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Nobody’s using CBDCs – India’s piloting one anyway
- presentation 4y agoReally wish they said what a CBDC is.
- SanjayMehta 4y agoIndian here - I had to read the article to find out what it was. Then I remembered the RBI had made a ruckus about it a few months ago. I doubt anyone cares since almost every one uses their mobile phone and UPI for money transfers.
- adwn 4y agoReally? It's right there in the second sentence: > From China to the UAE, the Bahamas to Nigeria, countries around the world have started trialling the use of central bank digital currencies as a way to translate their national fiat currencies into a means of digital exchange. CBDC = Central Bank Digital Currency.
- bfung 4y agoIt’s there in the first sentence, though def not so clear as it’s not capitalized: Central Bank Digital Currency (CBDC).
- ahiknsr 4y agoCBDC = What is central bank digital currency? see https://www.bankofengland.co.uk/research/digital-currencies https://www.bankofengland.co.uk/research/digital-currencies
- influxmoment 4y agoOne payment system to rule them all and monitor a population
- 1letterunixname 4y agoDoes a term require more than 2 seconds of thinking? If yes, then describe it, otherwise it's unnecessary. This one seemed obvious.
- adql 4y agoOf course it's obvious its Centralized Big Dick Contest /s It's customary to expand shortcut in full if it there is chance it might be unknown to the reader and this isn't even a financial blog but a tech one.
- 1letterunixname 4y agoThat's inappropriate and unhelpful. People with brains can infer meaning from the context. If they can't, then they aren't smart enough to have around.
- pjkundert 4y agoThey will use a major crisis to force adoption.
- lzaaz 4y agoThank the Lord this wasn't ready to deploy during covid. They are going to prepare it for the next crisis.
- zx8080 4y agoIn some places long before covid. Go to swedish coffee shop in 2018 and try buying a cup of coffee with cash. No luck. Digital payments only.
- pascal_wizzard 4y agothere's no need for a cbdc, just invoke the emergencies act and you can do whatever you want with anybodies money
- FollowingTheDao 4y ago> As the popularity of physical money diminishes, however, that nexus could break down. And if the "popularity" of physical money does not diminish, they will get rid of physical money. But physical money is still popular for people in many cases. CBDCs need to be resisted with everything we have. They are not about convience, they are about control "on the fact that it provides another opportunity for the state to peer into private individual transactions." India is hostile to crypto because its cannot be (as easily) controlled. I am no fan of crypto either.
- ssivark 4y agoMeh. The article expends zero effort in actually engaging with the Reserve Bank of India's motivations or the CBDC design [1], and is filled with shallow comments about the roll-out in other countries. This is a very important topic as it has the potential to reshape banking/economics on the timescale of decades. For a good down-to-earth understanding of "layer 1" -vs- "layer 2" money, refer the following post [2]. India's digital payments ecosystem (the "UPI") has been an unparallelled success at the second layer. Beyond that, there are many motivations that make it potentially interesting to consider digital layer 1 money -- starting with the costs of managing paper money, reducing settlement risk, potentially smoothing cross-border payments, the possibility of setting negative interest rates, etc. There are definitely pros and cons, but I'm yet to find a comprehensive and well thought-out analysis (and would appreciate any links!), especially in the Indian context. [1]: RBI Concept Note on CBDC: https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/CONCEPTNOTEACB531172E0B4DFC9A6E506C2C24FFB6.PDF https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/CONC... [2]: https://brettscott.substack.com/p/casino-chip-cashless-society https://brettscott.substack.com/p/casino-chip-cashless-socie...
- blackoil 4y agoPaper money is a small percentage of total money, and a much smaller percentage in terms of actual transactions. Most of the money is already digital.
- themoonisachees 4y agoIsn't that highly affected by how much money rich people (ie users of digital money) have? One whould think paper money still is used by a good 50% of the worlds poorest, but they can't hold a candle to the amount hedge funds, banks and simply normal people from western countries move around compared to them.
- gokuldas011011 4y agoIsn't all money still paper behind the scenes, where the banks transfer to one another
- deleted 4y ago[deleted]
- fab1an 4y agoIt's surprising to see that there are liberal proponents of this. You don't have to be a raging libertarian to see the risks of unlocking this much financial reach for governments. We (in the West) may now mostly live under reasonable governments, but there's obviously no guarantee that this won't change (including towards your <current political opponents>), and implementing social credit score systems and other dystopian things would be much easier under CBDC than it currently is?
- spaceman_2020 4y agoAbsolutely. If it remains an alternative, it's fine. But if they try to force out physical cash completely in favor of CBDCs, you better be wary.
- Ekaros 4y agoI never understood this argument. It is not like governments can't tell the banks and payment processor not to accept payments or freeze all funds of certain people. Courts can already order automatic confiscation in cases like bankruptcies and so on.
- eldenwrong 4y agoDoes it require 1 click?
- potamic 4y agoFriction in a process can be an amazing deterrent and prevents you from abusing power en masse. Whenever there is a cost to doing something, it demands prudence.
- smolder 4y agoI wish this was more widely understood. It's relevant when talking about the danger of ubiquitous/dragnet surveillance; it's relevant to our habits around communication, and consumption of media. Friction is a key determining factor in human behavior.
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- spaceman_2020 4y agoCashless societies terrify me. So easy to control people when you can decide what and with whom they can transact with.
- m4rtink 4y agoWell, with most salaries going to bank accounts it's half way there already, isn't it ?
- FpUser 4y agoWell you can still take cash out and hide it under the mattress ;)
- imtringued 4y agoHow to generate unemployment 101.
- luckylion 4y agoEspecially since it's more common now to pay digitally and not get cash from the bank and then use it in every day shopping. I've adopted it too when merchants strongly encouraged it during the lock downs, and it's just so easy, I've kept it. I do spend more, but I don't know if there's a causal relationship -- would handing over bank notes make me more aware of what and how much I'm buying?
- Ekaros 4y agoAlso if you think of payment flows. I would guess that less than a dozen operators on average in each country cover nearly all of payments. And top 3-4 likely vast majority. For Europe I believe VISA+MC, SEPA and maybe one or two domestic solutions handle most of transactions.
- m4rtink 4y agoThis is already an issues when global/regional payment processors start to apply either their local law or questionable company policies in the whole region or globally. Payment processors being a near monopoly, this has a disproportionate effect.
- matkoniecz 4y agoRemind me about https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetisation https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis... > On 8 November 2016, the Government of India announced the demonetisation of all ₹500 and ₹1,000 banknotes > Several people were reported to have died from standing in queues for hours to exchange their demonetised banknotes.[180][181][182][183][184][185] Deaths were also attributed to lack of medical help due to refusal of demonetised banknotes by hospitals.[186][187][188] > The exchange of banknotes was stopped completely on 25 November, although the government had previously stated that the volume of exchange would be increased after that date. > The push for digital payments was one of the stated intentions of demonetisation. So if someone missed this 17 days or has not managed to exchange their funds - then they would lost all their cash they were holding using demonetized banknotes.
- Cthulhu_ 4y agoThey only had 17 days? That's ridiculous; normally they would just stop printing them and have them be taken out of rotation in a natural fashion (e.g. bank deposits, but that assumes cash is eventually deposited and converted to a number in a bank account).
- danuker 4y agoThat is how you realize the intent is to oppress senselessly, not just oppress.
- matkoniecz 4y ago> They only had 17 days? Yes. Unless this Wikipedia page is horrifyingly misleading. But this alone would ensure that I would keep all my funds into something more trustworthy. Even freaking Bitcoin starts to be a sane solution, to say nothing about dollars/euro/gold.
- PeterisP 4y agoThe goal of that campaign was not to change which denominations are in circulation, but rather quite explicitly to confiscate unaccounted-for wealth stored as piles of cash - that's why there were all kinds of quantity limits, and also the time limit to ensure that those who had a lot of such cash could not effectively launder most of it.
- danbruc 4y agoBuild the following and I will use it. - value pegged to some existing currency - unforgeable and easily verifiable, preferably offline - non-traceable, just like coins or banknotes without a serial number - usable offline and without third parties, just like handing over physical money
- LearnProg17 4y agoNon-traceablity defeats the purpose of a currency. Might as well trade in gold. For most transactions, physical money isn't really needed nor convenient.
- danbruc 4y agoWhy does non-traceablity defeat the purpose of a currency? While physical money - besides the coins - is tracable in theory, this seems to be only used to limited extend. Nowadays it would not be to hard to do automatically but it would have been impractical to do at scale a few decades back. And even today you could not obtain a trace without gaps even if you wanted to.
- littleorca 4y agoYuan digital currency comes with expiry date. https://bfsi.economictimes.indiatimes.com/news/policy/digital-currency-yuan-comes-with-an-expiry-date-spend-or-it-will-vanish/82059471 https://bfsi.economictimes.indiatimes.com/news/policy/digita...
- shapefrog 4y agoCentral bank trials new database for their banking backend.
- wtmt 4y agoI don’t see the need for a retail CBDC in India right now. India already has a TCS (tax collected at source) for outward remittances beyond Rs 700,000 in a financial year. This is a tax that’s collected first and refunded or adjusted later. The tracking of these transactions across all authorized forex dealers is already done by the Reserve Bank of India (RBI). So a CBDC isn’t going to add value here. But I think it will be made a case since CBDC for retail is a solution searching for a problem. The CBDC being a zero interest instrument, only a scare created about lots of counterfeit paper currency could increase adoption, IMO (just like a fake bogeyman about “black money” was told when declaring more than 80% of the currency as invalid in 2016. [1] Cash is simple. Cash is easy. Cash doesn’t need smartphones. Did you know that less than half (or half) the population in India has a smartphone? At least one major “too big to fail” bank [2] is distributing an Android app for the CBDC on its website as an APK file. [2] [1]: https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetisation https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis... [2]: https://www.icicibank.com/personal-banking/online-services/funds-transfer/digital-rupee https://www.icicibank.com/personal-banking/online-services/f...
- rattlesnakedave 4y agoI like CBDCs, and I’m a big privacy guy generally. I really do not see them as being significantly worse than the status quo of digital payments. For every horrifying what-if mentioned there’s already an example of it in our current system (in the US, at least). If having them means I don’t have to deal with ACH again, I’m all for it.
- JumpCrisscross 4y agoIndia closely guards the rupee to prevent foreign exchange crises. A free CBDC challenges that regime because it lets anyone, anywhere, exchange rupees. So expect the sort of controls that would let New Delhi restrict that sort of activity, and then project that power domestically.
- germandiago 4y agoThis is going to be, literally, the biggest promotion for Bitcoin ever done when people start to understand the amount of control this hides behind. It is the end of privacy and the beginning of telling you literally what you will be able to do or not with your own earnings abd for how long, if they decide it is appropriate. This is more of treating people like animals than individuals IMHO.
- walterbell 4y agohttps://www.medianama.com/2022/11/223-petition-against-uidai-aadhaar-data-sharing-foreign-companies/ https://www.medianama.com/2022/11/223-petition-against-uidai... > For 11 years now, Chaitanya has been working with retired Colonel Mathew Thomas to nullify the UIDAI’s contracts with foreign companies allowing access to Aadhaar data ... “Our major concern is: Did the citizens of India give express right to the government in the year 2010 to hand over their data to US. foreign companies? For sure, I did not give any consent,” said Chaitanya. Aadhaar data consists of citizens’ bank accounts, ration cards, addresses, mobile numbers etc. > ... the High Court has advised Thomas to approach the Supreme Court again ... the Supreme Court in the Aadhaar judgment had clarified that “private entities shouldn’t have access to Aadhaar data.” The Supreme Court also said that before accessing biometric data even by the government, judicial authorisation must be a requirement.
- perryizgr8 4y agoI didn't give any consent to tax my income either, government still does it. Fact is that the relationship between citizen and state is not consensual in nature, at least in India. So it is futile to fight it case by case.
- reactspa 4y agoOne of the greatest strengths that both China and India have is that the West will never understand them. The West will think they understand them. They will assume they understand them. They will be sure they understand them. But they will never understand them. Hence the implication in the headline (well-written headline, by the way), that if nobody else uses it, India is wasting its time. The same people said about UPI (Modi's digital payments push): - hardly anyone has cellphones in India - it'll take years to train India's illiterate masses how to use an app on a phone India now has 850 million cellphone users. And the government is creating incentives to put one in every hand. UPI now conducts more digital payments than China or USA (I've heard that it handles more than both combined, but I don't want to make that claim without a reference, and am feeling too lazy to look for one right now).
- cuteboy19 4y ago> The same people said about UPI (Modi's digital payments push) It enrages me how quickly the opposition memory holed its nonsense criticism of UPI when it was first launched. And now they are doing the same thing to erupee
- _448 4y agoIndia has very successfully introduced infrastructure for mobile payments. This is one of the pieces to counter corruption and also to bring the "underground economy" into the mainstream. Digital currency is another such piece to help reduce "underhand" dealings. CBDC in India will probably be used to curb hawala, black money and underground economy.
- yieldcrv 4y agoI dont think it really matters that nobody is using them The current structure of central bank networks required governments to offer an incentive for banks to join it In the US thats a 6% dividend every year for the past 100 years The same tactic will work again