Why CBDCs will be ID-based
1–7 of 7 posts
Re: Why CBDCs will be ID-based
#2It's natural. KYC is already required for existing digital "currency" exchanges; linking digital bank accounts to digital IDs is an easy choice ( better than a manual and error prone checking of scanned documents).
I think a government monopoly with limitations ( enshrined in law protections, access for everyone, etc.) is drastically better than free for all private oligopolies ( like we have today with Visa/MasterCard).
Re: Why CBDCs will be ID-based
#3It's natural. KYC is already required for existing digital "currency" exchanges; linking digital bank accounts to digital IDs is an easy choice ( better than a manual and error prone checking of scanned documents). I think a government monopoly with limitations ( enshrined in law protections, access for everyone, etc.) is drastically better than free for all private oligopolies ( like we have today with Visa/MasterCa…
But KYC generally is not required for cash transactions. Why can't we have anonymous digital transactions, as long as they are size-capped and rate-limited ? How is sending $300 through that kind of CBDC system different from me handing $300 cash to my friend ? Is it that the CBDC just wouldn't have the "friction" that cash does, so any limits are evaded easily ?
Re: Why CBDCs will be ID-based
#4It's natural. KYC is already required for existing digital "currency" exchanges; linking digital bank accounts to digital IDs is an easy choice ( better than a manual and error prone checking of scanned documents). I think a government monopoly with limitations ( enshrined in law protections, access for everyone, etc.) is drastically better than free for all private oligopolies ( like we have today with Visa/MasterCa…
But KYC generally is not required for cash transactions. Why can't we have anonymous digital transactions, as long as they are size-capped and rate-limited ? How is sending $300 through that kind of CBDC system different from me handing $300 cash to my friend ? Is it that the CBDC just wouldn't have the "friction" that cash does, so any limits are evaded easily ?
> Why can't we have anonymous digital transactions
It makes law enforcement work.
Re: Why CBDCs will be ID-based
#5It's natural. KYC is already required for existing digital "currency" exchanges; linking digital bank accounts to digital IDs is an easy choice ( better than a manual and error prone checking of scanned documents). I think a government monopoly with limitations ( enshrined in law protections, access for everyone, etc.) is drastically better than free for all private oligopolies ( like we have today with Visa/MasterCa…
But KYC generally is not required for cash transactions. Why can't we have anonymous digital transactions, as long as they are size-capped and rate-limited ? How is sending $300 through that kind of CBDC system different from me handing $300 cash to my friend ? Is it that the CBDC just wouldn't have the "friction" that cash does, so any limits are evaded easily ?
If they're anonymous, what's stopping a bad actor from creating tons of accounts to circumvent limitations?
Cash is impractical, and on and offboarding of serious sums raises questions ( you can't easily withdraw or deposit massive amounts of cash without the bank asking questions/flagging transactions, and even if you could, transporting it is cumbersome).
Re: Why CBDCs will be ID-based
#6Earlier quoted context omitted.
But KYC generally is not required for cash transactions. Why can't we have anonymous digital transactions, as long as they are size-capped and rate-limited ? How is sending $300 through that kind of CBDC system different from me handing $300 cash to my friend ? Is it that the CBDC just wouldn't have the "friction" that cash does, so any limits are evaded easily ?
> Why can't we have anonymous digital transactions It makes law enforcement work.
But we have anonymous cash transactions, and somehow law enforcement still works.
Re: Why CBDCs will be ID-based
#7Earlier quoted context omitted.
But KYC generally is not required for cash transactions. Why can't we have anonymous digital transactions, as long as they are size-capped and rate-limited ? How is sending $300 through that kind of CBDC system different from me handing $300 cash to my friend ? Is it that the CBDC just wouldn't have the "friction" that cash does, so any limits are evaded easily ?
If they're anonymous, what's stopping a bad actor from creating tons of accounts to circumvent limitations? Cash is impractical, and on and offboarding of serious sums raises questions ( you can't easily withdraw or deposit massive amounts of cash without the bank asking questions/flagging transactions, and even if you could, transporting it is cumbersome).
Is there no good way to size-cap and rate-limit anonymous accounts ? Maybe not, if the bad guys slowly build up a large mesh of accounts and use bots that use lots of different IP addresses etc.