10 ms·

Japan to implement bank-deposit-backed digital currency in 2022

sleepysysadmin 5y ago
This is related to yesterdays: https://news.ycombinator.com/item?id=29312300 https://news.ycombinator.com/item?id=29312300 Japan is on the verge of economic collapse. Negative interest rates, major deflation during all of covid. Barely pulling out of deflation and trending back downwards. https://tradingeconomics.com/japan/inflation-cpi https://tradingeconomics.com/japan/inflation-cpi Japan is in deflationary spiral due to high taxes and tremendous debt. Deficit spending to temporarily pull themselves out of deflation and recession will only makes things worse in the long term.
- roywiggins 5y ago
  I dunno, they've been stumbling through deflation for 30 years now, why not expect them to keep muddling through? https://en.m.wikipedia.org/wiki/Lost_Decades https://en.m.wikipedia.org/wiki/Lost_Decades
- jbay808 5y ago
  Is there some reason why a country experiencing deflation can't print money and hand it out to voters until inflation returns?
  - ionwake 5y ago
    I think the person you replied to got confused - Japan is experiencing a severe collapse and suffering from inflation in most asset classes.
  - DennisP 5y ago
    In theory, they could. In practice, the typical way to "print money" is to do things like lower interest rates (incentivizing more borrowing, which increases the money in circulation) and lowering bank reserve requirements (letting them loan more in proportion to their reserves). Both depend on people voluntarily taking out loans, which they might avoid if they're pessimistic about the economy or expect deflation.
    - starfallg 5y ago
      Good summary but slightly out of date. What they rely on now is QE, with the central bank buying assets from banks to free up money for investment. Ends up similar to lowering reserve requirements, but without the drawbacks of lowering reserve requirements. Japan is dealing with it by massive infra projects like the new maglev Shinkansen. So when we are talking about loans, we aren't just talking about consumer credit, although that can be a major component in a consumption-led economy.
    - jbay808 5y ago
      That's why I was wondering about not doing that, and literally minting new cash and using handouts / UBI instead. We can't expect people to borrow money to spend on consumption, even at low interest rates, because they'll be worried about paying it back. No wonder they always just put it into asset purchases. Give them the money no strings attached and they'll spend it. Normally the downside to that is inflation, but since that's the goal anyway it seems like a win-win.
      - DennisP 5y ago
        Makes sense to me.
    - jollybean 5y ago
      Supply Side vs. Demand Side very different though. Poor people buying stuff they 'need' is different than coaxing businesses to invest more broadly with slightly cheaper loans but with the demographic decline still on their daily charts.
  - seibelj 5y ago
    Japan is a very rigid economy where doing things a bureaucratic, traditional way is prized and new innovations are difficult and slow. They have low immigration and culturally non-Japanese cannot assimilate fully. Their birth rate is low, they can't replace population with immigrants, and an ever increasing percentage of those who are alive are old, no longer productive / contributing to the economy, and spending money on end-of-life things in retirement. No matter how much money they print, it can't solve for an economy where there are fewer consumers and producers every year.
    - jbay808 5y ago
      I think the Bank of Japan might be more innovative than you give them credit for, seeing as how they were the first to deploy almost all of today's unconventional policies, including QE itself. A low birth rate also is certainly not some immutable characteristic of Japanese culture; they had very high birth rates through most of the 20th century. It's clearly the result of economic circumstances and incentives, like the high cost of childcare and long working hours. These do seem like things that government and monetary policy cannot control directly but can certainly influence. In some respect the low birth rate might be both a cause of deflation itself and also a result. Lastly, > No matter how much money they print, it can't solve for an economy where there are fewer consumers and producers every year. It might not solve the economy, but speaking strictly of inflation, it doesn't seem imaginable that no matter how much money they print it won't create inflation. They must just be printing the wrong kind of money. (As this economist explains, there are indeed different kinds: https://youtu.be/4xgHbW2A9KE https://youtu.be/4xgHbW2A9KE )
  - sleepysysadmin 5y ago
    >Is there some reason why a country experiencing deflation can't print money and hand it out to voters until inflation returns? That's a great question. Japan has been doing this for about a decade. Shinzo Abe kind of called it abenomics; aka quantative easing. https://en.wikipedia.org/wiki/Abenomics https://en.wikipedia.org/wiki/Abenomics It has worked, no question, effectively exactly as you propose. The problem is that it clearly didn't solve the problem. While also creating new problems and since the original problem never gets solved, when you are forced to cut spending because the cost of debt has become too crippling. You retain all the new problems and now feel the old problems. https://tradingeconomics.com/japan/government-spending-to-gdp https://tradingeconomics.com/japan/government-spending-to-gd... https://tradingeconomics.com/japan/government-debt-to-gdp https://tradingeconomics.com/japan/government-debt-to-gdp 266% debt to gdp is about 24% higher than the peak drama about Greece's collapse. https://tradingeconomics.com/japan/government-budget https://tradingeconomics.com/japan/government-budget Haven't balanced their budget since the 1990s. Tough decisions coming for Japan.
    - NovemberWhiskey 5y ago
      The big difference vs. Greece is that ~90% of all Japanese government bonds are held domestically.
      - hogFeast 5y ago
        They also have substantial foreign assets that can be sold. The situation in Japan is very unusual because the financial system has a massive synthetic net short JPY position. Because rates are so low, savings have been effectively dollarized in an economy that isn't dollarized (this is why USD/JPY is so correlated with rate differentials)...so I don't think anyone really knows how this will works out (there aren't a lot of historical examples, no country that held so many claims denominated in a foreign currency has been such a large part of the world economy...this is the end game of the export-oriented, mercantilist political economy...Germany is a ways down the same road). It makes no difference whatsoever that JGBs are held domestically in practice because it is harder to push through a debt restructuring politically when voters are the ones losing money (you have seen this in Italy too, they have "bailed in" domestic savers which has significantly reduced their options...if the debt is owned by foreign investors, you can usually restructure and point at them: look at these greedy capitalists, terrible...but we have no choice). On some of the other stuff mentioned above, the reason why Japan is in such a mess is because their financial/corporate sectors is totally screwed. There is no real demand for money, corporate balance sheets are loaded down with cash, no-one wants to invest, demand for money is so low that Japan's savings banks are huge players in US corporate lending, banks seem to have no actual capacity to make corporate loans...they don't know how, they just buy US bonds and call it a day, monetary policy (counter-intuitively) is making this worse, it is reducing the supply of "safe assets" but hasn't increased the capacity of institutions for "non-safe assets", it has led to a significant reduction in lending within Japan because rates overseas are so much higher...it is a real shit storm, but it all comes down to monetary policy officials not understanding money transmission (unusually for Japan, in the 1980s the govt was involved in directing lending on a loan-by-loan basis so they have a history of real control over monetary transmission).
  - whytaka 5y ago
    If they were giving it out unevenly it would be unjust. If they were giving it bout evenly, there’d be no difference. Nominally, the price of goods would increase but so would your reserve. So there’be no added incentive to buy.
    - jbay808 5y ago
      Helicopter money is not like a stock split, because you aren't handing it out in proportion to how much money people already have. When prices go up it certainly creates an incentive to spend your savings, even if you're getting new money to offset the costs.
- Psillisp 5y ago
  This feels like the hallmarks of a system that over values 'hard work' but doesn't value entrepreneurship or risk taking. Corporate rent seeking is proper up by a strong welfare state. "Herein lies the unique twist that Piketty’s theory takes on in Japan: the disparity is not so much between the super-rich and everyone else, but between large corporations, which can retain earnings and accumulate capital, and the individuals who are being squeezed in the process." https://www.weforum.org/agenda/2015/03/why-inequality-is-different-in-japan/ https://www.weforum.org/agenda/2015/03/why-inequality-is-dif...
m3kw9 5y ago
I’m just confused about this. Isn’t most money system digitized already? When we buy stuff online it is indistinguishable from digital money, and the bank as far as they are concerned is seeing numbers on a screen from a database, which is backed by fractional deposits.
- rich_sasha 5y ago
  Central bank digital money normally means normal bank account but held directly with the central bank
- deleted 5y ago
  [deleted]
- Kaytaro 5y ago
  Yes, the only difference is this currency will be on a blockchain. Although I'm assuming it will be completely centralized so I'm not sure what benefits this will have over a traditional database.
  - gogopuppygogo 5y ago
    Gives government more ability to track flow of capital. Hugely awful move for the world to give government more control.
  - mistrial9 5y ago
    Eliminate or substantially reduce third-party transaction guarantee fees, and at the same time, one-hundred percent of the transactions are digitally recorded. A preponderance of big finance relies on trusted third-parties to intermediate transactions. Those third parties charge non-negligible fees to execute each and every transaction. Large value transactions can be done between untrusting parties directly, due to rigid cryptographic signing of the transaction record.
    - rlpb 5y ago
      None of these features require a blockchain and can be done trivially by a central authority issuing append-only cryptographically signed ledger entries. > Large value transactions can be done between untrusting parties directly... What's the benefit of this when the bank has to accept a cleared record for a party to withdraw funds anyway?
victor22 5y ago
That's just traditional banking with extra steps...
- balozi 5y ago
  Don't forget that there is still nothing backing the bank deposits themselves. So yes, extra steps, and extra risk. Which also means extra room from intermediaries and fees.
- makeitdouble 5y ago
  Being able to convert back go standard money is a big deal. Currently all the digital offline payment means are a one way trip: you can pay for goods with them, but not exchange with someone or return it to your account. This initiative would solve that issue.
Ericson2314 5y ago
https://www.reuters.com/business/finance/consortium-japan-firms-test-launch-digital-currency-nikkei-2021-11-23/ https://www.reuters.com/business/finance/consortium-japan-fi... this one doesn't mention blockchain. Which gives me hope. The cozy relationship between the state and the big corps gives me worry, but ideally: 1. Giving everyone a central bank account makes issuing a UBI really easy. That would be great for Japan to boost domestic consumption, and get those hikikomoris some non-shit non-saleryman jobs. 2. If this does eventually displace cash, they can also try out fun things like https://en.wikipedia.org/wiki/Demurrage https://en.wikipedia.org/wiki/Demurrage which would really counteract deflation in all the right ways but none of the wrong ways. Ultimately, per stuff like https://yalebooks.yale.edu/book/9780300244175/trade-wars-are-class-wars https://yalebooks.yale.edu/book/9780300244175/trade-wars-are... the world really needs the big exporter countries to consume more. The world we live in of large trade imbalances is not healthy for the US or the big exporters alike. I don't think the US has the political will to overcome it's oligarchs and stop the imports, plus the poorer countries that don't even export a lot still greatly depend on our trade deficit to be able to get USD reserves. It is better the big exporters stop "importing our demand" so much, and focus more on domestic consumption (and at least China has stated they want to do this). That will put the pressure on the US from the outside to side-step our failed-state politics.
- Ericson2314 5y ago
  Oh I thought this thing involved the Bank of Japan, but evidently it is all private sector. Arg nevermined. Hopefully the Bank of Japan does indeed continue with it's exploratory plans, though.
- howmayiannoyyou 5y ago
  > makes issuing a UBI really easy Query: Who produces the goods & services that create value in a country/society when everyone is collecting UBI? Is it just the people who 'enjoy' working? And, when UBI causes baseline consumable prices to rise, we just keep raising UBI, right? Can we just call it for what it really is... communism? Why keep pretending?
  - deleted 5y ago
rattlesnakedave 5y ago
I'm very bullish on federated, permissioned, blockchains in the world of traditional finance, and here's why: - Having ledger that is append only by a set of trusted parties gives you all of the benefits of a distributed ledger, as well as the ability to do things like clawbacks, comply with regulation, etc. - The future I see is multiple blockchains operated by networks of payment processors. For instance, Visa, MasterCard, etc. can all work together to maintain one blockchain. Other countries / regions can have their own. Interop can be done with bridges (like in defi now). - Throughput can be drastically increased between banks. Transactions become confirmed instantly. No more waiting several days for ACH. You can confirm a good balance from the sender, and credit the receiver instantly. - "Just use a database" the hackernews commenter shouted out. Using a database instead of a blockchain limits what you can do in terms of 3rd party interop, and hamstrings you for upgradability in the future. Facebook's MySQL upgrade is taking YEARS, and they're a SINGLE TECH COMPANY. If you want to move faster, and maintain interop blockchain is the way to go. - This opens the door to multi-asset blockchains between financial institutions. Instruments like loans, equities, etc. can be tokenized, FRACTIONALIZED and traded b/t institutions much more quickly than they can today, because they'll be a part of a permissioned verifiable system. Write a loan today, fractionalize and sell it instantly. There's so much more that's possible here too. Technologies like HyperLedger are really moving the ball forward. I think a lot of the criticisms of this sort of thing are due to shortsightedness of what is possible.
- carlineng 5y ago
  I'm somewhat bullish on the promise of permissioned blockchain systems, but the Facebook/MySQL example is misleading -- * Facebook doesn't need MySQL to interop with other systems in the same way that blockchain enables. * Relational semantics are way more complex than what most distributed ledgers technologies offer. A blockchain is more analogous to the MySQL binlog than to MySQL itself. I would guess that Facebook's DB transaction log is orders of magnitude larger than all the blockchains in the world combined. * Facebook's challenges with MySQL are most likely due to their unprecedented scale. If one were to layer on the governance challenges associated with distributed ledger systems, I would think an upgrade like that would basically be impossible.
uses 5y ago
So, do I understand correctly that these are the main benefits of a CBDC? - A centralized ledger which is maintained by the central bank in question. - Instant payment clearing - no ACH or other steps. You simply request a transaction and it happens immediately if it's possible. - No fees - presumably you can send large amounts without paying for a wire transfer. - Convertible into "regular money" with no fees or intermediaries. You can exchange this currency for traditional deposits at a regular bank, and vice-versa. - Easy transactions with the government. You can pay your taxes, or get paid (stimulus payments, paychecks, for example), instantly. - From the central bank / policymaker perspective, there are many benefits because of the gigantic amount of data they gain access to. Would this be essentially like Fedwire, but for everyone rather than a special service for banks?
politician 5y ago
Just wait until you hear about FedNow...
deleted 5y ago
[deleted]

This is related to yesterdays: https://news.ycombinator.com/item?id=29312300 https://news.ycombinator.com/item?id=29312300 Japan is on the verge of economic collapse. Negative interest rates, major deflation during all of covid. Barely pulling out of deflation and trending back downwards. https://tradingeconomics.com/japan/inflation-cpi https://tradingeconomics.com/japan/inflation-cpi Japan is in deflationary spiral due to high taxes and tremendous debt. Deficit spending to temporarily pull themselves out of deflation and recession will only makes things worse in the long term.

roywiggins 5y ago
I dunno, they've been stumbling through deflation for 30 years now, why not expect them to keep muddling through? https://en.m.wikipedia.org/wiki/Lost_Decades https://en.m.wikipedia.org/wiki/Lost_Decades
jbay808 5y ago
Is there some reason why a country experiencing deflation can't print money and hand it out to voters until inflation returns?
- ionwake 5y ago
  I think the person you replied to got confused - Japan is experiencing a severe collapse and suffering from inflation in most asset classes.
- DennisP 5y ago
  In theory, they could. In practice, the typical way to "print money" is to do things like lower interest rates (incentivizing more borrowing, which increases the money in circulation) and lowering bank reserve requirements (letting them loan more in proportion to their reserves). Both depend on people voluntarily taking out loans, which they might avoid if they're pessimistic about the economy or expect deflation.
  - starfallg 5y ago
    Good summary but slightly out of date. What they rely on now is QE, with the central bank buying assets from banks to free up money for investment. Ends up similar to lowering reserve requirements, but without the drawbacks of lowering reserve requirements. Japan is dealing with it by massive infra projects like the new maglev Shinkansen. So when we are talking about loans, we aren't just talking about consumer credit, although that can be a major component in a consumption-led economy.
  - jbay808 5y ago
    That's why I was wondering about not doing that, and literally minting new cash and using handouts / UBI instead. We can't expect people to borrow money to spend on consumption, even at low interest rates, because they'll be worried about paying it back. No wonder they always just put it into asset purchases. Give them the money no strings attached and they'll spend it. Normally the downside to that is inflation, but since that's the goal anyway it seems like a win-win.
    - DennisP 5y ago
      Makes sense to me.
  - jollybean 5y ago
    Supply Side vs. Demand Side very different though. Poor people buying stuff they 'need' is different than coaxing businesses to invest more broadly with slightly cheaper loans but with the demographic decline still on their daily charts.
- seibelj 5y ago
  Japan is a very rigid economy where doing things a bureaucratic, traditional way is prized and new innovations are difficult and slow. They have low immigration and culturally non-Japanese cannot assimilate fully. Their birth rate is low, they can't replace population with immigrants, and an ever increasing percentage of those who are alive are old, no longer productive / contributing to the economy, and spending money on end-of-life things in retirement. No matter how much money they print, it can't solve for an economy where there are fewer consumers and producers every year.
  - jbay808 5y ago
    I think the Bank of Japan might be more innovative than you give them credit for, seeing as how they were the first to deploy almost all of today's unconventional policies, including QE itself. A low birth rate also is certainly not some immutable characteristic of Japanese culture; they had very high birth rates through most of the 20th century. It's clearly the result of economic circumstances and incentives, like the high cost of childcare and long working hours. These do seem like things that government and monetary policy cannot control directly but can certainly influence. In some respect the low birth rate might be both a cause of deflation itself and also a result. Lastly, > No matter how much money they print, it can't solve for an economy where there are fewer consumers and producers every year. It might not solve the economy, but speaking strictly of inflation, it doesn't seem imaginable that no matter how much money they print it won't create inflation. They must just be printing the wrong kind of money. (As this economist explains, there are indeed different kinds: https://youtu.be/4xgHbW2A9KE https://youtu.be/4xgHbW2A9KE )
- sleepysysadmin 5y ago
  >Is there some reason why a country experiencing deflation can't print money and hand it out to voters until inflation returns? That's a great question. Japan has been doing this for about a decade. Shinzo Abe kind of called it abenomics; aka quantative easing. https://en.wikipedia.org/wiki/Abenomics https://en.wikipedia.org/wiki/Abenomics It has worked, no question, effectively exactly as you propose. The problem is that it clearly didn't solve the problem. While also creating new problems and since the original problem never gets solved, when you are forced to cut spending because the cost of debt has become too crippling. You retain all the new problems and now feel the old problems. https://tradingeconomics.com/japan/government-spending-to-gdp https://tradingeconomics.com/japan/government-spending-to-gd... https://tradingeconomics.com/japan/government-debt-to-gdp https://tradingeconomics.com/japan/government-debt-to-gdp 266% debt to gdp is about 24% higher than the peak drama about Greece's collapse. https://tradingeconomics.com/japan/government-budget https://tradingeconomics.com/japan/government-budget Haven't balanced their budget since the 1990s. Tough decisions coming for Japan.
  - NovemberWhiskey 5y ago
    The big difference vs. Greece is that ~90% of all Japanese government bonds are held domestically.
    - hogFeast 5y ago
      They also have substantial foreign assets that can be sold. The situation in Japan is very unusual because the financial system has a massive synthetic net short JPY position. Because rates are so low, savings have been effectively dollarized in an economy that isn't dollarized (this is why USD/JPY is so correlated with rate differentials)...so I don't think anyone really knows how this will works out (there aren't a lot of historical examples, no country that held so many claims denominated in a foreign currency has been such a large part of the world economy...this is the end game of the export-oriented, mercantilist political economy...Germany is a ways down the same road). It makes no difference whatsoever that JGBs are held domestically in practice because it is harder to push through a debt restructuring politically when voters are the ones losing money (you have seen this in Italy too, they have "bailed in" domestic savers which has significantly reduced their options...if the debt is owned by foreign investors, you can usually restructure and point at them: look at these greedy capitalists, terrible...but we have no choice). On some of the other stuff mentioned above, the reason why Japan is in such a mess is because their financial/corporate sectors is totally screwed. There is no real demand for money, corporate balance sheets are loaded down with cash, no-one wants to invest, demand for money is so low that Japan's savings banks are huge players in US corporate lending, banks seem to have no actual capacity to make corporate loans...they don't know how, they just buy US bonds and call it a day, monetary policy (counter-intuitively) is making this worse, it is reducing the supply of "safe assets" but hasn't increased the capacity of institutions for "non-safe assets", it has led to a significant reduction in lending within Japan because rates overseas are so much higher...it is a real shit storm, but it all comes down to monetary policy officials not understanding money transmission (unusually for Japan, in the 1980s the govt was involved in directing lending on a loan-by-loan basis so they have a history of real control over monetary transmission).
- whytaka 5y ago
  If they were giving it out unevenly it would be unjust. If they were giving it bout evenly, there’d be no difference. Nominally, the price of goods would increase but so would your reserve. So there’be no added incentive to buy.
  - jbay808 5y ago
    Helicopter money is not like a stock split, because you aren't handing it out in proportion to how much money people already have. When prices go up it certainly creates an incentive to spend your savings, even if you're getting new money to offset the costs.
Psillisp 5y ago
This feels like the hallmarks of a system that over values 'hard work' but doesn't value entrepreneurship or risk taking. Corporate rent seeking is proper up by a strong welfare state. "Herein lies the unique twist that Piketty’s theory takes on in Japan: the disparity is not so much between the super-rich and everyone else, but between large corporations, which can retain earnings and accumulate capital, and the individuals who are being squeezed in the process." https://www.weforum.org/agenda/2015/03/why-inequality-is-different-in-japan/ https://www.weforum.org/agenda/2015/03/why-inequality-is-dif...

m3kw9 5y ago

I’m just confused about this. Isn’t most money system digitized already? When we buy stuff online it is indistinguishable from digital money, and the bank as far as they are concerned is seeing numbers on a screen from a database, which is backed by fractional deposits.

rich_sasha 5y ago
Central bank digital money normally means normal bank account but held directly with the central bank
deleted 5y ago
[deleted]
Kaytaro 5y ago
Yes, the only difference is this currency will be on a blockchain. Although I'm assuming it will be completely centralized so I'm not sure what benefits this will have over a traditional database.
- gogopuppygogo 5y ago
  Gives government more ability to track flow of capital. Hugely awful move for the world to give government more control.
- mistrial9 5y ago
  Eliminate or substantially reduce third-party transaction guarantee fees, and at the same time, one-hundred percent of the transactions are digitally recorded. A preponderance of big finance relies on trusted third-parties to intermediate transactions. Those third parties charge non-negligible fees to execute each and every transaction. Large value transactions can be done between untrusting parties directly, due to rigid cryptographic signing of the transaction record.
  - rlpb 5y ago
    None of these features require a blockchain and can be done trivially by a central authority issuing append-only cryptographically signed ledger entries. > Large value transactions can be done between untrusting parties directly... What's the benefit of this when the bank has to accept a cleared record for a party to withdraw funds anyway?

victor22 5y ago

That's just traditional banking with extra steps...

balozi 5y ago
Don't forget that there is still nothing backing the bank deposits themselves. So yes, extra steps, and extra risk. Which also means extra room from intermediaries and fees.
makeitdouble 5y ago
Being able to convert back go standard money is a big deal. Currently all the digital offline payment means are a one way trip: you can pay for goods with them, but not exchange with someone or return it to your account. This initiative would solve that issue.

Ericson2314 5y ago

https://www.reuters.com/business/finance/consortium-japan-firms-test-launch-digital-currency-nikkei-2021-11-23/ https://www.reuters.com/business/finance/consortium-japan-fi... this one doesn't mention blockchain. Which gives me hope. The cozy relationship between the state and the big corps gives me worry, but ideally: 1. Giving everyone a central bank account makes issuing a UBI really easy. That would be great for Japan to boost domestic consumption, and get those hikikomoris some non-shit non-saleryman jobs. 2. If this does eventually displace cash, they can also try out fun things like https://en.wikipedia.org/wiki/Demurrage https://en.wikipedia.org/wiki/Demurrage which would really counteract deflation in all the right ways but none of the wrong ways. Ultimately, per stuff like https://yalebooks.yale.edu/book/9780300244175/trade-wars-are-class-wars https://yalebooks.yale.edu/book/9780300244175/trade-wars-are... the world really needs the big exporter countries to consume more. The world we live in of large trade imbalances is not healthy for the US or the big exporters alike. I don't think the US has the political will to overcome it's oligarchs and stop the imports, plus the poorer countries that don't even export a lot still greatly depend on our trade deficit to be able to get USD reserves. It is better the big exporters stop "importing our demand" so much, and focus more on domestic consumption (and at least China has stated they want to do this). That will put the pressure on the US from the outside to side-step our failed-state politics.

Ericson2314 5y ago
Oh I thought this thing involved the Bank of Japan, but evidently it is all private sector. Arg nevermined. Hopefully the Bank of Japan does indeed continue with it's exploratory plans, though.
howmayiannoyyou 5y ago
> makes issuing a UBI really easy Query: Who produces the goods & services that create value in a country/society when everyone is collecting UBI? Is it just the people who 'enjoy' working? And, when UBI causes baseline consumable prices to rise, we just keep raising UBI, right? Can we just call it for what it really is... communism? Why keep pretending?
- deleted 5y ago

rattlesnakedave 5y ago

I'm very bullish on federated, permissioned, blockchains in the world of traditional finance, and here's why: - Having ledger that is append only by a set of trusted parties gives you all of the benefits of a distributed ledger, as well as the ability to do things like clawbacks, comply with regulation, etc. - The future I see is multiple blockchains operated by networks of payment processors. For instance, Visa, MasterCard, etc. can all work together to maintain one blockchain. Other countries / regions can have their own. Interop can be done with bridges (like in defi now). - Throughput can be drastically increased between banks. Transactions become confirmed instantly. No more waiting several days for ACH. You can confirm a good balance from the sender, and credit the receiver instantly. - "Just use a database" the hackernews commenter shouted out. Using a database instead of a blockchain limits what you can do in terms of 3rd party interop, and hamstrings you for upgradability in the future. Facebook's MySQL upgrade is taking YEARS, and they're a SINGLE TECH COMPANY. If you want to move faster, and maintain interop blockchain is the way to go. - This opens the door to multi-asset blockchains between financial institutions. Instruments like loans, equities, etc. can be tokenized, FRACTIONALIZED and traded b/t institutions much more quickly than they can today, because they'll be a part of a permissioned verifiable system. Write a loan today, fractionalize and sell it instantly. There's so much more that's possible here too. Technologies like HyperLedger are really moving the ball forward. I think a lot of the criticisms of this sort of thing are due to shortsightedness of what is possible.

carlineng 5y ago
I'm somewhat bullish on the promise of permissioned blockchain systems, but the Facebook/MySQL example is misleading -- * Facebook doesn't need MySQL to interop with other systems in the same way that blockchain enables. * Relational semantics are way more complex than what most distributed ledgers technologies offer. A blockchain is more analogous to the MySQL binlog than to MySQL itself. I would guess that Facebook's DB transaction log is orders of magnitude larger than all the blockchains in the world combined. * Facebook's challenges with MySQL are most likely due to their unprecedented scale. If one were to layer on the governance challenges associated with distributed ledger systems, I would think an upgrade like that would basically be impossible.

uses 5y ago

So, do I understand correctly that these are the main benefits of a CBDC? - A centralized ledger which is maintained by the central bank in question. - Instant payment clearing - no ACH or other steps. You simply request a transaction and it happens immediately if it's possible. - No fees - presumably you can send large amounts without paying for a wire transfer. - Convertible into "regular money" with no fees or intermediaries. You can exchange this currency for traditional deposits at a regular bank, and vice-versa. - Easy transactions with the government. You can pay your taxes, or get paid (stimulus payments, paychecks, for example), instantly. - From the central bank / policymaker perspective, there are many benefits because of the gigantic amount of data they gain access to. Would this be essentially like Fedwire, but for everyone rather than a special service for banks?

politician 5y ago

Just wait until you hear about FedNow...

deleted 5y ago

[deleted]