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Related to all of this, note, we may see in the not too distant future "deeply negative" interest rates. Currently, it is difficult to go much below zero becaus
by julienchastang 5y ago
Related to all of this, note, we may see in the not too distant future "deeply negative" interest rates. Currently, it is difficult to go much below zero because you can stash physical bank notes under your mattress and get a better rate of return (0% instead of -1). But in a cryptocurrency future, the mattress is not an option enabling central banks to go deeply negative (e.g., -5%). I just read a fascinating article in the WSJ about this topic: https://www.wsj.com/articles/digital-currencies-pave-way-for-deeply-negative-interest-rates-11631091581 https://www.wsj.com/articles/digital-currencies-pave-way-for...
- jbay808 5y agoYou can actually create negative interest paper bank notes without needing cryptocurrency. One example is stamp scrip, where one must pay a recurring fee to maintain the note's validity: https://en.m.wikipedia.org/wiki/Scrip#Stamp_scrip https://en.m.wikipedia.org/wiki/Scrip#Stamp_scrip
- californical 5y agoIsn’t that what we have inflation for though, essentially? It’s basically just an annual ~2% tax on cash (with some volatility)
- autosharp 5y agoThe central bank only sets interest rates directly, but not inflation.