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Bank of England to explore a potential Central Bank Digital Currency

bankofengland.co.uk

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Re: Bank of England to explore a potential Central Bank Digital Currency

#271

Post by dools »

aseerdbnarng wrote: post #106
dools wrote: post #61

Earlier quoted context omitted.

The government doesn’t need everyone to have an account at the central bank in order to deposit money directly into their account. QE doesn’t stimulate the economy because bonds and reserves are functionally identical as far as bank capital requirements are concerned and reducing interest rate payments is deflationary.

>The government doesn’t need everyone to have an account at the central bank in order to deposit money directly into their account. It does make it a lot easier. The US, for example, was issuing stimulus cheques because there was no way to directly transfer funds into bank accounts. The UK had the same problem, so they pushed their stimulus through employers. In both cases there was no direct pipe from the central ba…

“The US, for example, was issuing stimulus cheques because there was no way to directly transfer funds into bank accounts”

Do you have a source for this? It seems crazy to me because in Australia almost everyone just got stimulus payments deposited the same as any other government transfer payment or tax return and we don’t all have accounts at the RBA

Re: Bank of England to explore a potential Central Bank Digital Currency

#272

Post by dools »

neilwilson wrote: post #263
aseerdbnarng wrote: post #106

Earlier quoted context omitted.

>The government doesn’t need everyone to have an account at the central bank in order to deposit money directly into their account. It does make it a lot easier. The US, for example, was issuing stimulus cheques because there was no way to directly transfer funds into bank accounts. The UK had the same problem, so they pushed their stimulus through employers. In both cases there was no direct pipe from the central ba…

"The UK had the same problem" The UK doesn't have the same problem. Our payments are entirely electronic, and there is a direct pipe from HM Treasury to every person with a Sterling bank account. The choice to run the furlough scheme via PAYE was political, not technological. Our electronic transfer system is sufficiently sophisticated that the government can operate on a commercial bank account and have the money au…

Hey are you THAT Neil Wilson, as in THE Neil Wilson? Or just A Neil Wilson?

Re: Bank of England to explore a potential Central Bank Digital Currency

#273

Post by neilwilson »

dools wrote: post #272
neilwilson wrote: post #263

Earlier quoted context omitted.

"The UK had the same problem" The UK doesn't have the same problem. Our payments are entirely electronic, and there is a direct pipe from HM Treasury to every person with a Sterling bank account. The choice to run the furlough scheme via PAYE was political, not technological. Our electronic transfer system is sufficiently sophisticated that the government can operate on a commercial bank account and have the money au…

Hey are you THAT Neil Wilson, as in THE Neil Wilson? Or just A Neil Wilson?

You may think that. I couldn't possibly comment.

Re: Bank of England to explore a potential Central Bank Digital Currency

#274

Post by david-gpu »

betterunix2 wrote: post #221
pharmakom wrote: post #190

Earlier quoted context omitted.

Digital currency makes negative interest rates possible, which is either exciting or terrifying depending on your view.

Nothing makes negative interest rates impossible right now, in fact it is a reality in several countries. Obviously not something that is available to most borrowers, but government bonds with negative nominal rates do exist, and even US treasury debt has negative real rates (i.e. accounting for inflation) for shorter duration notes/bills. Obviously there is a limit to how negative the rates can become -- eventually…

CBDCs enable negative nominal interest rates on cash deposits, not just on bonds.

What I don't understand is the consequences of that on private banks.

Re: Bank of England to explore a potential Central Bank Digital Currency

#275

Post by mandelbrotwurst »

thehappypm wrote: post #264
mandelbrotwurst wrote: post #229

Earlier quoted context omitted.

1 year CD rates are currently about .65% in the US - well below inflation even if you’re talking Core CPI only.

Just looked and yeah, this is not a good moment for CDs (or high-yield savings accounts). I used to get over 1% from my Ally bank savings account. I suppose you can't beat inflation with CDs or savings accounts right now, though in a higher-interest environment you certainly could.

> in a higher-interest environment you certainly could

Maybe, maybe not - it's possible for interest rates to be high and inflation to be even higher (stagflation).

Re: Bank of England to explore a potential Central Bank Digital Currency

#276

Post by arthurcolle »

nexuist wrote: post #171
suprfsat wrote: post #165

Earlier quoted context omitted.

Are British bank accounts not FDIC insured?

Does the FDIC cover any other country's banks than the US?

Usually "foreign" banks can mean multiple things. Imagine you have a bank out of the UK with a subsidiary based in the US (one example could be Barclays in the UK and then Barclays US).

The US based subsidiary could potentially be FDIC insured, but wouldn't cover deposits denominated in the originating foreign bank's deposit, which is logical IMO.

The FDIC has a page about this but it's pretty useless.

https://www.fdic.gov/regulations/laws/part/

Re: Bank of England to explore a potential Central Bank Digital Currency

#277

Post by ObserverNeutral »

hakfoo wrote: post #251
ObserverNeutral wrote: post #92

Earlier quoted context omitted.

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.

Taiwan tried a variant of it during Covid too-- they issued a bunch of vouchers that you could buy for NT$200/500/1000, and stores agreed to take them at three times face value, until the end of 2020. I tried to get one for my banknote collection, but it got lost in the post. :/

what were the results ?
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