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A central bank digital currency would allow the central bank to take your money. Right now, a government agency would need to ask your bank to take your money.

A central bank digital currency would allow the central bank to take your money. Right now, a government agency would need to ask your bank to take your money. That bank will have lawyers and they'll ask questions. You can guarantee Jamie Dimon at Chase doesn't just say "oh, well ok then, sure". He'll want to see the relevant documentation, have his people inspect it, and push back if he doesn't like it.

gspr 5y ago
The only safeguard against state institutions taking your things is strong laws preventing them from doing so. This is a fact independent of what kind of currency is used.
nullc 5y ago
> Right now, a government agency would need to ask your bank to take your money A government agency seizing your money rather than asking a bank to do so would often be an improvement over what we have in the US today: Banks routinely freeze peoples accounts with zero due process and little recourse, through the implicit (but not legally recognized) coercion of the impossible maze of bank regulation. When your assets are frozen directly by the government you're more likely to get access to some amount of due process-- though not always (see: civil forfeiture). In any case, since banks absolutely never stand up against the government to protect ordinary customers (drug cartels will billion dollar scale accounts are another matter...) it's hard to imagine a CBDC being worse in this particular respect.
pavlov 5y ago
A central bank also has lawyers who ask questions? Sometimes it feels like some people imagine government working like this: Biden calls up Powell and says “Let’s take all the money from our political enemy N.N today” to which Powell replies “Yeah LOL awesome, my minions are pushing the button now”
- danielmarkbruce 5y ago
  Sure - you are right. But one more layer of lawyers asking questions on such a request is, imo, extremely valuable. Especially when the extra lawyers are being paid by a private entity who is more answerable to shareholders and customers than the central bank (or whoever asks them).
  - deleted 5y ago
    [deleted]
  - mark_l_watson 5y ago
    This is an interesting sub-thread. My question is "why do you and parent commentators think that these decisions, both on payer/payee sides, won't be fully automated AI - with no human in the loop?"
- refurb 5y ago
  Well, it kind of does work that way, just with more signatures.
- Ekaros 5y ago
  In that case just like in current you can sue the government. And if that route is not open due to corruption or whatever it is essentially same... If truly totalitarian government decides to do something "illegal" you really don't have much way to fix it in either scenario.
dragonwriter 5y ago
> Right now, a government agency would need to ask a bank to take your money. And those questions will generally be “How much do you want to take? And how do you want us to give it to you?” Oh, they’ll probably make sure the correct paperwork is filled out and procedure is followed, but substantive, as opposed to procedural, due process isn't something banks are or want to be guarantors of.
- danielmarkbruce 5y ago
  We can agree to disagree. I don't buy for one second that any of the large US banks does that. Especially Chase. Jamie Dimon doesn't hide his... extreme frustration (/hatred?) of government entities.
  - TedDoesntTalk 5y ago
    Moreover, they lose a customer by doing that. Multiply that out and they lose lots of customers. Why would it be in their interest unless legislated to do so?
  - bccdee 5y ago
    I'm sure he performatively complains about regulation because he's a wealthy CEO who doesn't want to pay taxes, but at the end of the day, he has no financial interest in "protecting the little guy," because he's not a little guy and neither are any of his cronies.
    - danielmarkbruce 5y ago
      He has plenty of financial interest. Chase has 100's of billions in core deposits from little guys. They pay about 0 on them. They lend them at 3-4%. If people started to think Chase was a place where their deposits weren't safe, it wouldn't be pretty for Chase. Even the thought that maybe just maybe they aren't safe is enough. Banks are in a precarious situation re deposits.
      - bccdee 5y ago
rr808 5y ago
I'm pretty sure any government that wants to will take your regular bitcoin too. Just put you in jail til you hand it over. If you make any transaction it'll be easy for them to see your wallet.
- novok 5y ago
  You've just changed the cost of doing so from near costless (a DB update) to very expensive to do at scale. (Jail, police staffing, court staffing, prisoner care and feeding, potential violence and injury, paying staff to find targets, manually, etc) That alone is worth a lot.
  - bccdee 5y ago
    As if the United States has ever had any qualms about wasting money on the justice system. Remember the war on drugs?
  - ygjb 5y ago
    > (Jail, police staffing, court staffing, prisoner care and feeding, potential violence and injury, paying staff to find targets, manually, etc) That alone is worth a lot. Uh, you do realize that to politicians, enforcement looks alot like a jobs program?
  - noisy_boy 5y ago
    Scale doesn't mean you need to process the entire target population. A carefully selected subset of targets with visibility tailored for demonstration purpose can be very persuasive for the rest of the people to fall in line. Of course that also comes with the risk of resistance and riots.
greenonions 5y ago
This implies that a central bank digital currency (assuming this is the United States) would have these capabilities. Maybe this is naive, but I would think that this digital currency would be designed to preserve people's rights in the same ways that current money does.
- hammock 5y ago
  In what ways is current money designed to preserve people's rights?
JumpCrisscross 5y ago
> central bank digital currency would allow the central bank to take your money Can’t it be architected such that this isn’t possible without certain controls?
- hammock 5y ago
  That's not the point though.. if you read any of the papers by any of the central banks or the WEF or the related think tanks they want the control.
- jcadam 5y ago
  A government voluntarily placing limits on its power?
cuteboy19 5y ago
Typically banks just give government what they want, no questions asked. The ability to do business is far more important than a few angry customers
jbay808 5y ago
In addition, if the CBDC replaces cash, there might not be a way to avoid the central bank taking your money. This is how they could implement negative interest rates, which could be used to prop up asset values.
- imtringued 5y ago
  Or they could use negative interest rates to reduce the supply of money as the richest members in society no longer have guaranteed automatic accumulation of their wealth.
  - nullc 5y ago
    The richest members of society already don't leave a large portion of their wealth sitting around as cash. Cash would be even more avoided if there were a realistic prospect of negative interest rates.
    - danielmarkbruce 5y ago
      Wait, Elon doesn't have his $150 bill in his checking account at BofA??

gspr 5y ago

The only safeguard against state institutions taking your things is strong laws preventing them from doing so. This is a fact independent of what kind of currency is used.

nullc 5y ago

> Right now, a government agency would need to ask your bank to take your money A government agency seizing your money rather than asking a bank to do so would often be an improvement over what we have in the US today: Banks routinely freeze peoples accounts with zero due process and little recourse, through the implicit (but not legally recognized) coercion of the impossible maze of bank regulation. When your assets are frozen directly by the government you're more likely to get access to some amount of due process-- though not always (see: civil forfeiture). In any case, since banks absolutely never stand up against the government to protect ordinary customers (drug cartels will billion dollar scale accounts are another matter...) it's hard to imagine a CBDC being worse in this particular respect.

pavlov 5y ago

A central bank also has lawyers who ask questions? Sometimes it feels like some people imagine government working like this: Biden calls up Powell and says “Let’s take all the money from our political enemy N.N today” to which Powell replies “Yeah LOL awesome, my minions are pushing the button now”

danielmarkbruce 5y ago
Sure - you are right. But one more layer of lawyers asking questions on such a request is, imo, extremely valuable. Especially when the extra lawyers are being paid by a private entity who is more answerable to shareholders and customers than the central bank (or whoever asks them).
- deleted 5y ago
  [deleted]
- mark_l_watson 5y ago
  This is an interesting sub-thread. My question is "why do you and parent commentators think that these decisions, both on payer/payee sides, won't be fully automated AI - with no human in the loop?"
refurb 5y ago
Well, it kind of does work that way, just with more signatures.
Ekaros 5y ago
In that case just like in current you can sue the government. And if that route is not open due to corruption or whatever it is essentially same... If truly totalitarian government decides to do something "illegal" you really don't have much way to fix it in either scenario.

dragonwriter 5y ago

> Right now, a government agency would need to ask a bank to take your money. And those questions will generally be “How much do you want to take? And how do you want us to give it to you?” Oh, they’ll probably make sure the correct paperwork is filled out and procedure is followed, but substantive, as opposed to procedural, due process isn't something banks are or want to be guarantors of.

danielmarkbruce 5y ago
We can agree to disagree. I don't buy for one second that any of the large US banks does that. Especially Chase. Jamie Dimon doesn't hide his... extreme frustration (/hatred?) of government entities.
- TedDoesntTalk 5y ago
  Moreover, they lose a customer by doing that. Multiply that out and they lose lots of customers. Why would it be in their interest unless legislated to do so?
- bccdee 5y ago
  I'm sure he performatively complains about regulation because he's a wealthy CEO who doesn't want to pay taxes, but at the end of the day, he has no financial interest in "protecting the little guy," because he's not a little guy and neither are any of his cronies.
  - danielmarkbruce 5y ago
    He has plenty of financial interest. Chase has 100's of billions in core deposits from little guys. They pay about 0 on them. They lend them at 3-4%. If people started to think Chase was a place where their deposits weren't safe, it wouldn't be pretty for Chase. Even the thought that maybe just maybe they aren't safe is enough. Banks are in a precarious situation re deposits.
    - bccdee 5y ago

rr808 5y ago

I'm pretty sure any government that wants to will take your regular bitcoin too. Just put you in jail til you hand it over. If you make any transaction it'll be easy for them to see your wallet.

novok 5y ago
You've just changed the cost of doing so from near costless (a DB update) to very expensive to do at scale. (Jail, police staffing, court staffing, prisoner care and feeding, potential violence and injury, paying staff to find targets, manually, etc) That alone is worth a lot.
- bccdee 5y ago
  As if the United States has ever had any qualms about wasting money on the justice system. Remember the war on drugs?
- ygjb 5y ago
  > (Jail, police staffing, court staffing, prisoner care and feeding, potential violence and injury, paying staff to find targets, manually, etc) That alone is worth a lot. Uh, you do realize that to politicians, enforcement looks alot like a jobs program?
- noisy_boy 5y ago
  Scale doesn't mean you need to process the entire target population. A carefully selected subset of targets with visibility tailored for demonstration purpose can be very persuasive for the rest of the people to fall in line. Of course that also comes with the risk of resistance and riots.

greenonions 5y ago

This implies that a central bank digital currency (assuming this is the United States) would have these capabilities. Maybe this is naive, but I would think that this digital currency would be designed to preserve people's rights in the same ways that current money does.

hammock 5y ago
In what ways is current money designed to preserve people's rights?

JumpCrisscross 5y ago

> central bank digital currency would allow the central bank to take your money Can’t it be architected such that this isn’t possible without certain controls?

hammock 5y ago
That's not the point though.. if you read any of the papers by any of the central banks or the WEF or the related think tanks they want the control.
jcadam 5y ago
A government voluntarily placing limits on its power?

cuteboy19 5y ago

Typically banks just give government what they want, no questions asked. The ability to do business is far more important than a few angry customers

jbay808 5y ago

In addition, if the CBDC replaces cash, there might not be a way to avoid the central bank taking your money. This is how they could implement negative interest rates, which could be used to prop up asset values.

imtringued 5y ago
Or they could use negative interest rates to reduce the supply of money as the richest members in society no longer have guaranteed automatic accumulation of their wealth.
- nullc 5y ago
  The richest members of society already don't leave a large portion of their wealth sitting around as cash. Cash would be even more avoided if there were a realistic prospect of negative interest rates.
  - danielmarkbruce 5y ago
    Wait, Elon doesn't have his $150 bill in his checking account at BofA??