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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 ac

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

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