41–50 of 149 posts
Buy gold.
If CBDC issuance coincides with banning physical cash, what makes you think that they won't enforce capital controls on alternative currencies?
one frightening prediction I've heard is that we will have parallel economies. One for UBI consumer serfs who receive a monthly stipend that expires at the end of each month, another for people who work and receive payment perhaps in other independent currencies, and another, which already exists, for the very wealthy who hold wealth primarily in tangible assets like real estate and fine art. This will either fail sp…
Are these proposed central bank “digital currencies” anything more than a centralised or federalised database of who-owns-how-many? And if so, how does that differ from what we have now? That is, in a European country, I have an account with my bank, and my bank has an account with the central bank (or the two interact in some other way). My understanding of the current system is limited, I merely know some large por…
I can half answer that and hope somebody can complete the story. What you have in your bank account is not digital cash. It's effectively a note that the bank owes you cash. This may sound like a technical detail but as far as I understood without physical money there would be no bank accounts. That's what I always wondered about: how could an economy go 100 percent electronic banking, if banking is built on the exis…
Also why would a bank require physical cash? Banking is based on savings and loans, debt and credit, not cash. The money in your bank account is not backed by real coins somewhere in a vault.
Earlier quoted context omitted.
Well, the current system as you describe is a two-level system with your bank in between; a CBDC allows you to "have an account" directly with the central bank directly and make/receive payments without needing a retail bank intermediary. It also enables central banks to achieve policy goals that they could not earlier - for example, in the last big crisis all the quantitative easing did not result in as much actual…
I see. But then again I am a bit confused by this text in the report on digital euro[0], which was recently posted on HN. “While the Eurosystem would always retain control over the issuance of a digital euro, supervised private intermediaries would be best placed to provide ancillary, user-facing services and to build new business models on its core back-end functionality. A model whereby access to the digital euro i…
There are key needs and major requirements additionally for the CBDC that are documented in the latest BIS and ECB reports.
“Rock stars against drugs – that's what we want, isn't it? Government-approved rock-n-roll? Woo! We're partying now!”
The entire reason for crypto is the already ridiculous level of control exerted over various gatekeepers. How do I know? I am part of the system.
European banks recently started toying with the idea of passing down negative interest rates to customer bank deposits, so that banks are less squeezed by reserves yielding negative returns (breaking the typical bank business model). Just think, if CBDCs pass down the negative interest rates to everyone's cash, inside or outside of banks. That's not a currency I would be happy to hold.
But all of these CB backed digital currencies aren’t like crypto. CBs will presumably be roots of trust and just maintain entries in a normal database.
CBDCs today are mostly based on trusted nodes, e.g. CBs and Banks, with the goal of transforming the current monetary “backend” into a digital automated way without losing the control. Think of it as breaking a monolith into a microservice world, which offers “innovation” and lower barrier to entry (underbanked) among other features.
one frightening prediction I've heard is that we will have parallel economies. One for UBI consumer serfs who receive a monthly stipend that expires at the end of each month, another for people who work and receive payment perhaps in other independent currencies, and another, which already exists, for the very wealthy who hold wealth primarily in tangible assets like real estate and fine art. This will either fail sp…
California already has laws for creating landed gentry (prop 13 inheritance)
Earlier quoted context omitted.
Well, the current system as you describe is a two-level system with your bank in between; a CBDC allows you to "have an account" directly with the central bank directly and make/receive payments without needing a retail bank intermediary. It also enables central banks to achieve policy goals that they could not earlier - for example, in the last big crisis all the quantitative easing did not result in as much actual…
Hmmm, wouldn't the CBDC be safer than any other place to put your money? So in a crisis, wouldn't you sell everything and put it in the CBDC including potentially government bonds precisely at the time the government probably needs to borrow cheaply? That seems like a recipe for disaster to me.
European banks recently started toying with the idea of passing down negative interest rates to customer bank deposits, so that banks are less squeezed by reserves yielding negative returns (breaking the typical bank business model). Just think, if CBDCs pass down the negative interest rates to everyone's cash, inside or outside of banks. That's not a currency I would be happy to hold.