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Quelle horreur - has Mr Adams not noticed that that vast majority of financial transactions are completely digital, with all the risks that he details? Not bloc

Quelle horreur - has Mr Adams not noticed that that vast majority of financial transactions are completely digital, with all the risks that he details? Not blockchain (thank god) but every card debit/credit/charge transaction is performed entirely without notes,coin, or gold and is recorded and tracked with similar detail to blockchain ledgers.

ericd 5y ago
Sure, most transactions are digital already. This is about the removal of physical cash as an alternative, and the downsides that presents. Especially interesting is the sudden feasibility of negative interest rates enforced across the board, and the inability to just "keep cash" as an alternative.
- SubiculumCode 5y ago
  In terms of privacy, it IS possible. Look at Monero; but there it would be very very hard to get the government to accept a plan that included that level of privacy. I suppose that one may still have anonymous wallets, which could ensure a certain amount of anonymity absent requirements to the contrary. This whole phenomenon has the eerie likeness of Revelations, buying selling without a number, etc. Let's not intentionally make it come true guys.
- crazygringo 5y ago
  > This is about the removal of physical cash as an alternative No it's not. Nowhere in the article does it suggest that, nor is it being contemplated in any serious current policy proposals. It's about having digital cash transactions handled directly via government ledgers rather than via private intermediaries like MasterCard and Visa and PayPal. Which has all sorts of benefits. After all, money is a public good -- why should digital money be handled exclusively by private corporations making a profit off of it? If government is in charge of printing the physical money people use directly, it's pretty logically consistent for it also to be in charge of digital ledgers in some form as well. We don't let MasterCard and Visa print up their own hundred dollar bills, after all.
  - ericd 5y ago
    Partly basing it on other discussions around it: https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-interest-rates-work/ https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-nega... And yes, the article absolutely does mention it: "CBDC Public Policy Rationale Advocates of CBDCs suggest that they are necessary, certainly useful, in addressing multiple issues emerging across the global financial system of late. These issues include: ... Zero-lower bound interest rates (i.e., negative interest rates) – the existence of physical cash results in the severe curtailment of the ability of central banks to lower official interest rates below the zero bound (i.e., implement negative nominal interest rates) given the risk that citizens are likely to withdraw from the financial system by hoarding physical cash if negative nominal interest rates are implemented[12]. " If that's part of the rationale, what do you think is implied about the continuing existence of physical cash?
    - crazygringo 5y ago
      The article you're linking to explicitly talks about cash being preserved: > The proposal is for a central bank to divide the monetary base into two separate local currencies—cash and electronic money (e-money). E-money would be issued only electronically and would pay the policy rate of interest, and cash would have an exchange rate—the conversion rate—against e-money. This conversion rate is key to the proposal. So considering they're going to all the trouble of defining an exchange rate, what I think is implied about the continuing existence of physical cash is... that it will continue to exist. The goal here is very explicitly about making negative interest rates workable, not eliminating cash.
      - ericd 5y ago
        You’re right, the article I linked to is more about how to eliminate a pesky attribute of physical cash, not the physical manifestation itself (which I’m frankly less concerned with). My initial comment was mostly meant to be about the removal of physical cash as an alternative to something with a negative nominal yield, which a dual currency does accomplish, it would no longer be an alternative. But separately, I do think the eventual intention is to also get rid of the physical manifestation entirely, with a dual currency as a way to ease toward that.

ericd 5y ago

Sure, most transactions are digital already. This is about the removal of physical cash as an alternative, and the downsides that presents. Especially interesting is the sudden feasibility of negative interest rates enforced across the board, and the inability to just "keep cash" as an alternative.

SubiculumCode 5y ago
In terms of privacy, it IS possible. Look at Monero; but there it would be very very hard to get the government to accept a plan that included that level of privacy. I suppose that one may still have anonymous wallets, which could ensure a certain amount of anonymity absent requirements to the contrary. This whole phenomenon has the eerie likeness of Revelations, buying selling without a number, etc. Let's not intentionally make it come true guys.
crazygringo 5y ago
> This is about the removal of physical cash as an alternative No it's not. Nowhere in the article does it suggest that, nor is it being contemplated in any serious current policy proposals. It's about having digital cash transactions handled directly via government ledgers rather than via private intermediaries like MasterCard and Visa and PayPal. Which has all sorts of benefits. After all, money is a public good -- why should digital money be handled exclusively by private corporations making a profit off of it? If government is in charge of printing the physical money people use directly, it's pretty logically consistent for it also to be in charge of digital ledgers in some form as well. We don't let MasterCard and Visa print up their own hundred dollar bills, after all.
- ericd 5y ago
  Partly basing it on other discussions around it: https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-interest-rates-work/ https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-nega... And yes, the article absolutely does mention it: "CBDC Public Policy Rationale Advocates of CBDCs suggest that they are necessary, certainly useful, in addressing multiple issues emerging across the global financial system of late. These issues include: ... Zero-lower bound interest rates (i.e., negative interest rates) – the existence of physical cash results in the severe curtailment of the ability of central banks to lower official interest rates below the zero bound (i.e., implement negative nominal interest rates) given the risk that citizens are likely to withdraw from the financial system by hoarding physical cash if negative nominal interest rates are implemented[12]. " If that's part of the rationale, what do you think is implied about the continuing existence of physical cash?
  - crazygringo 5y ago
    The article you're linking to explicitly talks about cash being preserved: > The proposal is for a central bank to divide the monetary base into two separate local currencies—cash and electronic money (e-money). E-money would be issued only electronically and would pay the policy rate of interest, and cash would have an exchange rate—the conversion rate—against e-money. This conversion rate is key to the proposal. So considering they're going to all the trouble of defining an exchange rate, what I think is implied about the continuing existence of physical cash is... that it will continue to exist. The goal here is very explicitly about making negative interest rates workable, not eliminating cash.
    - ericd 5y ago
      You’re right, the article I linked to is more about how to eliminate a pesky attribute of physical cash, not the physical manifestation itself (which I’m frankly less concerned with). My initial comment was mostly meant to be about the removal of physical cash as an alternative to something with a negative nominal yield, which a dual currency does accomplish, it would no longer be an alternative. But separately, I do think the eventual intention is to also get rid of the physical manifestation entirely, with a dual currency as a way to ease toward that.