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Why does there need to be a separate government issued digital currency? Presumably all of the private accounts that people are currently using are measured in

Why does there need to be a separate government issued digital currency? Presumably all of the private accounts that people are currently using are measured in Kr already, and the banks already operate at fractional reserve so the actual paper doesn't exist. As an American, I make about one cash purchase a year, but that doesn't mean that I'm not spending US Dollars. It seems to me that calling digital money "e-krona" will change exactly nothing but nomenclature.

ersiees 8y ago
It changes the value fluctuations. Right now the biggest problem with using crypto as your day to day money is that you cannot trust the money that you put into crypto to stay at the same value over time + transactions are slow.
- hk__2 8y ago
  > Right now the biggest problem with using crypto as your day to day money is that you cannot trust the money that you put into crypto to stay at the same value over time Isn’t that a problem you have with any currency?
  - SilasX 8y ago
    Existing, non-crypto currencies don’t have that problem, mainly because of inertia: so many people are using it that exchange rates don’t affect ordinary prices denominated in the currency. When a cryptocurrency has such adoption, the volatility problem will go away too.
    - jonex 8y ago
      It isn't just inertia, there's also decades to centuries of developments in currencies with stability being one of the core goals. There are also plenty of examples of the system failing when current best practices weren't followed, even when adoption has been high. The authorities behind the most popular crypto currencies today doesn't seem to be aiming for stability as a primary goal. The currencies would not be very meaningful as instruments for speculation if they were, which probably is the reason why stable cryptocurrencies aren't as popular.
gnomewascool 8y ago
Part of the point is that if physical cash were withdrawn then you would _have_ to depend on some private (i.e. non-government) third-party for your financial transactions. (Obviously you could claim that you already are dependent on them, but there's a difference between a de facto and a de iure dependence.)
clintonb 8y ago
> The development raises some crucial issues regarding the state’s role in the payment market. For hundreds of years, the public has been offered central bank notes and coins. If cash stops working, it would leave all individuals to rely on the private sector alone to get access to money and payment methods. This would be a historical change without precedence. Norway is seeing a similar trend, and the two central banks are cooperating in this area. In the Eurozone, cash is still used to a high degree. The value of the outstanding amount of cash is equivalent to 10% of the Eurozone GDP, versus the Swedish equivalent of only 1%. A government system ideally guarantees access to every citizen/entity desiring to possess "cash". A system run by a private entity doesn't have to do so. If you don't agree/fall out of compliance with the terms of service of a private system, you can be banned. The same can be done on a government system, but at least you have the option of court intervention and voting people into/out of office.
- pishpash 8y ago
  Private entities can be regulated to the same effect on the matter of access.
  - vfclists 8y ago
    But are they?
  - FabHK 8y ago
    As the article discusses: > One option is to do nothing, meaning we accept that the general public no longer has access to central bank money. Such a future would imply a changed scope for the public sector. The payment market would have to be regulated and supervised in new ways to meet fulfil the objective to have a safe, efficient and inclusive payment market. > A second alternative is to issue central bank money in a digital form, as a complement to cash and the money held in bank accounts.
- deleted 8y ago
  [deleted]
unwind 8y ago
How many checks do you use (write or receive)?
martin-adams 8y ago
It sounds to me that there needs to be a government version of VISA or MasterCard and legislate that all retailers accept that if they do no accept cash. Then anyone should be entitled to have access to the new payment type as they would have access to cash.
alkonaut 8y ago
I want to be able to move my swedish currecy around without relying on visa/MasterCard and preferably not even banks. One solution is simply charging cards like public transit cards instead of using credit cards which are connected to an account. That’s where a cryptocurrency is needed.
- clintonb 8y ago
  Your public transit card is connected to an account. In this case the transit agency acts as the bank.
  - alkonaut 8y ago
    Exactly my point: if you only take the first and much easier step of a centralized ledger then you have done what public transit cards do. They don’t actually charge the tokens onto the cards, instead they just set the balance of the card id to the charged amount in a central database. The novel and more difficult step would be to charge the actual cryptocurrency tokens to a card, which could then be spent anonymously without contacting a central ledger. Why we “need a cryptocurrency” is because otherwise we have just let the central bank take the role of commercial banks and credit card companies. Perhaps not a bad thing in itself but not the full potential.

ersiees 8y ago

It changes the value fluctuations. Right now the biggest problem with using crypto as your day to day money is that you cannot trust the money that you put into crypto to stay at the same value over time + transactions are slow.

hk__2 8y ago
> Right now the biggest problem with using crypto as your day to day money is that you cannot trust the money that you put into crypto to stay at the same value over time Isn’t that a problem you have with any currency?
- SilasX 8y ago
  Existing, non-crypto currencies don’t have that problem, mainly because of inertia: so many people are using it that exchange rates don’t affect ordinary prices denominated in the currency. When a cryptocurrency has such adoption, the volatility problem will go away too.
  - jonex 8y ago
    It isn't just inertia, there's also decades to centuries of developments in currencies with stability being one of the core goals. There are also plenty of examples of the system failing when current best practices weren't followed, even when adoption has been high. The authorities behind the most popular crypto currencies today doesn't seem to be aiming for stability as a primary goal. The currencies would not be very meaningful as instruments for speculation if they were, which probably is the reason why stable cryptocurrencies aren't as popular.

gnomewascool 8y ago

Part of the point is that if physical cash were withdrawn then you would _have_ to depend on some private (i.e. non-government) third-party for your financial transactions. (Obviously you could claim that you already are dependent on them, but there's a difference between a de facto and a de iure dependence.)

clintonb 8y ago

> The development raises some crucial issues regarding the state’s role in the payment market. For hundreds of years, the public has been offered central bank notes and coins. If cash stops working, it would leave all individuals to rely on the private sector alone to get access to money and payment methods. This would be a historical change without precedence. Norway is seeing a similar trend, and the two central banks are cooperating in this area. In the Eurozone, cash is still used to a high degree. The value of the outstanding amount of cash is equivalent to 10% of the Eurozone GDP, versus the Swedish equivalent of only 1%. A government system ideally guarantees access to every citizen/entity desiring to possess "cash". A system run by a private entity doesn't have to do so. If you don't agree/fall out of compliance with the terms of service of a private system, you can be banned. The same can be done on a government system, but at least you have the option of court intervention and voting people into/out of office.

pishpash 8y ago
Private entities can be regulated to the same effect on the matter of access.
- vfclists 8y ago
  But are they?
- FabHK 8y ago
  As the article discusses: > One option is to do nothing, meaning we accept that the general public no longer has access to central bank money. Such a future would imply a changed scope for the public sector. The payment market would have to be regulated and supervised in new ways to meet fulfil the objective to have a safe, efficient and inclusive payment market. > A second alternative is to issue central bank money in a digital form, as a complement to cash and the money held in bank accounts.
deleted 8y ago
[deleted]

unwind 8y ago

How many checks do you use (write or receive)?

martin-adams 8y ago

It sounds to me that there needs to be a government version of VISA or MasterCard and legislate that all retailers accept that if they do no accept cash. Then anyone should be entitled to have access to the new payment type as they would have access to cash.

alkonaut 8y ago

I want to be able to move my swedish currecy around without relying on visa/MasterCard and preferably not even banks. One solution is simply charging cards like public transit cards instead of using credit cards which are connected to an account. That’s where a cryptocurrency is needed.

clintonb 8y ago
Your public transit card is connected to an account. In this case the transit agency acts as the bank.
- alkonaut 8y ago
  Exactly my point: if you only take the first and much easier step of a centralized ledger then you have done what public transit cards do. They don’t actually charge the tokens onto the cards, instead they just set the balance of the card id to the charged amount in a central database. The novel and more difficult step would be to charge the actual cryptocurrency tokens to a card, which could then be spent anonymously without contacting a central ledger. Why we “need a cryptocurrency” is because otherwise we have just let the central bank take the role of commercial banks and credit card companies. Perhaps not a bad thing in itself but not the full potential.