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Digital Money Across Borders: Macro-Financial Implications

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Re: Digital Money Across Borders: Macro-Financial Implications

#41

Post by biolurker1 »

nabla9 wrote: post #22
mikro2nd wrote: post #8

I find it interesting that the paper focusses on Central Bank Digital Currencies and Global Stablecoins, but pretends not to see/prefers not to deal with the elephant in the room - Bitcoin. If anything is a candidate for a potential Reserve Currency, BTC is it, imho. Deep in the footnotes comes the contorted logic," According to the IMF Treatment of Crypto Assets in Macroeconomic Statistics, crypto assets such as Bit…

BTC has no benefit over central counterparty clearing and settlement. Even if the technology would adapt cryptographic ledgers, there is no reason to use another currency for that. You use sovereign currencies as before.

Obvious difference that no one entity can control supply. If that's good or bad is another long academic discussion

Re: Digital Money Across Borders: Macro-Financial Implications

#42

Post by biolurker1 »

javert wrote: post #39
nabla9 wrote: post #22

Earlier quoted context omitted.

BTC has no benefit over central counterparty clearing and settlement. Even if the technology would adapt cryptographic ledgers, there is no reason to use another currency for that. You use sovereign currencies as before.

Obviously, if you are a user of the currency and don't want it to be inflated by the central bank, there's at least one thing in bitcoin's favor, as it has a fixed maximum supply. You can argue that's a bad thing if you want, but just ignoring that it exists doesn't make much sense.

I wrote the same message before seeing yours :)

Re: Digital Money Across Borders: Macro-Financial Implications

#43

Post by biolurker1 »

v4dok wrote: post #20

I was in many crypto presentations during the 2018 BTC rise. The crypto-anarchists (left and right leaning) were getting their spotlight and laying out their "dream". Basically an updated version of Kropotkin's and Bakunin's work for the blockchain-era. I really don't get what is the hate with the central banks getting control over the money. Yes they are not appointed by the Government but it does not matter, the mo…

I don't understand why BTC as optional means of transaction is dystopic

Re: Digital Money Across Borders: Macro-Financial Implications

#44

Post by seibelj »

janoside wrote: post #40
raverbashing wrote: post #26

Earlier quoted context omitted.

What I love about the Bitcoin enthusiasts is how they picture it to be the be all/end all magical money that will solve everything Meanwhile the real big money-movers (legal or illegal) are still using bank accounts and paper companies in "business-friendly" jurisdictions.

The "market" is always active and always looking to select the best of everything, including money. Bitcoin isn't be-all/end-all magical money - but it is a massive, order-of-magnitude improvement on history's greatest "hard money" (gold). The markets of the world are slowly coming to understand the value of this "best reserve asset and best collateral asset ever seen" (Raoul Pal). A new digital, internet-native asse…

This is the history of all revolutionary technologies. At first it seems like a useless toy, then the establishment laughs at and denigrates it, then it's fought aggressively, then it takes over. I would say we are almost past the "fought aggressively" stage, at least for Bitcoin, and into the "taking over" stage as smart institutional money begins to get exposure.

It's very interesting that a large contingent of smart software people on HN heard about Bitcoin extremely early, said it was a useless failure, and then had to re-justify their position for a decade as Bitcoin marches on. It's impossible for anyone to claim Bitcoin has no value at this point, but on every blockchain post on HN there is a core of haters that will make the same tired arguments against it. Meanwhile, no one cares!

Re: Digital Money Across Borders: Macro-Financial Implications

#45

Post by anoraca »

mikro2nd wrote: post #8

I find it interesting that the paper focusses on Central Bank Digital Currencies and Global Stablecoins, but pretends not to see/prefers not to deal with the elephant in the room - Bitcoin. If anything is a candidate for a potential Reserve Currency, BTC is it, imho. Deep in the footnotes comes the contorted logic," According to the IMF Treatment of Crypto Assets in Macroeconomic Statistics, crypto assets such as Bit…

Maybe because whatever entity created bitcoin controls what, like 9% of all bitcoin? And nobody knows who or what they are? Why would anyone want to be involved in a financial system that functions that way?

Re: Digital Money Across Borders: Macro-Financial Implications

#46

Post by bboygravity »

nabla9 wrote: post #22
mikro2nd wrote: post #8

I find it interesting that the paper focusses on Central Bank Digital Currencies and Global Stablecoins, but pretends not to see/prefers not to deal with the elephant in the room - Bitcoin. If anything is a candidate for a potential Reserve Currency, BTC is it, imho. Deep in the footnotes comes the contorted logic," According to the IMF Treatment of Crypto Assets in Macroeconomic Statistics, crypto assets such as Bit…

BTC has no benefit over central counterparty clearing and settlement. Even if the technology would adapt cryptographic ledgers, there is no reason to use another currency for that. You use sovereign currencies as before.

> BTC has no benefit over central counterparty clearing and settlement.

I can think of a few huge practical benefits:

1. Try to transfer money cross border within the EU/SEPA zone on a Friday. It'll be in the receiving account on Tuesday (and usually not in the morning). That's around 96 hours between sending and receiving. During weekdays this goes to 24 hours. Not even talking about intercontinental transfers. And this is assuming there are no national holidays in either the sending or receiving country during that period. And then there are people that complain that Bitcoin's 2. Transfers through central counterparty clearing and settlement sometimes get rejected/delayed for absolutely no reason at all. They can also be rejected/delayed for political or other (good) reasons. BTC doesn't suffer from this.

3. Transfers through central counterparty clearing and settlement can get stolen by attacking the IT systems themselves. Example:https://www.bankinfosecurity.com/another-swift-hack-stole-12.... BTC doesn't suffer from this. Yes, BTC can get stolen through phishing or by attacking end-points, but so can those transfers.

4. Going through central counterparty clearing and settlement requires both the sending and the receiving party to have some type of bank account in the locations that they want to send or receive money to/from. This means dealing with very time consuming local bureaucracy. Especially when the receiving party (for example) wants to receive money in a "new" country that they're not "set up" in yet. Setting this up can take days/weeks of turn around time and hours/days of man-hours. BTC doesn't suffer from this at all.

5. Transfer costs and high exchange rate spreads.

There are probably more issues that I didn't think of.

As a traveler only dealing with relatively tiny amounts of money across borders, BTC has already saved me a ton of time, money and frustration in trying to access my own money across borders. Even I as a nobody can see the benefit, I imagine those benefits only get greater for people dealing with larger amounts (as I assume the bureaucracy and problems go up with the amount of money transferred).

Re: Digital Money Across Borders: Macro-Financial Implications

#47

Post by fuoqi »

janandonly wrote: post #3

We already have a digital Euro/Dollar/Yen, just look at the banking app on your phone or the transactions you do with a bank or credit card. But I'm very scared to see what those digital wallets for CBDC will turn into. If central banks get control over money flows they can do horrible stuff: * set a maximum limit on the amount of money you are allowed to have/save in your CBDC wallet. * give you an x amount of money…

>give you an x amount of money and force you to spend it. This will erode all incentive to save. If forces consumption instead of preservation.

Arguably money should not be used for savings in the first place. Some problems of the modern monetary system arise from the fact that money conflate two functions: medium for trade and tool for savings. After doing something useful for economy and acquiring money for it, you have two options: either you buy someone else's work or you invest somewhere (effectively you lend your useful contribution to someone). The first option is a relatively short-lived, think of money as a reputation system, you are more likely to care about a favor done days ago, not decades ago. Another way of looking on it is that it is easier to compare merit of deeds which were done close in time. But the second option has all the risks and difficulties associated with investments.

If you are interested in this topic, I recommend works of Silvio Gesell, it's somewhat outdated, but still quite interesting even in modern times.

Re: Digital Money Across Borders: Macro-Financial Implications

#48

Post by herendin »

andomar wrote: post #31
mikro2nd wrote: post #8

I find it interesting that the paper focusses on Central Bank Digital Currencies and Global Stablecoins, but pretends not to see/prefers not to deal with the elephant in the room - Bitcoin. If anything is a candidate for a potential Reserve Currency, BTC is it, imho. Deep in the footnotes comes the contorted logic," According to the IMF Treatment of Crypto Assets in Macroeconomic Statistics, crypto assets such as Bit…

If Central Banks were to get into Bitcoin, they would make early investors in Bitcoin very rich. Like 1 person would own 25% of all the world's wealth. That wouldn't be proper Central Banking :)

If that's true, then the longer they wait, the worse it gets. That's not good.

Re: Digital Money Across Borders: Macro-Financial Implications

#49

Post by bufferoverflow »

v4dok wrote: post #20

I was in many crypto presentations during the 2018 BTC rise. The crypto-anarchists (left and right leaning) were getting their spotlight and laying out their "dream". Basically an updated version of Kropotkin's and Bakunin's work for the blockchain-era. I really don't get what is the hate with the central banks getting control over the money. Yes they are not appointed by the Government but it does not matter, the mo…

> I really don't get what is the hate with the central banks getting control over the money

Because every single CB in the world devalues the currency they govern.

Bitcoin and other coins, on the other hand, are deflationary by design. Which means, while they can drop in value, they will not do so because somebody decided to turn the printer on and print a few trillion BTC. BTC is capped at 21 million coins. And some of it gets lost every day, so its cap is actually shrinking.

(not all cryptocurrencies are deflationary by design, in case I wasn't clear)

Re: Digital Money Across Borders: Macro-Financial Implications

#50

Post by raverbashing »

janoside wrote: post #40
raverbashing wrote: post #26

Earlier quoted context omitted.

What I love about the Bitcoin enthusiasts is how they picture it to be the be all/end all magical money that will solve everything Meanwhile the real big money-movers (legal or illegal) are still using bank accounts and paper companies in "business-friendly" jurisdictions.

The "market" is always active and always looking to select the best of everything, including money. Bitcoin isn't be-all/end-all magical money - but it is a massive, order-of-magnitude improvement on history's greatest "hard money" (gold). The markets of the world are slowly coming to understand the value of this "best reserve asset and best collateral asset ever seen" (Raoul Pal). A new digital, internet-native asse…

What you're saying applies to crypto-currencies in general, but not necessarily to Bitcoin, which has some thorny issues.

Yes, maybe the popularity of BTC will overcome the issues, but I doubt.

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