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Bank of England to explore a potential Central Bank Digital Currency

bankofengland.co.uk

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Re: Bank of England to explore a potential Central Bank Digital Currency

#61

Post by dools »

aseerdbnarng wrote: post #58

What I believe the BOE is exploring is for each citizen to have an account with the BOE and the potential for the types of money that can be used in this parallel banking system. If we think of the financial system as plumbing, the central bank has direct pipes to banks but rarely to citizens. This is not usually a problem except when you need to do a big emergency stimulus push not having direct pipes to individuals…

The government doesn’t need everyone to have an account at the central bank in order to deposit money directly into their account.

QE doesn’t stimulate the economy because bonds and reserves are functionally identical as far as bank capital requirements are concerned and reducing interest rate payments is deflationary.

Re: Bank of England to explore a potential Central Bank Digital Currency

#62

Post by dools »

KaiserPro wrote: post #30

I've not really understood the need for a "digital" pound, the pound is pretty digital already. I can already have an entirely digital bank account from at least three "challenger" banks. There are also now at least two business accounts that also entirely virtual. "Faster Payments" (customer bank transfers) are delivered in seconds. I can see a need for speeding up BACS, and reducing the price of CHAPS, but apart fr…

The important distinction is that currently all cashless payment systems are privately run for profit which is effectively a regressive transaction tax.

Re: Bank of England to explore a potential Central Bank Digital Currency

#63

Post by KaiserPro »

bitcoinmonger wrote: post #54
KaiserPro wrote: post #49

Earlier quoted context omitted.

> Proof of work can be replaced by physical security, which is more energy efficient. I'm not sure you understand how banking works. The BoE already has a ledger, its just private[1] for a number of reason (the banks accounts are published, but not in real time, and not by individual account). All banks have ledgers, and sometimes they even marry up. [1]well kind of.

What would happen if you walked in to their server room and tried to update their database to reverse a payment?

You would be politely asked why you were in a restricted area, and asked to leave.

Currency is based on trust. Trust that the ledger is correct, auditable and matches up.

but to address your question, its possible to unilaterally reverse a payment, but as you'll then have to tell the clearing house to reverse the transaction, you'll need to get authorization from thirdparty, which is tricky. Moving money around inside a bank though is probably much easier.

However you're far better off just running a limited company and offering loans, that's a far easier way commit fraud.

Re: Bank of England to explore a potential Central Bank Digital Currency

#64

Post by veltas »

oblio wrote: post #29
zelphirkalt wrote: post #15

Earlier quoted context omitted.

While in general quite confusing, I cannot help but notice, that they used to use better divisible numbers like 12, to go to the next bigger unit. I also read that Babylonians or whoever it was, used a system with base 60, even better divisible. I wonder how it would affect our daily lives, if we still had such better divisible numbers in use with money today. For example 60 cent make a euro or dollar or whatever. Of…

The problem is not a micro-optimization such as using base 10 or base 12. The problem is that we can't all agree on a common measurement system and the biggest economy in the world stubbornly keeps using an archaic and sub-optimal system that it's actively pushing onto the rest of us. For example, instead of having screen details in sqcm (and aspect ratios), we have inches (and maaaaybe aspect rations mentioned somew…

Historically, metric was the thing being pushed.

Re: Bank of England to explore a potential Central Bank Digital Currency

#65

Post by casi18 »

disruptalot wrote: post #35
NicoJuicy wrote: post #24

Earlier quoted context omitted.

This just shows that blockchain is a good technology. But that bitcoin is just an implementation waiting to become obsolete.

I've been hearing this for 10 years straight. Thus far the only successful examples of Blockchain technology have been based on digital currencies and Bitcoin has done nothing but continue it's success. On the other hand, there is not one example of "Blockchain technology" put to work on anything that needed it.

I now barely use my bank account, i get paid in dai, i pay others in dai. occasionally i have to move dai into fiat for bills. hopefully these central bank digital currencies help bridge that last step.

i love it because i can write programs to move my money around. I can stream payments with https://sablier.finance i can lend and borrow with https://aave.com I get paid universal basic income each hour from https://www.proofofhumanity.id I use https://yearn.finance/ and https://app.pooltogether.com/ as my savings accounts.

I can take a loan against my collateral with https://alchemix.fi/ to buy things irl. I have a https://monolith.xyz/ visa card to pay for things with my crypto (until bridges arrive).

I can organise with others in https://app.daohaus.club/ and vote in https://snapshot.org/

At what point have we satisfied your criteria for making something useful and successful? I use it everyday, it works great for me.

(all of the above is just a small set of projects on ethereum)

Re: Bank of England to explore a potential Central Bank Digital Currency

#66

Post by dools »

bitcoinmonger wrote: post #42
Nursie wrote: post #14

Earlier quoted context omitted.

Just no. Hard money is not desirable. Whatever comes out of this "the country's money supply should be determined by some cryptobros" is not going to be the result.

Agreed. The money supply should be flexible to help alleviate the effects of inevitable financial crashes. This of course devalues the savings of the average person when this happens, but it's the only way to recover from mistakes like the mortgage bubble.

Inflation is almost never caused by government spending. It’s caused by regulatory policy that allows, for example, bubbles in real estate or by external shocks like oil and so on. The whole “fiscal policy will debase the currency” thing is blown way out of proportion. I should also point out that there are much better financial instruments than cash to hold long term savings and they’re being made ever more accessible.

The benefit of a government supplied digital currency is a payment system that isn’t run for profit.

Re: Bank of England to explore a potential Central Bank Digital Currency

#67

Post by disruptalot »

NicoJuicy wrote: post #47
disruptalot wrote: post #35

Earlier quoted context omitted.

I've been hearing this for 10 years straight. Thus far the only successful examples of Blockchain technology have been based on digital currencies and Bitcoin has done nothing but continue it's success. On the other hand, there is not one example of "Blockchain technology" put to work on anything that needed it.

We use blockchain at work ( not by me). It's not because you haven't seen it in public, that it isn't used. Also: https://www.fnality.org/home which the bank of england ( mentioned in the article) is a member of to settle between banks. I also wouldn't see bitcoin as a success. No one that i know of uses it in daily life ( except some being hyped by it and HODL'ing it)

"Blockchain" is close to useless unless it is coupled with being public, permissionless, borderless among other things. The companies that jumped on this "Blockchain" "DLT" nonsense bandwagon to this day do not understand any of the fundamentals. Just using a distributed ledger does not provide any benefits that they try to borrow from likes of Bitcoin. Distributed ledgers have existed for decades.

Anyone that holds bitcoin is using it everyday as a store of value. It's unnecessary to go into all the reasons Bitcoin makes sense in this thread, plenty of resource out there. Suffice to say that by any measure, market determined or otherwise, Bitcoin's usage has constantly (or even exponentially) increased since inception. Either this hoard of people are getting more and more wrong every year, or perhaps you're looking at it from the wrong angle.

Re: Bank of England to explore a potential Central Bank Digital Currency

#68

Post by leg100 »

codeulike wrote: post #8

They should make it work on the 'old money' system of penny, shilling and pound, with twelve pence to a shilling and twenty shillings to the pound, then use the abbreviation 'd' for pence, and then throw in farthings (quarter penny) and half-crowns (two shillings and six pence) because if there's one thing I've learnt about finance, its that the more confusing things are, the easier it is to make a profit.

Don't forget the guinea: equal to a pound and a shilling, or 21 shillings, for the purposes of bidding for a racehorse.

Re: Bank of England to explore a potential Central Bank Digital Currency

#69

Post by mytailorisrich »

KaiserPro wrote: post #57
mytailorisrich wrote: post #48

Earlier quoted context omitted.

Currency is not digital. What they mean by "digital currency" is a for instance a purely digital bank note than you can hold and transfer to someone else (like for instance a crypto token). Clearly that's not how things work now. Edit: See my further comment below as it looks like people don't quite understand what "digital currency" is.

That's literally how the BoE works. when you do a bank transfer, do you think they physical cash? When the BoE does quantitative easing, they don't actually print money[1], they just "transfer" money to banks who then do "things" with it. Its literally just numbers in a DB. [1] handling physical cash is expensive, slow and difficult. Not only is the price of movement relatively static regardless of the value, you hav…

> That's literally how the BoE works

Not, it's not.

It seems you and others are confused here and do not understand what is meant by "digital currency".

Digital currencies, like what is discussed and e.g. the "digital yuan" in China, it to create real digital bank notes / coins. Not expert by I think similar to a crypto token.

It means I can hold a digital bank note and pay you by transferring it to you.

This is very different to the current system in which I instruct my bank to do something and to balance with the recipient's bank.

Depending how this is implemented it can be anonymous like physical bank notes, or it can be tracked and plenty of other things also become possible. It also does not require me to interact with my bank.

Re: Bank of England to explore a potential Central Bank Digital Currency

#70

Post by LatteLazy »

Broken_Hippo wrote: post #52
veritascap wrote: post #41

Earlier quoted context omitted.

The reason for a CBDC are new features. Money that can be programmed to only be used in certain ways, with certain groups, or at certain times, e.g. expiring money. It’s more nudging power for our unelected technocrat dear leaders. Imagine the possibilities!

So, less functional money? More complicated gift card?

I think it's more like making negative interest rates or a wealth tax unavoidable...

/TinFoilHat

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