significant amount of money, and those people comprise a tiny minority of bank accounts.