Moving money internationally • Hacker News Board

Re: Moving money internationally

#221

Post by lowkey » Fri, Mar 04, 2022, 2:19 AM UTC

anonymoushn wrote: post #87

lowkey wrote: post #74

Earlier quoted context omitted.

> With respect to inflation, that’s being directly addressed. Please explain. I don’t understand how that’s true. In last night’s SOTU President Biden said inflation was mostly due to car prices or something equally silly. I don’t see any nation seriously addressing inflation which is officially 7.5% but I believe to be much higher for most.

I think there are multiple interest rate hikes planned for this year and the fed will cease marginal asset purchases (but not sell assets).

What if I told you that multiple 0.25% interest rate hikes are unlikely to meaningfully counter 7.5% inflation?

The last time the US had inflation this high Volcker had to raise rates to double-digits in order to break the back of inflation.

Also, don't forget that 20% of all USD ever printed were printed in the past year and the Fed has made no claims that they plan to taper the money printer anytime soon.

Re: Moving money internationally

#222

Post by sumanthvepa » Fri, Mar 04, 2022, 2:42 AM UTC

rswail wrote: post #196

sumanthvepa wrote: post #158

Earlier quoted context omitted.

Yup. You are right. In this case the US Treasury has frozen the account of the the Central Bank of the Russian Federation(CBR) holds with it. So the CBR cannot transact in USD, and in turn any Russian Bank relying on the CBR providing dollars for purchases of foreign goods and services will not be able transact through that route. It is not exclusion from SWIFT itself that is causing difficulties for Russia in this c…

Thanks for that explanation, clearly separates the action of disconnecting from SWIFT, from the act of the Fed freezing the accounts of the CBR. I take it that it means there's an account in the Fed that says the CBR has a credit of $650B with it, but it refuses to accept any transactions against that account. So the money is still "there", just can't move.

Exactly. It's probably nowhere near as large as $650B though. It is somewhat more complicated than that.

First off, only a fraction of the CBRs reserves are held as US dollar denominated holdings. Most central banks hold a variety of assets (currencies and gold) to diversify currency risk (and in the case of the CBR sanctions risk)

Secondly, even most of the USD holding are not held as actual deposits at the Fed. For one thing, Fed deposits do not pay interest. There are also relatively illiquid (even if we don't consider sanctions.)

Instead dollar holdings are held as US Treasury bonds. The US Treasury bond market is the largest financial market in the world and extremely liquid. And treasury bonds do pay a small interest. A US treasury bond is the closest thing to being an actual dollar without actually being a currency.

These bonds are held in the bond market accounts of large US and foreign banks. These accounts are frozen too.

However, because US treasury bonds need not be held directly, the vast bulk of the CBRs dollar denominated holdings are probably not directly held by it and so harder to trace. Indeed, only the CBR will know exactly how much USD denominated holdings it actually has.

Re: Moving money internationally

#223

Post by stat » Fri, Mar 04, 2022, 2:54 AM UTC

XorNot wrote: post #113

exit wrote: post #66

Earlier quoted context omitted.

Lyn Alden addresses this characterisation: https://www.lynalden.com/bitcoin-ponzi-scheme/ "Bitcoin doesn’t really meet this broader definition of a Ponzi scheme any more than the gold market, the global fiat banking system, or less liquid markets like fine art, fine wine, collectable cars, or beachfront property. In other words, if your definition of something is so broad that it includes every non-cashflow store of…

You know they'd have a point if they were talking about Bitcoin and gold, but they're not - because if you don't get understand what underpins the value of fiat, or pretend it's the same - then you have an agenda to push. Fiat has value because it's legally recognized by governments that issue it: it extinguishes tax and debt obligations in those jurisdictions. This makes it markedly different to any other of the com…

Imagine if every merchant came up with their own currency and forced you to pay them in it only. Wouldn't a global currency be a lot more efficient & frictionless?

Re: Moving money internationally

#224

Post by sailfast » Fri, Mar 04, 2022, 5:47 AM UTC

rswail wrote: post #199

sailfast wrote: post #105

Earlier quoted context omitted.

They're not preventing movement of physical currency - they are preventing use of the existing network and systems to easily move debts around so that it is exceedingly difficult and you have to move physical currency instead of bits / IOUs. Maybe a distinction without a difference to some, but it makes sense that a country that bucks the consensus of a number of member nations would be excluded from a consortium of…

The main difference I can see is that the Fed controls the dollar. It is the central account holder. Miners are distributed and there is the well known problem of 51% of the mining pool being controlled by a single party, but they would have to control 100% of the mining pool to be the equivalent of the Fed.

The dollar is only one currency. SWIFT is the network that allows transactions in multiple currencies across banks easily. There are a huge number of sovereign currencies in the world that you can buy things with, not just one. Probably more central banks than there are large mining pools.

If mining pools conspired to, say, fork a chain because somebody stole a lot of tokens due to a bug, it amounts to the same kind of control.

Re: Moving money internationally

#225

Post by zodiac » Fri, Mar 04, 2022, 6:42 AM UTC

sumanthvepa wrote: post #222

rswail wrote: post #196

Earlier quoted context omitted.

Thanks for that explanation, clearly separates the action of disconnecting from SWIFT, from the act of the Fed freezing the accounts of the CBR. I take it that it means there's an account in the Fed that says the CBR has a credit of $650B with it, but it refuses to accept any transactions against that account. So the money is still "there", just can't move.

Exactly. It's probably nowhere near as large as $650B though. It is somewhat more complicated than that. First off, only a fraction of the CBRs reserves are held as US dollar denominated holdings. Most central banks hold a variety of assets (currencies and gold) to diversify currency risk (and in the case of the CBR sanctions risk) Secondly, even most of the USD holding are not held as actual deposits at the Fed. For…

I found this article with some breakdowns of the CBR assets in a few ways (e.g. by country, by denominating currency, by asset type) (some of it based on old data): https://www.ft.com/content/526ea75b-5b45-48d8-936d-dcc3cec10...

Re: Moving money internationally

#226

Post by LittleNemoInS » Fri, Mar 04, 2022, 1:50 PM UTC

jaclaz wrote: post #212

LittleNemoInS wrote: post #211

Earlier quoted context omitted.

You are right, sorry for the confusion. (However, the WP article is not really accurate, nostro accounts can also be our money in our system)

No need to be sorry, but yes, Wikipedia articles can be a bit "vague" sometimes, it was just the first reference I found, maybe this one on investopedia is better, though it is also seemingly putting an accent on foreign currency/foreign banks, which I don't believe is the only use (I mean the concept applies to banks in a same country as well, AFAICR): https://www.investopedia.com/ask/answers/051815/what-differe...

Yes, the concept applies to all bank accounts.

As I said, Nostro is also used for own accounts. The account refleting the position of the bank (its own money and assets, not the money or assets deposited by its clients) is also called a nostro, at least in Europe.

Re: Moving money internationally

#227

Post by Aperocky » Fri, Mar 04, 2022, 4:36 PM UTC

lottin wrote: post #124

thematrixturtle wrote: post #122

Earlier quoted context omitted.

Not to put too fine a point on it, but the reason the US Federal Reserve exists is to "manipulate" the dollar. Personally, I've always liked Singapore's approach of anchoring the Singapore dollar to a basket of major currencies. However, they also give themselves leeway by not publishing the basket's constituents or weightings, meaning they can still make the dollar dance by tweaking those.

Currency pegs are vulnerable to speculative attacks. https://en.wikipedia.org/wiki/Speculative_attack

China has more than 3 trillion USD in reserves, which makes any speculative attack essentially financial suicide.

Re: Moving money internationally

#228

Post by Aperocky » Fri, Mar 04, 2022, 4:39 PM UTC

vineyardmike wrote: post #94

Aperocky wrote: post #73

Earlier quoted context omitted.

yuan is highly stable over the past 2 decades, in fact it gained about 20% on the dollar over that time frame. The problem with Yuan are more with its low convertibility (read: usage rate outside China), but that may change eventually. Using currency sanctions to achieve political goals are simultaneously expending trust in those currencies.

> highly stable over the past 2 decades, in fact it gained about 20% Stable or gaining 20%? Also its not stable, nor trustworthy. You can't trust china to not manipulate it.

> Also its not stable, nor trustworthy.

The Euro had much larger fluctuation in the same time frame.

Lecture me, are your definition of stable tied to data, or is it tied specifically to your own opinion?

How long would it be until you admit it was actually stable? 10 more years? 100? A millennia?

Re: Moving money internationally

#229

Post by CryptoPunk » Sat, Mar 05, 2022, 7:11 AM UTC

lottin wrote: post #216

CryptoPunk wrote: post #213

Earlier quoted context omitted.

It's substituting for the state, and the social organization it provides, not personal computers.

No offence, but it would probably be a good idea for you to study some theory of the state, before making such outlandish remarks.

No offence, but for you to see zero parallels between the contract enforcement that decentralized blockchain-based networks conduct, and the function of traditional legal systems, suggests to me you would benefit from taking your own advice.

No offence.

Re: Moving money internationally

#230

Post by CryptoPunk » Sat, Mar 05, 2022, 7:17 AM UTC

Nursie wrote: post #161

CryptoPunk wrote: post #140

Earlier quoted context omitted.

0.1% is huge, but in no reasonable terms can it be called "planet destroying", when it's slated to be mostly eliminated within 6 months with the transition to Proof of Stake. The characterization is hyperbole. As for the transition to PoS, the first phase of the transition was implemented on December 1st, 2020, with the launch of the Proof of Stake Beacon Chain. The Beacon Chain has been running without problems for…

> when it's slated to be mostly eliminated within 6 months Ethereum, maybe, it's been six months away for years . BTC, nope.

The difference between now and then is that now Ethereum has had the Proof of Stake Beacon in operation for over a year, and the next phase, which merges the execution chain into the PoS chain already, has a running testnet.

The projections on the completion date of the switch to PoS is now far less speculative / more reliable.