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Lesson one: Payment processors are taxing bodies. The degree to which your society operates without cash is the degree to which your governing bodies lose all

Lesson one: Payment processors are taxing bodies. The degree to which your society operates without cash is the degree to which your governing bodies lose all control over the supply of money in your nation. Value of your currency is handed over to payment processors who do little beside moving numbers from place to place, and charge a percentage cut of every such movement on the fictional basis of moving larger numbers somehow costing more or being a harder service to provide. Should the payment processors wish your currency to be in greater supply, they will lower their rates. Should they wish to restrict the supply of money, they will raise them. Their influence is more flexible and has many fewer restrictions than stodgy old things like 'central banks'.

coldcode 9y ago
So a digital Fed. Who says a government can't regulate the payment processor?
- otakucode 9y ago
  They certainly could. And I would argue that in the USA right now they absolutely should. If not providing a modernized federal ACH system that can handle realtime funds transfers, then at least by absolutely and criminally forbidding charging a fee which scales based upon the amount of money changing hands (a small flat fee would be warranted, the problem is that they charge more just because the numbers are bigger which is nonsensical, we're not talking about them extending credit or doing the liability hot potato that credit card transactions are, this is just pure transferring from one account to another). Ideally the government would establish their own cryptocurrency, but I think that ship has sailed. Society in general has accepted that the standards of cash - anonymity, non-traceability, non-freezability, etc - are simply too dangerous to trust people with.
sifar 9y ago
This. I wonder if the proponents of digitization realize this at all. Do the government policy makers/central banks realize that in their drive to digitize transactions to make them traceable, they are ceding some power to these payment processors.

coldcode 9y ago

So a digital Fed. Who says a government can't regulate the payment processor?

otakucode 9y ago
They certainly could. And I would argue that in the USA right now they absolutely should. If not providing a modernized federal ACH system that can handle realtime funds transfers, then at least by absolutely and criminally forbidding charging a fee which scales based upon the amount of money changing hands (a small flat fee would be warranted, the problem is that they charge more just because the numbers are bigger which is nonsensical, we're not talking about them extending credit or doing the liability hot potato that credit card transactions are, this is just pure transferring from one account to another). Ideally the government would establish their own cryptocurrency, but I think that ship has sailed. Society in general has accepted that the standards of cash - anonymity, non-traceability, non-freezability, etc - are simply too dangerous to trust people with.

sifar 9y ago

This. I wonder if the proponents of digitization realize this at all. Do the government policy makers/central banks realize that in their drive to digitize transactions to make them traceable, they are ceding some power to these payment processors.