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What is the fuss over central-bank digital currencies?

economist.com

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Re: What is the fuss over central-bank digital currencies?

#31

Post by danialtz »

WEFwoof wrote: post #21
jmnicolas wrote: post #3

Digital currencies allow for full tracking of every transactions and are a privacy nightmare. They allow applying negative interest rate on everybody and they would facilitate neverending hyperinflation (no need to print new bills at great expense). Hence they can't coexist with cash so say goodbye to cash. I don't like where we're going.

> I don't like where we're going. Me neither, not at all. The idea of a digital Euro is already worked on: https://www.ecb.europa.eu/euro/html/digitaleuro.en.html Obviously, it's an "inclusive" system, a term that evokes in me strong feelings of mistrust, as it has no provisions of alternatives like not moving to a digital currency. "Inclusive" by mandate and without consent, or the possibility to opt out. (Somewhat…

The mandate is not discsussed yet but could come. CBs are running many pilots since they don‘t know also whether CBDC would work for their incentive, since it has to be accepted by citizens and not create a shock to economy.

side note, „inclusive“ here refers to unbanked population. Today they can use cash, but many people specially in poor countries have no access to banking. A no-smartphone no-bank-needed digital cash could enable big part of countries to be included in financial system (some up to 40% of population)

Re: What is the fuss over central-bank digital currencies?

#32

Post by bawolff »

anm89 wrote: post #14

Important note: central bank digital currencies are not crypto currrencies. They are not block chains. They are not decentralized. They are not permissionless. I cannot find a record of any CBDC which clearly states that it want's to use any of these technologies. I'd be interested to be proven wrong. Central bank digital currencies are essentially a new hybrid monetary/fiscal policy tool. Historically the Federal re…

This makes no sense. Are you saying that digital currency is a fancy term for a direct deposit? We've had direct deposits for a very long time. My tax refund comes as a direct deposit. The government seems to be able to directly give me money digitially just fine.

Re: What is the fuss over central-bank digital currencies?

#33

Post by cmdshiftf4 »

jmnicolas wrote: post #3

Digital currencies allow for full tracking of every transactions and are a privacy nightmare. They allow applying negative interest rate on everybody and they would facilitate neverending hyperinflation (no need to print new bills at great expense). Hence they can't coexist with cash so say goodbye to cash. I don't like where we're going.

>I don't like where we're going.

You'll own nothing and you'll be happy.

Re: What is the fuss over central-bank digital currencies?

#34

Post by anm89 »

bawolff wrote: post #32
anm89 wrote: post #14

Important note: central bank digital currencies are not crypto currrencies. They are not block chains. They are not decentralized. They are not permissionless. I cannot find a record of any CBDC which clearly states that it want's to use any of these technologies. I'd be interested to be proven wrong. Central bank digital currencies are essentially a new hybrid monetary/fiscal policy tool. Historically the Federal re…

This makes no sense. Are you saying that digital currency is a fancy term for a direct deposit? We've had direct deposits for a very long time. My tax refund comes as a direct deposit. The government seems to be able to directly give me money digitially just fine.

> Are you saying that digital currency is a fancy term for a direct deposit?

Basically yes, but specifically only for the case of a direct deposit between the Federal reserve and an individual. That doesn't currently exist.

But that's also basically my point. CBDCs are nothing new from an operational or technological perspective which I think is something many people are getting confused about. They are a new thing in terms of policy capabilities for central banks. They are not a new thing in any other way. All the technology already exists.

Re: What is the fuss over central-bank digital currencies?

#35

Post by surfsvammel »

anm89 wrote: post #14

Important note: central bank digital currencies are not crypto currrencies. They are not block chains. They are not decentralized. They are not permissionless. I cannot find a record of any CBDC which clearly states that it want's to use any of these technologies. I'd be interested to be proven wrong. Central bank digital currencies are essentially a new hybrid monetary/fiscal policy tool. Historically the Federal re…

Central bank digital currencies can be blockchain based, they can be decentralised etc. In fact, he central banks that I have spoken to would rather have a decentralised currency, because it would mean less work for them.

The motivation of a central bank is easy; make sure the currency is liquid, make sure they can use the currency to affect inflation and so forth. Whatever setup gives them the best ability to meet those kinds of goals will be what decided what they go for.

They motivation and goals are quiet unique in that sense, it is totally different from the commercial banks or the private sector. Therefore I do believe we will see proper blockchain, decentralised, systems in the future.

Re: What is the fuss over central-bank digital currencies?

#36

Post by brobdingnagians »

danialtz wrote: post #24
jmnicolas wrote: post #3

Digital currencies allow for full tracking of every transactions and are a privacy nightmare. They allow applying negative interest rate on everybody and they would facilitate neverending hyperinflation (no need to print new bills at great expense). Hence they can't coexist with cash so say goodbye to cash. I don't like where we're going.

Privacy is ranked the second after security in a recent survey from ECB, so it is a known demand and design criteria for both sides. CBDC will co-exist with cash for years to come. Fully monitored CBDC will be at a high disadvantage by citizens specially in modern world, while fully private one would not be allowed by CBs due to need for transparency. Here also comes the product builders. We could design a CBDC that…

"privacy" as defined by the grocery store down the street can't see your history of purchases or privacy as in the government doesn't have every detail of every sexual fetish you've ever paid for? The FBI has been stockpiling that for decades.

Those are very different things, and from Europe's approach to the GDPR, I think it is the first.

Re: What is the fuss over central-bank digital currencies?

#37

Post by [deleted] »

bawolff wrote: post #32
anm89 wrote: post #14

Important note: central bank digital currencies are not crypto currrencies. They are not block chains. They are not decentralized. They are not permissionless. I cannot find a record of any CBDC which clearly states that it want's to use any of these technologies. I'd be interested to be proven wrong. Central bank digital currencies are essentially a new hybrid monetary/fiscal policy tool. Historically the Federal re…

This makes no sense. Are you saying that digital currency is a fancy term for a direct deposit? We've had direct deposits for a very long time. My tax refund comes as a direct deposit. The government seems to be able to directly give me money digitially just fine.

[deleted]

Re: What is the fuss over central-bank digital currencies?

#38

Post by GoblinSlayer »

WEFwoof wrote: post #17
GoblinSlayer wrote: post #6

They are inherently dangerous, money as a service, with all associated risks. What's next? Car as a service? House as a service? Government as a service? Life as a service?

"Welcome To 2030: I Own Nothing, Have No Privacy And Life Has Never Been Better" https://www.weforum.org/agenda/2016/11/how-life-could-change... Some people call that utopia "technocratic collectivism", and others still salivate at the mere thought. In any case, it's part of the "new normal" championed by Schwab's WEF.

Except that we won't have post-scarcity by 2030.

Re: What is the fuss over central-bank digital currencies?

#39

Post by sanxiyn »

bawolff wrote: post #32
anm89 wrote: post #14

Important note: central bank digital currencies are not crypto currrencies. They are not block chains. They are not decentralized. They are not permissionless. I cannot find a record of any CBDC which clearly states that it want's to use any of these technologies. I'd be interested to be proven wrong. Central bank digital currencies are essentially a new hybrid monetary/fiscal policy tool. Historically the Federal re…

This makes no sense. Are you saying that digital currency is a fancy term for a direct deposit? We've had direct deposits for a very long time. My tax refund comes as a direct deposit. The government seems to be able to directly give me money digitially just fine.

You can have deposit in a bank, and that bank has deposit in the central bank. That's the current situation. With CBDC, you can have deposit in the central bank. This is an important difference.

Re: What is the fuss over central-bank digital currencies?

#40

Post by anm89 »

surfsvammel wrote: post #35
anm89 wrote: post #14

Important note: central bank digital currencies are not crypto currrencies. They are not block chains. They are not decentralized. They are not permissionless. I cannot find a record of any CBDC which clearly states that it want's to use any of these technologies. I'd be interested to be proven wrong. Central bank digital currencies are essentially a new hybrid monetary/fiscal policy tool. Historically the Federal re…

Central bank digital currencies can be blockchain based, they can be decentralised etc. In fact, he central banks that I have spoken to would rather have a decentralised currency, because it would mean less work for them. The motivation of a central bank is easy; make sure the currency is liquid, make sure they can use the currency to affect inflation and so forth. Whatever setup gives them the best ability to meet t…

The central bank is CENTRAL. They want to CENTRALLY coordinate monetary activity. They are never going to sign up to decentralize their one policy tool.

I don't disagree that it is technically feasible to implement these on a block chain, and I think it is possible that there may be some effort to tokenize a currency to track it on a block chain in a secondary way, but that is very different from the block chain being the irrefutable source of truth for ownership of the currency for a sovereign. That will never happen.

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