81–90 of 162 posts
Really wish they said what a CBDC is.
Does a term require more than 2 seconds of thinking? If yes, then describe it, otherwise it's unnecessary. This one seemed obvious.
It's customary to expand shortcut in full if it there is chance it might be unknown to the reader and this isn't even a financial blog but a tech one.
Earlier quoted context omitted.
Paper money is a small percentage of total money, and a much smaller percentage in terms of actual transactions. Most of the money is already digital.
Maybe transaction wise paper money is still a small percentage. But my understanding (correct me if wrong) is that the total money running in the country at any momemnt is never more than what is printed. With digital money the central bank can issue it without the cost to print. As per (1) it costs around Rs 10 to Rs 17 to print Rs 100 note and have to be reprinted once they get damaged. (1) https://www.hindustantim…
It's all elastic, and central banks have sophisticated mechanisms to tighten or loosen that elastic band. The entire financial industry exists to think of novel ways to create leverage, stitching together assets and promises into towering edifices of economic power... all founded on the idea/hope/prayer that nobody will call in all the bets at once.
Honestly, you might not want to look behind the curtain on this one. It's one of those existential risks you can't effect as a single human. It's a collective suspension of disbelief that allows the modern world to function. If/when the correction happens... it will not be fun to live through.
If you're a glutton for punishment, here's some reading:
"Chapter 2 studies leverage in the nonfinancial private sector before and during the COVID-19 crisis, pointing out that policymakers face a trade-off between boosting growth in the short term by facilitating an easing of financial conditions and containing future downside risks. This trade-off may be amplified by the existing high and rapidly building leverage, increasing downside risks to future growth. " https://www.imf.org/en/Publications/GFSR
https://research.macrosynergy.com/the-global-leverage-proble...
https://www.imf.org/en/Blogs/Articles/2021/03/29/confronting...
https://en.wikipedia.org/wiki/Fractional-reserve_banking
https://en.wikipedia.org/wiki/Money_multiplier
Earlier quoted context omitted.
Now you are assuming that "governments" and "citizens" are two disjoint groups with different agendas. That's a really bleak way of looking at it, at least in functioning democracies. I'd certainly protest loudly if some sort of anonymity wasn't part of the plan at every step. I was happy to see at least some footnotes from a recent pilot CDBC mentioning this. https://www.riksbank.se/globalassets/media/rapporter/e-kr…
>Now you are assuming that "governments" and "citizens" are two disjoint groups with different agendas. They are.
Meh. The article expends zero effort in actually engaging with the Reserve Bank of India's motivations or the CBDC design [1], and is filled with shallow comments about the roll-out in other countries. This is a very important topic as it has the potential to reshape banking/economics on the timescale of decades. For a good down-to-earth understanding of "layer 1" -vs- "layer 2" money, refer the following post [2]. I…
Hence the reason why the RBI will eventually use UPI to piloting their CBDC on top of it anyway and force all of India to use it.
That should scare us all.
Earlier quoted context omitted.
Paper money is a small percentage of total money, and a much smaller percentage in terms of actual transactions. Most of the money is already digital.
Isn't all money still paper behind the scenes, where the banks transfer to one another
The problem, of course, is that when the money is just a number on a screen, it's very difficult to ensure that the humans running the database don't magically decide they have a bigger number than they aught to. This is an unsolved problem.
Cashless societies terrify me. So easy to control people when you can decide what and with whom they can transact with.
So easy to control people when you can decide what and with whom they can transact with. Surprise! Your bank and credit card company can do that now. As being proposed in the USA, a CBDC will only affect settlement transactions between banks. Everything else will stay exactly the way it is now except transactions will be much faster with settlements taking place in real time, 24/7/365 instead of only during "bankers…
Cashless societies terrify me. So easy to control people when you can decide what and with whom they can transact with.
So easy to control people when you can decide what and with whom they can transact with. Surprise! Your bank and credit card company can do that now. As being proposed in the USA, a CBDC will only affect settlement transactions between banks. Everything else will stay exactly the way it is now except transactions will be much faster with settlements taking place in real time, 24/7/365 instead of only during "bankers…
https://www.pymnts.com/cryptocurrency/2022/cbdc-weekly-feds-...
Remind me about https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis... > On 8 November 2016, the Government of India announced the demonetisation of all ₹500 and ₹1,000 banknotes > Several people were reported to have died from standing in queues for hours to exchange their demonetised banknotes.[180][181][182][183][184][185] Deaths were also attributed to lack of medical help due to refusal of demonetised b…
The first deadline of 17 days was to get rid of the demonetised notes by depositing them with banks.
The logistics of the demonetisation was a total clusterfuck. The banking infrastructure was kept in the dark so they were utterly unprepared to handle the rush. They were provided with zero information and SOPs so they were also totally clueless to handle different situations. To make matters worse the new weren't readily available. So the withdrawals were rationed. 500 and 1000 notes formed the bulk of notes in supply, something like 90% of notes in circulation. And this was at a time when digital payments weren't adopted by the masses. Most of the daily wage earners didn't even have a bank account. India is a large country with lots of remote, hard to access places. People were still clinging on to these old currency notes, as their primary savings, to discover that they were useless 2-3 years later. All of these lead to a cascading failures. Imagine removing 90% of circulating blood from a large animal. That's exactly what happened to Indian economy.
I'm sure there's like a dozen PhDs in there for humanities, economics students in there.
Here's a good (but hard to find) video on the topic: https://www.youtube.com/watch?v=qELSFa5NtYc
The speaker has researched on this topic for decades.
Earlier quoted context omitted.
Most examinations of CBDC paint a grim picture of things to come, mostly in terms of yielding absolute power to the central bank. As with any situation involving power, with good intentions you can do wonderful things, with bad intentions you can do equally horrifying things. In the Indian context, the latter is of particular concern, especially when one man can demonetise the whole country overnight on a whim. There…
The question should be: with the track record of wild debt countries are showing, the Twitter leaked mails shpwing political control behind and the raise in taxes, what makes you think they will do something good? Besides that: why should I put my effort at the management of people I do not trust so that they do what they deem appropriate without paying for their mistakes? Am I his slave or something?
Generally you are either directly or indirectly their elector so they are in fact accountable to you. But yeah, that's kind of how democracy works.
I'm personally only supportive of privacy-preserving CBDCs like the Rohan Grey e-cash proposal.
Meh. The article expends zero effort in actually engaging with the Reserve Bank of India's motivations or the CBDC design [1], and is filled with shallow comments about the roll-out in other countries. This is a very important topic as it has the potential to reshape banking/economics on the timescale of decades. For a good down-to-earth understanding of "layer 1" -vs- "layer 2" money, refer the following post [2]. I…
Most examinations of CBDC paint a grim picture of things to come, mostly in terms of yielding absolute power to the central bank. As with any situation involving power, with good intentions you can do wonderful things, with bad intentions you can do equally horrifying things. In the Indian context, the latter is of particular concern, especially when one man can demonetise the whole country overnight on a whim. There…
Western (and even a lot of Indian) media likes to paint a lot of Modi’s support based on his religious discrimination, but in reality that’s only a tiny fraction of the support he enjoys. Most of his support comes from the fact that, for example, even as demonetization has probably led to India’s GDP being far smaller than it would have been otherwise, many poor people are still better off because funds and services that would in the past have largely been eaten up by political and administrative intermediaries actually make it to the people.
And a large part of that is the result of some of the problematic measures like the central identification numbers and the digitization of money.