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These CBDS dont shift power it just makes things faster on a technical level because they can be moved p2p. Its central controlled but it doesn't need the centr

• reedjosh 5y ago
  It completely removes privacy that physical cash allows. It also allows for a true negative inflation rate. Imagine being unable to remove your cash from an account that earns negative interest. Digital currency enables this. And _does_ massively shift power away from the individual.
  • kqr 5y ago
    Wait, why would digital currency remove physical bank notes? They could still exists, just be liabilities of the central bank rather than private banks, right?
    • headmelted 5y ago
      The thinking is that as we’re rapidly going cashless anyway, the existing inventory of cash will diminish as it’s banked and removed from circulation. This is happening already, but is expected to accelerate over the next few years.
      • kqr 5y ago
        I agree completely (and for the record I think that's awful -- I've switched to the only bank left in my country that still deals with bank notes) but that's a problem regardless of the status of CBDC as far as I can tell.
    • razius 5y ago
      It's forbidden by law to carry or pay with more than a very small amount of cash, that plus very high fees for depositing or taking out cash.
  • headmelted 5y ago
    This. That said, and I know I’m going to get hassle for this, I’m still struggling to be against it (as long as I’m still able to spend the money on other assets as it’s obtained - on the basis that the government can’t freeze what isn’t there). There are whole classes of crimes (financial and otherwise) that this would make completely infeasible.
    • ballenf 5y ago
      And just think of all the things that will be turned into crimes once people lose the ability to rebel. Cash is a check on centralized power. An important one.
  • razius 5y ago
    It's so much more: "The money itself is programmable. Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jump start." https://www.wsj.com/articles/china-creates-its-own-digital-currency-a-first-for-major-economy-11617634118 https://www.wsj.com/articles/china-creates-its-own-digital-c...
  • trompetenaccoun 5y ago
    This isn't true. Firstly in a totalitarian state they can already freeze your assets at will. Chinese banks regularly do this and there's nothing the victims can do about it. Secondly, although unlikely that states will do so, it's perfectly possible to design CBDC to be privacy preserving. What digital central bank money actually does is shift power from private banks to the central bank. It also gives those who want to hold large sums of cash more security as they will be able to directly hold the actual currency instead of private bank credit money which is uninsured at large sums.
    • bob33212 5y ago
      The freedom that will be provided by a "decentralized database" is commonly overestimated by pro crypto crowd. It is true that the government cannot edit the ledger. But they can take your things and put you in jail.
    • ngcc_hk 5y ago
      You can still sort if using paper or gold or Bitcoin especially if many have relatives outside of the system. But if the all economical activities are in the central bank I am not sure you can have the private part of all these non-government activities. Not to mention mining the details of your transactions are so much easier and social credit system is so much enforceable. The article mentioned of Norway is a good case illustrated someone beyond this line of thinking. But once the central Gov can control all, can even democracy survived one wonder. The decentralised part is the key assumption in democracy.
      • lottin 5y ago
        What? Democracy is predicated on the consent of the governed, and the accountability of public institutions, not decentralisation.
      • trompetenaccoun 5y ago
        It's all a question of politics. Based on what I see there is no doubt that digital currencies are coming. Governments are not going to just give up their currency monopoly, so the only logical consequence is central bank digital currency. But how will it be implemented, that's the question. Digital cash is perfectly feasible, just look at something like Monero. They could build in a central bank fiat lever if they want to, so that they can inflate at will, while still preserving privacy, security, and accountability. Will this happen? I doubt it. Because the trend goes to ever more authoritarianism. But it could be easily implemented if there were a will to do so. And again, we don't need digital currency for the government to turn against the citizen, many governments around the word manage perfectly fine without it already. Private banking isn't immune to the law. Instead of being scared of regulation, the citizens should lobby for the right regulation. The current financial system already discriminates against us and only aids the wealthy.
  • exceptione 5y ago
    "It also allows for a true negative inflation rate. Imagine being unable to remove your cash from an account that earns negative interest." Negative inflation is deflation, so you money is getting worth more. From a consumer point of view that would be a win.
    • imtringued 5y ago
      From a consumer point of view it is a win, but you have to earn the money in the first place and that means over time your employer will have to cut your wages in nominal terms, because your real wage is going up year by year. Employers would demand deflation adjusted wages or just fire their overpaid employees. Deflation is also a win for people who have inherited their wealth a long time ago, because they have to do absolutely nothing to protect their wealth. It's basically rent seeking but this time it is with money. There is another problem, the real value of debt grows over time, which makes it harder to repay debts. However, I will admit one thing, occasional deflation spikes are not a bad thing, if they are followed by inflation that meets the 2% target.
    • Infernal 5y ago
      I believe this was just a typo, or a braino - from the context I assume the author meant a "true negative interest rate".
      • lozf 5y ago
        Right, a case of use it (potentially only at approved retailers / service providers) or lose it (your stash depletes as you "save" it).
        • reedjosh 5y ago
          And there's no reason unspent money couldn't just become a tax. So, a negative interest rate from your perspective, but a revenue stream to govs. At that point, good luck ever having enough sovereignty to retire unless the Gov sanctions it.
  • lozf 5y ago
    Don't forget censorship -- the ability to restrict people to only spending their UBI / "benefits" only at (e.g.) approved food and clothing retailers.
  • noxer 5y ago
    Physical cash isn't replaced by CBDCs so it can not removed anything from physical cash. >It also allows for a true negative inflation rate. Already possible and has nothing to do with CBDCs >Digital currency enables this. And _does_ massively shift power away from the individual. No, you are completely misinformed what these CBDCs actually are and do. It simply a central bank "dollar" that isn't tied to an account at the central bank. So 2 banks can transact them between each-other without the need to change balances of their central bank account (balance sheet). Its p2p fiat. Issued by a central bank but does not need the central bank in between every transaction. It reduces fiction in the technical system. Its purely technical it has zero effect on how people use money or whos in power. (the issuer has the controller/power which is still the central bank) CBDCs Explained: https://cinnamon.video/embed?v=557927432749843622 https://cinnamon.video/embed?v=557927432749843622
• legutierr 5y ago
  With CBDCs available to consumers, why would any normal person open a bank account? Most people have bank accounts in order to receive and make payments electronically. Most people (and many businesses) pay for this privilege through high fees; at best, they receive paltry or no interest. CBDCs, if widely adopted, will drain most (if not all) banks of deposits, and thereby trigger a banking crisis. Either that, or banks will have to immediately cut fees and start paying meaningful interest, which will make many banks unprofitable, instigating a banking crisis. Given that many central banks are prudential regulators of commercial banks, and are tasked with preventing banking crises, it seems very unlikely to me that CBDCs will be released to consumers. Not because they wouldn’t be revolutionary, but because they would be too revolutionary.
  • kwere 5y ago
    Italian perspective here: deposit and checking accounts are in europe a nuisance in the actual monetary system, getting them replaced would not ruin big banks, smaller ones will probably fell it.
    • legutierr 5y ago
      Are you saying that banks in Europe would prefer not to accept any deposits at all? In the US, banks do often try to justify high fees by pointing to the relatively high cost of administering small accounts. But those accounts are still profitable for the banks because of the fees—they don't actually want to give up that revenue. And CBDCs don't just threaten banks' consumer banking business. Although my previous comment was focused primarily on consumer account holders, similar incentives exist for businesses. Any business that has bank account balances in excess of the FDIC insured amount is extending credit to its bank. Yes, banks tend to be trustworthy, but the 2008 crisis showed us that even the largest institutions can fail, and then you are just hoping that the US government stands up and covers more than what the FDIC is obligated to. As a business owner, it wouldn't be a difficult decision to shift all my bank balances over to CBDCs, provided that the physical security and anti-fraud risk could be sufficiently covered. I would much rather have 100% of my risk exposure be to the US government, rather than to a bank that may or may not be backed by the US government if the shit hits the fan. Banks today are unable to offer interest rates that would compensate for that risk differential. I am also confident that a CBDC would be easier to use and more flexible from a user experience perspective than my bank's current systems. All this is to say that we would all hear a giant sucking sound emanating from banks' balance sheets if CBDCs were introduced, not only because people would be closing their consumer accounts, but also because businesses would be withdrawing funds from their business accounts. Yes, there are accommodations and affordances that can be made to keep the banks in the game somehow, and there are "bank-like" roles to be filled in a crypto economy. However, banks today would find it difficult and disruptive to make that shift, and many wouldn't be able to make that shift at all. Banks would go out of business. Big banks would go out of business, and that is the last thing that any central banker wants to have happen. The fact that by introducing a CBDC a central bank itself would be the direct cause of bank failures makes the whole concept quite dubious, in my mind.