111–120 of 162 posts
The current structure of central bank networks required governments to offer an incentive for banks to join it
In the US thats a 6% dividend every year for the past 100 years
The same tactic will work again
Earlier quoted context omitted.
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…
I can hand my friend cash at the dinner table. And that's what I do. No central authority needs to be involved in things like this, nor should that be required.
You can also get mugged in the parking lot by the waiter or accomplices once he sees your wad of cash. Carrying cash is risky and cumbersome. This is why banks exist.
Those who don't want to carry cash will now have the new found ability to pay anyone instantly without it.
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…
The accounts that members banks have at the Federal Reserve are legally equivalent to paper money. The banks can exchange part of that account balance for paper money, or exchange paper money for that account balance at any time. To settle debts between banks they almost never cart truckloads of cash between each other, but simply ask the federal reserve banks to adjust their balances accordingly.
This looks a LOT like the layer 2 money that banks create, but it is layer 1.
If RBI works similarly, then it is not really apparent why a wholesale CBDC would have substantial value. Interbank settlement would already occur via balance transfers at the central bank. It is not even remotely clear to me how an "account-based" wholesale CBDC would differ from the status quo at all. The main thing they mention is allowing more conditions to be attached to transactions allowing "programming" the central bank money (presumably in ways similar to "smart contracts"). There is no mention of why that could not simply be done by enhancing the existing systems, but they also point out that it could be a new tech stack from ground up, which suggests that they feel the existing tech stack has flaws.
Retail CBDC would be potentially more interesting, but also far more controversial. Nobody really cares about a central bank keeping a close eye on how banks send money to each other, but a retail CBDC is effectively an attempt to replace cash. There are a lot of issues with that, like people want privacy in cash transactions, but there is no way the bank wants create a new means of money laundering or similar. The fact that many plans for retail CBDCs seem to want desperately to adopt as many crypto currency technologies as possible causes lot of worry. Thinks like losing private keys meaning loss of money (and if intermediaries hold keys instead, you better hope they have really good information security.)
Earlier quoted context omitted.
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…
Isn't FedNow separate from CBDC proposals? Some overlap in purpose but different in function. https://www.pymnts.com/cryptocurrency/2022/cbdc-weekly-feds-...
FedNow is the solution the Federal Reserve is proposing for a "digital dollar". It will only be used for inter-bank settlements.
Earlier quoted context omitted.
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…
But we currently have the option to bypass those restrictions if we want. Isn't it concerning that these systems might become more or less "mandatory" at some point?
It's surprising to see that there are liberal proponents of this. You don't have to be a raging libertarian to see the risks of unlocking this much financial reach for governments. We (in the West) may now mostly live under reasonable governments, but there's obviously no guarantee that this won't change (including towards your ), and implementing social credit score systems and other dystopian things would be much e…
It's not surprising. Liberals want the government to take money from people to fund itself. A digital currency allows them to do that much more efficiently.
Earlier quoted context omitted.
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…
> 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 hours". We literally have just that. It is a lie that digital money is required for that This is just side effect of them putting new system up just…
Earlier quoted context omitted.
That's the kicker; I don't believe there's any government that wants anonymous digital cash. If anything, they want to be the only ones that can track it.
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…
Functioning democracies are sort of like spherical cows or frictionless surfaces: they don’t actually exist but we pretend they do as a simplifying assumption. Sometimes we are having more sophisticated discussions about bovine anatomy or the friction of ice; other times we discuss the principal-agent problem as it applies to the administrative state within a democracy.
Earlier quoted context omitted.
I don't know about totalitarian systems. They are involved with CBDCs. How do you know they aren't proponents of CBDCs?
Because CBDC are the complete opposite of bitcoin philosophy. Bitcoin is about personal freedom and separating state and money. CBDC is about centralised govt control and monitoring
Earlier quoted context omitted.
I get your point and things are nuanced depending on the situation. But the amount of control this tracking can create is potentially evil. We have to be careful with this. I'd rather work for less and keep control than doing this. But what this is going to generate is massive govt. control. Worse than before. Not telling about India specifics though.
But, India is so far behind, it may need a little bit of "evil" for a little while to clean up all the layers of intermediary corruption before getting better. It's already awful to live there for a large part of the population, and they have so little, that the government really has no use tracking them: yes, they re starving, going to work for $5 a month, and sleeping... like, okay they knew that already, maybe hav…
I would not bet my safety on more govt. control. Of course my situation is different from many of those people.
At the same time, promoting long-term govt. and state dependence is, IMHO, the wrong choice. As a temporary situation it could be useful, but to promote autonomy when ppl get wealthier, not to make them depend on power.