27 ms·

The digital pound: A new form of money for households and businesses?

182 points by thm 4y ago

adastra22 4y ago
They could have called it "Britcoin" but didn't.
- totetsu 4y ago
  Gez
  - itronitron 4y ago
    How about just 'Quoin' then?
- toyg 4y ago
  That's what everyone in the press is calling it anyway.
- pringk02 4y ago
  Brits love puns like this so there is no way it is not going to get called this colloquially
toyg 4y ago
Betteridge's law of headlines strikes again. Completely self-inflicted too!
- dbbk 4y ago
  Not really?
danuker 4y ago
What advantage would I have as a user of a "digital pound", compared to a regular bank account? Increased surveillance? Money with an expiration date?
- Neil44 4y ago
  According to the PDF, the digital pound is issued by and backed by the bank of england and as such is classed as 'public money' in the same way as cash. You don't need to go begging to a private institution for the privilage of holding a bank account to hold your 'private money' which is effectively backed by the private bank. Private bank goes away, private money goes away. If private banks decide they don't like you any more your life becomes very difficult. As physical cash goes away the digital pound is meant to plug that gap, plus a load of other things I probably don't understand.
  - danuker 4y ago
    > As physical cash goes away Ah. I see where this is going now.
  - robertlagrant 4y ago
    > If private banks decide they don't like you any more your life becomes very difficult. Just wait and see what happens to your life if the state decides it doesn't like you.
    - imtringued 4y ago
      You go to jail?
      - throwaway98797 4y ago
        the broader point here is with digital money things that would require discretion become automated which is the dystopia people fear think about it, the vast majority of people break speeding laws. we are okay and on good days trust the cops to stop reckless drivers but let the morning commuters go. apply the same logic to minor financial crimes
        RealityVoid 4y ago
        I'm sorry, I fail to imagine how this dystopia people are talking is any different than the current times. I feel people are assigning _way too much_ importance to the changes this will bring. Kind of how people assigned way too much importance to the changes cryptocurrency will bring. When crypto was young, really young, a lot of backers saw in it the brainchild of their favourite political system, the thing that will save them for tyranny. They just impregnated it with their wishes and desires. Well, I think that was silly. And in the same way, I think impregnating cbdc's with all their fears is just as silly.
proaralyst 4y ago
What I'm hoping comes out of this is some backstop for the ~4 million Brits with no bank account in our increasingly cashless society. What I'm worrying will come out of this is pound-on-blockchain with no real effort to serve the currently-unbanked. Also worth pointing out that the Pound (like every major fiat currency) is already digital: my bank account is stored in a computer, my payments are all electronic. Sure we still have paper notes but banks aren't backing their deposits with a big stack of those in a vault anywhere.
- robertlagrant 4y ago
  I thought this was more about currency than bank accounts.
  - makeitdouble 4y ago
    I think this is a side effect. To use digital currency I assume you’ll need some kind of account, as it will probably rely on some stable identifier. Baking identification in a device (a card for instance) could be an alternative, but past some amount it would probably be impractical and I’d see banks limiting the amount that can move outside of them.
    - robertlagrant 4y ago
      I don't see how this would make unbanked people into banked people, though?
      - makeitdouble 4y ago
        Depends on what you mean by “banked” and how it’s implemented. If for instance, as a bare minimum they can get money from their job transferred in and can pay bills and rent from there, it would already fill the core job of a bank account. Now I’d assume even the simplest system would be managed by banks as a new product, with technically an account bound to it. A bit like C-Zam, N26 and other “banking light” initiative that euro banks have been trying out lately. But lighter alternatives would sure pop up.
no_time 4y ago
Can someone with optimism and enthusiasm about CBDCs enlighten me how will this NOT devolve into a totalitarian dystopia with "programmed" money that can control the population down to the individual level?
- deleted 4y ago
  [deleted]
- f6v 4y ago
  You don’t need to control an individual. You need to control the population as a whole. Which governments do now, with taxes and other policies.
  - yownie 4y ago
    well met, nothing you just wrote addresses what OP asked.
  - no_time 4y ago
    >You don’t need to control an individual. People who lived in Warsaw pact countries where you could only buy meat with a "ticket" would disagree with this. There is a very real desire in the ruling class to be this invasive.
    - jevgeni 4y ago
      ... in a planned economy.
      - thepangolino 4y ago
        [dead]
      - tastyfreeze 4y ago
        Which is the inevitable result of a CBDC. There is no way that a government can resist the temptation of control that CBDCs permit.
      - 4y ago
lucasfcosta 4y ago
Having lived in Britain I’m always surprised by how much the average British citizen doesn’t mind the absurd level of surveillance forced upon them.
- the_other 4y ago
  Some of us mind; personally I'm lost on how to deal with it. Speaking to my MP doesn't seem to have any effect: they mostly tow party lines. Voting for parties I feel more aligned with doesn't work: they're too small to move the needle. We've been caught in a two-party system for as long as I can remember (since the 80s).
- coremoff 4y ago
  the UK population is quite authoritarian, and there are a significant number of the electorate who are quite happy to suffer enormous privation if it means that people in the out-group suffer worse.
- kypro 4y ago
  Over the last year or so all supermarkets in the UK have installed biometric facial recognition cameras at checkout. It's not subtle either – it's literally a HD video camera in your face. So I started covering the checkout cameras and covering my face in supermarkets, but everyone thinks I'm overreacting. I guess I don't really get it. Am I suppose to be fine with this? This isn't some passive CCTV system, it's literally a camera pointed at my face to identify me christ sake. And this stuff happens to me a lot here... I often refuse to give email addresses and number phones, but I get treated as if I'm the one being obstructive. The only exception seems to be if I'm talking about Facebook or Google, then people suddenly seem to care about their privacy, but in the real world there's no regard for privacy at all.
  - TeaDude 4y ago
    Oh, that's what those are! I thought it was just a crappy video feed to try and deter theft. Much like all they eye symbols on security camera warning signs. "As if they'd actually get some poor sod to sift through all the footage to prove that you didn't pay for a packet of crisps!"
jasebell 4y ago
Do away with cash and track everything. It's not a good look.
neffy 4y ago
This is a fairly major economic intervention if they go ahead with it. The big difference (in the report they refer to this as private vs public money), is that they are proposing to issue the equivalent of cash, i.e. Asset money, "public money", rather than the liability deposits, "private money" that are created by the commercial banks, when loans are created, and removed when they are repaid, or defaulted on. The vast majority of transactions today, use bank deposits, "private" money in this rather loaded nomenclature. Because Economics has never really come to grips with how the banking system actually works, there has long been a movement there to replaced the current monetary system, with something that doesn't create and destroy money all the time. Amongst other things, I have seen economists advocate for this, because they believe it would mean that their mathematical models would work properly on the real economy. It is hard to know what the actual economic impact would be, but it is to put it mildly, a little irresponsible to experiment with the production system like this.
- jevgeni 4y ago
  No it's not. Different types of money is common terminology. Also, no idea how "Economics has never really come to grips with the banking system" - there's enough research and understanding on this.
  - throwaway290 4y ago
    Oh yeah, economics. Such a well researched field, so much consensus.
    - jevgeni 4y ago
      The banking system IS well researched. STEM fields also have lack of consensus on different topics.
      - throwaway290 4y ago
        Whataboutism. It's not about STEM a lot of which is abstract and of no direct consequence (especially where there is no consensus) but about something that can impact society and livelihoods directly in unknown ways.
Wildgoose 4y ago
I think the most interesting possibility of a "digital pound" is that it would enable money creation to only be carried out by the Bank of England; it would undermine the ability of regular banks to just create money by issuing loans backed up by nothing more than minimum reserve requirements.
- eldenwrong 4y ago
  Are there still reserve requirements in the UK? The US removed those
- zirgs 4y ago
  I doubt that BoE is going to start issuing loans. That's not what central banks do.
Bo0kerDeWitt 4y ago
A disappointing development to be honest. This is one more way the government can exert control over the people. The downsides risks are horrendous. I haven't yet read this publication in full, but last year I did read the House of Lords Economic Affairs Committee paper on the topic[1]. The title was quite telling: "Central bank digital currencies: a solution in search of a problem?" This was authored by Lord King, the former governor of the BoE, amongst others. It seems the current BoE is taking a different course. [1] https://publications.parliament.uk/pa/ld5802/ldselect/ldeconaf/131/131.pdf https://publications.parliament.uk/pa/ld5802/ldselect/ldecon...
- garyclarke27 4y ago
  More than disappointing - this is terrifying - even worse than China's social credit scoring on New Zealand's Cigarette prohibition. This would enable governments to monitor and control literally every penny you spend or recieve. I wrote a blogpost explaining who money currently works and warning about this development. https://www.onedb.online/blog/what_is_money https://www.onedb.online/blog/what_is_money
  - Spooky23 4y ago
    We already have had this with credit cards, drafts in various forms and crypto. All this would do is get rid of the middleman and the defacto tax assessed on all commerce, both direct or indirect through sale of data.
  - f38zf5vdt 4y ago
    It will cause people to stop using government money. There are many other ways to barter and exchange goods. I expect it will only increase tax evasion as less transactions are even reported. It's no surprise to me to see government gold buying on an absolute tear. [1] The powers that be are well aware of the importance of having real physical goods for the sake of trading and maintaining wealth. [1] https://financialpost.com/commodities/mining/central-banks-buy-gold-fastest-pace-55-years https://financialpost.com/commodities/mining/central-banks-b...
H8crilA 4y ago
The pound is already digital. Printed or minted currency is a small minority of the entire money supply, regardless if how you count the money supply. Most of the base currency is a digital record at the central bank.
dzonga 4y ago
the question for me: is how would this translate to banks growing the money supply ? if now retail consumers are plugged into the central bank ?
traceroute66 4y ago
"The digital pound" ... otherwise known as Pornhub. ;-) (For those who don't follow British slang, to pound or give someone a pounding, I'll leave it to your imagination)
radu_floricica 4y ago
No comment so far has touched on the big issue. This is a direct competition to the big turtle the retail world is sitting on: Visa and Mastercard. They're taking a cut out of everything that happens, not doing a whole lot of innovation, and have exactly the high degree of control people are fearing in a totalitarian CBDC. They'll very likely dislike this and will probably lobby against it (well, as much as what entities with their net worth can be said to "lobby").
- throwaway98797 4y ago
  the value that visa brings is gamifying spending plus amazing fraud protection i’m so much more comfortable buying from random online websites because visa has my back yes i know we collectively play 2.5% for that privilege, but seems worth it to me.
  - TimJRobinson 4y ago
    The government could provide similar chargebacks with a CBDC. Whether their customer service would be any good remains to be seen.
- febeling 4y ago
  Visa and Mastercard are issued through a multitude of providers. OBDC will have central control. It is beyond me how anyone can argue for that, after seeing again and again how governments fails in almost everything repeatedly. At least have two options to chose from.
mypastself 4y ago
Since CBDCs came about as a direct response to the rise of Bitcoin, I wonder if cryptocurrencies’ most lasting contribution might (paradoxically) be the acceleration towards full government surveillance and control over the populace’s financial transactions.
- zirgs 4y ago
  CBDC transaction history isn't public. And only one government can see it. They will also need a warrant for that. Bitcoin and most other cryptos are much worse, because their blockchains are public. Everyone can see every transaction. No warrants required or anything like that.
  - mypastself 4y ago
    You’re relying on several assumptions here, not all of which are fully defensible in my view: There’s no such thing as a private cryptocurrency. Uncensorability is not an important characteristic of cryptocurrencies. CBDCs will only be used by democratic governments. Governments considered democratic always follow the letter and spirit of their own laws.
  - JumpCrisscross 4y ago
    > only one government can see it. They will also need a warrant for that These are all assumptions. The former is safe. The latter, unlikely. (Particularly in the U.K.)
    - mywittyname 4y ago
      At least the people are able to vote for those who write the rules for the government. If people want to ensure a warrant is required, then they can push for it by voting for candidates that will enshrine that requirement into law and put into a place audits that ensure compliance. It's a lot more difficult to get the same results from a private entity who has a financial incentive to skirt laws.
      - 4y ago
TeaDude 4y ago
On one hand: I am sick of banks and pseudo banks (Paypal, Stripe etc.) fucking about the digital payments space. On the other hand: I am 100% sure that the UK govt will reimplement these hurdles and add their own.
- zirgs 4y ago
  The USA should finally start regulating PayPal as a bank. PayPal is legally a bank in the EU and is regulated as such.
deleted 4y ago
[deleted]
OJFord 4y ago
Excerpt from p19: > Embedded finance is an innovation that could shape the retail payments experience. This is where financial services, and in particular payments, are integrated into another industry’s service, function or feature. Examples include, ‘one-click’ purchases of goods via social media platforms, ‘in-game’ payments or, in the future, marketplaces and transactions in the metaverse. Does the author question that or realise what they're writing at all, or is it just a case of researching and regurgitating buzzwords? 'The metaverse'... it should be a defined term, and then removed from the document because they realise it doesn't mean anything, or that you can't define it in a sensible way that '[future] transactions in the metaverse' isn't just me shopping on amazon.co.uk today. I do slightly envy working on something with 3y of technical design (after a year of research to give it the go ahead) before anything gets built though. Perhaps that's too much, but a middle ground, or I envy some aspects of it.
- gilleain 4y ago
  > 'The metaverse'... it should be a defined term From what I've seen so far, 'shopping in the Metaverse' means 'like Amazon, but in 3D!'. So, filling a virtual shopping cart (with virtual wonky wheel?) with virtual items in VR... I could be wrong, but like many things in a Metaverse, it seems not just pointless but actively worse than the experience of '2D' shopping in a normal website.
  - OJFord 4y ago
    Yes, but it's just not a relevant distinction for the purposes here is it? It's just online/in-app payments, the way the website/app is rendered is completely irrelevant.
    - gilleain 4y ago
      Totally agree :) I don't see any distinction between buying products in a Metaverse or other similar VR environment, and clicking on 'Add to cart' in a website. Indeed there is often no difference between buying online and IRL. If I go into a physical store and buy something to be delivered, this is rarely different to doing the same online. Fraud is a possible distinction, but otherwise ...
tumetab1 4y ago
tl;dr summary: The paper is not about blockchain just an upgrade of how money is transferred between bank/payments operators customers... a Revolut for the whole country. Money/Currency rules are the same. Access to network is the same (customers banks use banks apps)
neilv 4y ago
Judging from the ridiculous cookie consent dialog, do they even want people to read this page (which invites public input)?
TheDudeMan 4y ago
Humans, get on bitcoin before it's too late.
- CyberDildonics 4y ago
  That's the one with 1 KB/s of throughput for the whole world right? A single 28.8 modem's bandwidth for the transactions of billions of people. https://bitinfocharts.com/comparison/size-btc.html#1y https://bitinfocharts.com/comparison/size-btc.html#1y And before anyone says "lightning network" realize that that's like playing catch in your back yard and thinking you're going to pad your major league baseball lifetime stats. You could also say it's like passing IOUs back and forth with a friend.
  - TheDudeMan 4y ago
    Lightning network. Plus all of the other layer 2 networks that would like to play.
    - CyberDildonics 4y ago
      The lightning network what? You can't just repeat something and magically expect it to work. It has been 8 years, what problem is it solving? Transactions still have to make it on the chain to count. No other cryptocurrency has this problem. Why would be people try to go through convoluted nonsense to work around a problem that doesn't exist anywhere else?
      - TheDudeMan 4y ago
        > what problem is it solving? The problem you presented in your original reply -- throughput.
        CyberDildonics 4y ago
        It doesn't solve that because it doesn't increase throughput on the main chain. Why do you think it solves any real problems and how do you think it does that? So far you just keep repeating the same thing without any understanding of what it actually does.
jwmoz 4y ago
Unironically, this is bullish for Bitcoin.
_trackno5 4y ago
If you're worried about "total bank surveillance" (which seems to be most people in this thread), don't. Every single bank you have an account with already has to keep track of know-your-customer information. It's not like the fact that there's a centralized digital currency will give the government more control over you than not. The government can simply tell the banks to hold your assets, put you on a list that prevents payments providers to service you, etc. The digital currency won't make any of that worse. The good thing about digital currencies is that'll actually take power away from commercial banks. Right now you need to go through someone like Barclays, HSBC, etc, to get your money. CBDC actually lets you keep your balance directly with the government ledger and avoid relying on banks for everything. This is a good thing. Beware that commercial banks are obviously opposed to this and will be very vocal about it.
- deleted 4y ago
  [deleted]
- ladon86 4y ago
  Sort of like a bank, only better than a bank because, you know, banks always get knocked off. No-one knocks off Old Rishi.
- gonzo41 4y ago
  Let's not pretend for a second that people are actually looking for privacy whilst they walk around with iphones, with tiktok, facebook, money apps, location tracking fitness apps etc. Anyway, I think governments could regulate better to make payments more of a public infrastructure type deal. The banks will still make a stack of cash on all the other things they do.
  - hcks 4y ago
    Why are people always pretending there is no difference between being tracked by Facebook, and by your government? Facebook’s goal is mostly to make money. Facebook will not put you in jail, or fine you. As bad as you think these companies are, they never committed war, crimes or genocides. There is a massive difference between being tracked by states (who have a monopoly on violence and terrible track records) and advertising firms.
whitehexagon 4y ago
If we want to keep cash, we need to use cash, and dumb phones, slightly less convenient, otherwise we are running into a world where everything is app-tracked to the penny/cent/micro-payment. Mandatory mobile 'smart=spy' phone next to receive such pounds? Wait until there are 'food only pounds' 'heating only pounds' 'nhs pounds' 'pension pounds - geo-fenced?'. The G is being erased from GBP.
- phendrenad2 4y ago
  Ah yes, the average UK grandmother is going to open their bank account and see their various asset classes: "food pounds" "entertainment pounds" "geo-fenced liverpool pounds" and keep track of all that.
ETH_start 4y ago
If this were issued on multiple blockchains, ranging from a government-run permissioned chain, to public blockchains like Ethereum, and if this didn't accompany any elimination of physical cash, but acted instead as an alternative to it, then this would be strictly an improvement in the utility of government-issued currency. The worry is that it would be a substitute/replacement for physical cash, which would mean a massive enabler of private and unregulated economic interaction being eliminated from an already too surveilled/centralized/rigid society.
fwungy 4y ago
Imagine all the lives that could have been saved during the pandemic if governments could have forced people to quarantine and vaccinate by turning off access to peoples' CBDC account. CDBCs are about saving lives, and the planet. /s
- gadflyinyoureye 4y ago
  The WEF makes this claim openly.
- phendrenad2 4y ago
  The government could have frozen their bank accounts, ah, oh well, I'm tired of making the same argument over and over.
Fervicus 4y ago
I met a crypto dev in a bar last summer. He was very secretive about what he actually did. After a few rounds, the only bits I got out of him was that he was working for EU on a secret project that will make cash obsolete.
- phendrenad2 4y ago
  And then what happened?
tpoacher 4y ago
When Deus Ex imagined digital currencies back in 2000, they imagined a "credits" system, where these credits were backed by nothing and were simply numbers in a computer. BUT, critically, they existed independent of accounts or transactions. This enabled one to "load some credits" on a generic cube/card and use it for payments. For a game that was so prophetic on all other aspects of ethics and AI and technological develoments that followed, particularly in terms of surveillance, a currency free from transaction-monitoring/intervention was a very big blind spot in their dystopian vision. I wonder if this simply never occurred to Sheldon Pacotti, or if he specifically believee we'd manage to somehow "liberate" money by then ...
- Izkata 4y ago
  Except that was something that already existed, just in very tight contexts - laundry cards, for example, worked just like that.
- gs17 4y ago
  I'd presume that's for gameplay reasons rather than a genuine prediction. It's much more fun when NPCs can leave money lying around.
deleted 4y ago
[deleted]
ahoya 4y ago
The only positive I see from this is that Britain will quickly miss use this new power, engineering social credit scores and negative interest rates and the rest of the world will see how incompatible it is with freedom and become inoculated against the idea.
odiroot 4y ago
I don't really see a point. Bank transfers are free and near-instant now. What are we to gain from it?
dewey 4y ago
If you are interested in the topic I can recommend Layered Money by Nik Bhatia [1]. I just finished that and it explains how the different currencies evolved and how where they might go. I'm no currency expert, but it seemed like a good starter book to understand where CBDC are fitting in. [1] https://www.goodreads.com/en/book/show/56598876 https://www.goodreads.com/en/book/show/56598876
- fandorin 4y ago
  100 agree, this a great book as a starter!
surume 4y ago
There's something I don't understand: the current system works great. Cash as well as credit cards. So why change that? If they want money to work in essentially the same way, why mutate a system that is extremely resilient and has been battle tested historically? I can only see a nefarious goal here from there side. And no, I don't believe that their privacy policies will hold any water when the government or police come knocking. Can someone convince me otherwise?
- agosta 4y ago
  From a merchant's perspective, Blockchain backed money can reduce the cost of moving money. Typical credit card and ach debits/credits take 3 to 5 business days to settle and cost the merchant over 2% to 3% of every sale (higher for smaller businesses). That means we consumers pay Visa and the other big processors 2% to 3% of nearly everything we by online and in store because merchants - of course - pass those fees onto us. If this CBDC can process payments within a few seconds or minutes (some Blockchains are able to) that's also a huge win for merchants as that means they actually have the funds they need to fulfill orders rather than relying on credit (which also costs $) and having to wait days for all customer's funds to be deposited. Rapid settling times help cut down on fraud - which itself is very costly to businesses (the cost of which is carried by the consumer). So by switching to a quickly settling CBDC, businesses can save time and money - savings that can be passed to consumers. Now, whether they ever do that is another question.
  - phendrenad2 4y ago
    Do you think credit card companies are going to willingly evaporate overnight when CBDCs roll out? People will still pay for everything with payment processors and use credit cards.
    - agosta 4y ago
      As a merchant myself, I would get rid of my credit card processor As Soon As Possible if a viable, inexpensive alternative existed. Obviously they'll fight tooth and nail to survive.
college_physics 4y ago
CBDC's could change our economies (and societies) fairly dramatically. For better or worse. People should not rush to form strong opinions on the basis of low information and prejudices. Practically everything about them is configurable. This is the time to get informed and act as empowered citizens. Shape them for the common good if possible or otherwise reject them. Be suspicious that the risks can be managed when the regulatory failures are legion and regulatory capture endemic to this industry. But consider also that current systems are just a pile of historical inventions and conventions, there is nothing optimal or stable or fair about them.
- phendrenad2 4y ago
  Thanks, I did educate myself and came to the exact opposite conclusion: CBDCs are a pile of nothing and vaporware.
  - college_physics 4y ago
    Maybe we have different concepts of what "education" means. But in any case, I didn't come here to spew low effort vacuities so here is another go: Individuals could with fairly minimal technical changes get central bank accounts here and now. That would already change the universe: Currently all electronic money is private bank money, only as good as the credit of said private entity, which in turn depends on the types of risks it might be taking while you waste your time on HN. With CB accounts some electronic money is sovereign money (like cash). It may get inflated but it will never default. Already that simple "savings" window can upend banking as we now it. Individuals transacting in sovereign money and any other features are all on top of this.
    - phendrenad2 4y ago
      Hm, this ignores several realities, such as central banks getting their money for free from the government. But, I'm not going to nitpick.
      - 4y ago
iamflimflam1 4y ago
I knew it would have to be somewhere... https://www.bankofengland.co.uk/-/media/boe/files/paper/2023/the-digital-pound-consultation-working-paper.pdf https://www.bankofengland.co.uk/-/media/boe/files/paper/2023... Blockchain technology, which underpins many cryptoassets (for example Bitcoin) also represents a major innovation. This introduced digital assets supported and distributed in a peer-to-peer fashion, backed by cryptography alone and stored on an immutable distributed ledger. Smart contracts automate business logic based on pre-determined terms and conditions. The concept pre-dates the emergence of Blockchain and is not exclusive to any specific technology, but their use has been popularised recently by permissionless blockchain technologies such as Ethereum. Developments in smart contracts have led a trend towards 24/7, ‘always on’, automated markets and products, and a wider world of decentralised finance, or ‘DeFi’. DeFi applications use a combination of these technologies, including blockchain and smart contracts, to enable users to buy, swap... Fortunately the accompanying technical note doesn't talk about it too much. https://www.bankofengland.co.uk/-/media/boe/files/paper/2023/the-digital-pound-technology-working-paper.pdf https://www.bankofengland.co.uk/-/media/boe/files/paper/2023...
phendrenad2 4y ago
An observation: People who are angry about CBDCs are almost all non-technical (certainly not the usual HN programmer crowd). Programmers are generally good at seeing how a system actually works, and we realize that CBDCs don't give the government any new power that they don't already have. Also, we don't get confused and somehow think that a CBDC is going to replace paper money (or worse, and even more cyberpunk magical thinking, somehow think that physical money will become a digital computer with a touchscreen and a mind of it's own, looking for dissidents and giving them papercuts).
BitcoinNewsCom 4y ago
Most likely the government will have to ban bitcoin acceptance in order to force people to use the CBDC. Otherwise, it has a hard time to compete. CBDC: - restricted use, max 20k savings - some transactions might be blocked - linked to your identity/credit score - validity might expire (not durable) - a privacy disaster, centralized data will get hacked - total governance and corporate surveillance of your transactions - supply changed arbitrarily - now ownership, account permissioned/granted BITCOIN: - no restrictions, unlimited saving - censorship resistant - not linked with any personal info - no expiration, ultra durable - no personal data stored, can't get hacked - no surveillance if done right - supply is fixed and issuance schedule auditable - true ownership Oh, bitcoin cannot be banned?
brippalcharrid 4y ago
Another risk of CBDCs that I hadn't thought of before will be the temptation for governments to (automatically) impose certain kinds of temporary restrictions on people who aren't individually suspected of a crime but who do match some combination of fuzzy location-based, political, religious, socio-economic, ethnic or health-related filters as a dragnet response to certain events (which the public may not even be aware of). They can then remove these restrictions seconds, minutes or hours later, citing system problems (they could easily push the blame on to the people on the other end of the transaction; they will probably make this a condition of operating CBDC services) or maybe even without acknowledging that restrictions have been in place, and with the details of them being subject to gagging orders and National Security legislation. This could also be gradually smuggled in under ambiguous wording and mission-creep. And then even one major event that made the headlines "that we had the technology to stop!", and which occupied the public consciousness could do a lot to bring people around to the idea that maybe the government should be doing more than just handling payments, and thus changes could be made without announcement once public sentiment had shifted towards tolerating more "proactive safeguarding".
- walterbell 4y ago
  Eagle Eye, The Adjustment Bureau and Person of Interest contain dramatizations of "Glitch-as-a-Service" (GaaS) to alter the probabilities of future-influencing events, e.g. important business meetings. Search terms: precrime predictive policing predictive analysis fraud detection behavioral biometrics Dramatization of future UK news on "smart money", https://www.youtube.com/results?search_query=johnnys+cash+smart+money+nightmare https://www.youtube.com/results?search_query=johnnys+cash+sm... Eagle Eye clip on profiles, https://youtube.com/watch?v=1XQgaqOlEIc https://youtube.com/watch?v=1XQgaqOlEIc
- theandrewbailey 4y ago
  And if people decide to put their CBDC credentials into an RFID chip embedded in their right hands, it reminds me of a book I read once: Revelation.
juujian 4y ago
The question mark at the end of that sentence tells me that this is not happening anytime soon.
Lazare 4y ago
I find these discussions frustrating because the UK pound (like the US dollar, the euro, etc) is already digital. THe overwhelming majority of pounds in the UK are just numbers in a database already. So there's no information being conveyed here by saying "lets have digital pounds". Presumably there's a proposal to add or change something, but you've got to open up the PDF and start skimming to even get a hint of it, because the linked headline and summary is just meaningless. Since the pound is already digital, the obvious path forward is some mixture of a government provided payment app, and/or government forced interoperability between existing payment apps, possibly augmented by government provided bank accounts either for the unbanked or possibly for everyone (cf "postal banking" and "narrow banking"). Looking at the PDF they seem(?) to have something fairly different in mind, but they do a terrible job of explaining why. Or what exactly they're proposing. It's just exhausting trying to engage with a proposal this vapourous.
- walterbell 4y ago
  The centralization inherent to CBDCs will lower costs and enable transaction-level kill switches that can be customized to human behavioral profiles. Previous CBDC threads: https://news.ycombinator.com/item?id=30634245 https://news.ycombinator.com/item?id=30634245 (2022) & https://news.ycombinator.com/item?id=27805709 https://news.ycombinator.com/item?id=27805709 (2021)
- cryptonector 4y ago
  > Presumably there's a proposal to add or change something, ... Presumably the change in question has to be to stop printing cash and minting coins and forbid cash transactions. There may be some cryptocurrency-like features too (sans anonymity), but I imagine that credit card processors won't like that.
  - Lazare 4y ago
    Again though, the dollars (and pound, and euro) are already overwhelmingly digital. I already don't carry cash on me, and make payments digitally. You don't need a new currency to allow removal of cash.
notShabu 4y ago
A digital central bank currency seems more like a refactoring of an existing setup rather than something radically new. Since the policies of 2008, bank IOUs and central bank IOUs are basically the same since the central bank backs up all the other banks. 100 dollars held at Bank of America as "this is how much the bank owes me" is functionally the same as "this is how much the fed owes me" In theory, private banks would've created a diverse ecosystem where bad or incompetent banks would get washed out leading to a stronger and more efficient private banking sector. In practice, they all needed to be saved. The resulting rules like lending standards coupled with existing regulation like KYC means that banks already act like arms of the central bank. It's possible a CBDC just cuts out the middlemen so there could be benefits like lower interest rates on loans. There is concern with privacy and centralization of course, but that's not specific to the CBDC idea or tech and has already existed in a form for some time (e.g. canada trucking bank freezes)
sershe 4y ago
I'd be really receptive to CBDCs if the blockchain was completely open with no impediment to chain analysis, and all elected politicians or those employed in the public service above a certain level were restricted from any other money for anything. With a stipulation that for them, as much as buying a coffee with any other form of money would mean automatic let's say 5 year minimum sentence with no way to wiggle out of it/get pardoned/get early release/... Aside from obvious benefits, it would also ensure CBDC implementations are really convenient to use, and any issues are resolved pronto.
lifeisstillgood 4y ago
Just realised they don't seem to mention open source at all. I am mostly positive about the idea, I do not fancy programmable money (that's a layer on top not inbuilt in my view) and yet a government coded proprietary system? Hmmm

182 points by thm 4y ago

adastra22 4y ago

They could have called it "Britcoin" but didn't.

totetsu 4y ago
Gez
- itronitron 4y ago
  How about just 'Quoin' then?
toyg 4y ago
That's what everyone in the press is calling it anyway.
pringk02 4y ago
Brits love puns like this so there is no way it is not going to get called this colloquially

toyg 4y ago

Betteridge's law of headlines strikes again. Completely self-inflicted too!

dbbk 4y ago
Not really?

danuker 4y ago

What advantage would I have as a user of a "digital pound", compared to a regular bank account? Increased surveillance? Money with an expiration date?

Neil44 4y ago
According to the PDF, the digital pound is issued by and backed by the bank of england and as such is classed as 'public money' in the same way as cash. You don't need to go begging to a private institution for the privilage of holding a bank account to hold your 'private money' which is effectively backed by the private bank. Private bank goes away, private money goes away. If private banks decide they don't like you any more your life becomes very difficult. As physical cash goes away the digital pound is meant to plug that gap, plus a load of other things I probably don't understand.
- danuker 4y ago
  > As physical cash goes away Ah. I see where this is going now.
- robertlagrant 4y ago
  > If private banks decide they don't like you any more your life becomes very difficult. Just wait and see what happens to your life if the state decides it doesn't like you.
  - imtringued 4y ago
    You go to jail?
    - throwaway98797 4y ago
      the broader point here is with digital money things that would require discretion become automated which is the dystopia people fear think about it, the vast majority of people break speeding laws. we are okay and on good days trust the cops to stop reckless drivers but let the morning commuters go. apply the same logic to minor financial crimes
      - RealityVoid 4y ago
        I'm sorry, I fail to imagine how this dystopia people are talking is any different than the current times. I feel people are assigning _way too much_ importance to the changes this will bring. Kind of how people assigned way too much importance to the changes cryptocurrency will bring. When crypto was young, really young, a lot of backers saw in it the brainchild of their favourite political system, the thing that will save them for tyranny. They just impregnated it with their wishes and desires. Well, I think that was silly. And in the same way, I think impregnating cbdc's with all their fears is just as silly.

proaralyst 4y ago

What I'm hoping comes out of this is some backstop for the ~4 million Brits with no bank account in our increasingly cashless society. What I'm worrying will come out of this is pound-on-blockchain with no real effort to serve the currently-unbanked. Also worth pointing out that the Pound (like every major fiat currency) is already digital: my bank account is stored in a computer, my payments are all electronic. Sure we still have paper notes but banks aren't backing their deposits with a big stack of those in a vault anywhere.

robertlagrant 4y ago
I thought this was more about currency than bank accounts.
- makeitdouble 4y ago
  I think this is a side effect. To use digital currency I assume you’ll need some kind of account, as it will probably rely on some stable identifier. Baking identification in a device (a card for instance) could be an alternative, but past some amount it would probably be impractical and I’d see banks limiting the amount that can move outside of them.
  - robertlagrant 4y ago
    I don't see how this would make unbanked people into banked people, though?
    - makeitdouble 4y ago
      Depends on what you mean by “banked” and how it’s implemented. If for instance, as a bare minimum they can get money from their job transferred in and can pay bills and rent from there, it would already fill the core job of a bank account. Now I’d assume even the simplest system would be managed by banks as a new product, with technically an account bound to it. A bit like C-Zam, N26 and other “banking light” initiative that euro banks have been trying out lately. But lighter alternatives would sure pop up.

no_time 4y ago

Can someone with optimism and enthusiasm about CBDCs enlighten me how will this NOT devolve into a totalitarian dystopia with "programmed" money that can control the population down to the individual level?

deleted 4y ago
[deleted]
f6v 4y ago
You don’t need to control an individual. You need to control the population as a whole. Which governments do now, with taxes and other policies.
- yownie 4y ago
  well met, nothing you just wrote addresses what OP asked.
- no_time 4y ago
  >You don’t need to control an individual. People who lived in Warsaw pact countries where you could only buy meat with a "ticket" would disagree with this. There is a very real desire in the ruling class to be this invasive.
  - jevgeni 4y ago
    ... in a planned economy.
    - thepangolino 4y ago
      [dead]
    - tastyfreeze 4y ago
      Which is the inevitable result of a CBDC. There is no way that a government can resist the temptation of control that CBDCs permit.
    - 4y ago

lucasfcosta 4y ago

Having lived in Britain I’m always surprised by how much the average British citizen doesn’t mind the absurd level of surveillance forced upon them.

the_other 4y ago
Some of us mind; personally I'm lost on how to deal with it. Speaking to my MP doesn't seem to have any effect: they mostly tow party lines. Voting for parties I feel more aligned with doesn't work: they're too small to move the needle. We've been caught in a two-party system for as long as I can remember (since the 80s).
coremoff 4y ago
the UK population is quite authoritarian, and there are a significant number of the electorate who are quite happy to suffer enormous privation if it means that people in the out-group suffer worse.
kypro 4y ago
Over the last year or so all supermarkets in the UK have installed biometric facial recognition cameras at checkout. It's not subtle either – it's literally a HD video camera in your face. So I started covering the checkout cameras and covering my face in supermarkets, but everyone thinks I'm overreacting. I guess I don't really get it. Am I suppose to be fine with this? This isn't some passive CCTV system, it's literally a camera pointed at my face to identify me christ sake. And this stuff happens to me a lot here... I often refuse to give email addresses and number phones, but I get treated as if I'm the one being obstructive. The only exception seems to be if I'm talking about Facebook or Google, then people suddenly seem to care about their privacy, but in the real world there's no regard for privacy at all.
- TeaDude 4y ago
  Oh, that's what those are! I thought it was just a crappy video feed to try and deter theft. Much like all they eye symbols on security camera warning signs. "As if they'd actually get some poor sod to sift through all the footage to prove that you didn't pay for a packet of crisps!"

jasebell 4y ago

Do away with cash and track everything. It's not a good look.

neffy 4y ago

This is a fairly major economic intervention if they go ahead with it. The big difference (in the report they refer to this as private vs public money), is that they are proposing to issue the equivalent of cash, i.e. Asset money, "public money", rather than the liability deposits, "private money" that are created by the commercial banks, when loans are created, and removed when they are repaid, or defaulted on. The vast majority of transactions today, use bank deposits, "private" money in this rather loaded nomenclature. Because Economics has never really come to grips with how the banking system actually works, there has long been a movement there to replaced the current monetary system, with something that doesn't create and destroy money all the time. Amongst other things, I have seen economists advocate for this, because they believe it would mean that their mathematical models would work properly on the real economy. It is hard to know what the actual economic impact would be, but it is to put it mildly, a little irresponsible to experiment with the production system like this.

jevgeni 4y ago
No it's not. Different types of money is common terminology. Also, no idea how "Economics has never really come to grips with the banking system" - there's enough research and understanding on this.
- throwaway290 4y ago
  Oh yeah, economics. Such a well researched field, so much consensus.
  - jevgeni 4y ago
    The banking system IS well researched. STEM fields also have lack of consensus on different topics.
    - throwaway290 4y ago
      Whataboutism. It's not about STEM a lot of which is abstract and of no direct consequence (especially where there is no consensus) but about something that can impact society and livelihoods directly in unknown ways.

Wildgoose 4y ago

I think the most interesting possibility of a "digital pound" is that it would enable money creation to only be carried out by the Bank of England; it would undermine the ability of regular banks to just create money by issuing loans backed up by nothing more than minimum reserve requirements.

eldenwrong 4y ago
Are there still reserve requirements in the UK? The US removed those
zirgs 4y ago
I doubt that BoE is going to start issuing loans. That's not what central banks do.

Bo0kerDeWitt 4y ago

A disappointing development to be honest. This is one more way the government can exert control over the people. The downsides risks are horrendous. I haven't yet read this publication in full, but last year I did read the House of Lords Economic Affairs Committee paper on the topic[1]. The title was quite telling: "Central bank digital currencies: a solution in search of a problem?" This was authored by Lord King, the former governor of the BoE, amongst others. It seems the current BoE is taking a different course. [1] https://publications.parliament.uk/pa/ld5802/ldselect/ldeconaf/131/131.pdf https://publications.parliament.uk/pa/ld5802/ldselect/ldecon...

garyclarke27 4y ago
More than disappointing - this is terrifying - even worse than China's social credit scoring on New Zealand's Cigarette prohibition. This would enable governments to monitor and control literally every penny you spend or recieve. I wrote a blogpost explaining who money currently works and warning about this development. https://www.onedb.online/blog/what_is_money https://www.onedb.online/blog/what_is_money
- Spooky23 4y ago
  We already have had this with credit cards, drafts in various forms and crypto. All this would do is get rid of the middleman and the defacto tax assessed on all commerce, both direct or indirect through sale of data.
- f38zf5vdt 4y ago
  It will cause people to stop using government money. There are many other ways to barter and exchange goods. I expect it will only increase tax evasion as less transactions are even reported. It's no surprise to me to see government gold buying on an absolute tear. [1] The powers that be are well aware of the importance of having real physical goods for the sake of trading and maintaining wealth. [1] https://financialpost.com/commodities/mining/central-banks-buy-gold-fastest-pace-55-years https://financialpost.com/commodities/mining/central-banks-b...

H8crilA 4y ago

The pound is already digital. Printed or minted currency is a small minority of the entire money supply, regardless if how you count the money supply. Most of the base currency is a digital record at the central bank.

dzonga 4y ago

the question for me: is how would this translate to banks growing the money supply ? if now retail consumers are plugged into the central bank ?

traceroute66 4y ago

"The digital pound" ... otherwise known as Pornhub. ;-) (For those who don't follow British slang, to pound or give someone a pounding, I'll leave it to your imagination)

radu_floricica 4y ago

No comment so far has touched on the big issue. This is a direct competition to the big turtle the retail world is sitting on: Visa and Mastercard. They're taking a cut out of everything that happens, not doing a whole lot of innovation, and have exactly the high degree of control people are fearing in a totalitarian CBDC. They'll very likely dislike this and will probably lobby against it (well, as much as what entities with their net worth can be said to "lobby").

throwaway98797 4y ago
the value that visa brings is gamifying spending plus amazing fraud protection i’m so much more comfortable buying from random online websites because visa has my back yes i know we collectively play 2.5% for that privilege, but seems worth it to me.
- TimJRobinson 4y ago
  The government could provide similar chargebacks with a CBDC. Whether their customer service would be any good remains to be seen.
febeling 4y ago
Visa and Mastercard are issued through a multitude of providers. OBDC will have central control. It is beyond me how anyone can argue for that, after seeing again and again how governments fails in almost everything repeatedly. At least have two options to chose from.

mypastself 4y ago

Since CBDCs came about as a direct response to the rise of Bitcoin, I wonder if cryptocurrencies’ most lasting contribution might (paradoxically) be the acceleration towards full government surveillance and control over the populace’s financial transactions.

zirgs 4y ago
CBDC transaction history isn't public. And only one government can see it. They will also need a warrant for that. Bitcoin and most other cryptos are much worse, because their blockchains are public. Everyone can see every transaction. No warrants required or anything like that.
- mypastself 4y ago
  You’re relying on several assumptions here, not all of which are fully defensible in my view: There’s no such thing as a private cryptocurrency. Uncensorability is not an important characteristic of cryptocurrencies. CBDCs will only be used by democratic governments. Governments considered democratic always follow the letter and spirit of their own laws.
- JumpCrisscross 4y ago
  > only one government can see it. They will also need a warrant for that These are all assumptions. The former is safe. The latter, unlikely. (Particularly in the U.K.)
  - mywittyname 4y ago
    At least the people are able to vote for those who write the rules for the government. If people want to ensure a warrant is required, then they can push for it by voting for candidates that will enshrine that requirement into law and put into a place audits that ensure compliance. It's a lot more difficult to get the same results from a private entity who has a financial incentive to skirt laws.
    - 4y ago

TeaDude 4y ago

On one hand: I am sick of banks and pseudo banks (Paypal, Stripe etc.) fucking about the digital payments space. On the other hand: I am 100% sure that the UK govt will reimplement these hurdles and add their own.

zirgs 4y ago
The USA should finally start regulating PayPal as a bank. PayPal is legally a bank in the EU and is regulated as such.

deleted 4y ago

[deleted]

OJFord 4y ago

Excerpt from p19: > Embedded finance is an innovation that could shape the retail payments experience. This is where financial services, and in particular payments, are integrated into another industry’s service, function or feature. Examples include, ‘one-click’ purchases of goods via social media platforms, ‘in-game’ payments or, in the future, marketplaces and transactions in the metaverse. Does the author question that or realise what they're writing at all, or is it just a case of researching and regurgitating buzzwords? 'The metaverse'... it should be a defined term, and then removed from the document because they realise it doesn't mean anything, or that you can't define it in a sensible way that '[future] transactions in the metaverse' isn't just me shopping on amazon.co.uk today. I do slightly envy working on something with 3y of technical design (after a year of research to give it the go ahead) before anything gets built though. Perhaps that's too much, but a middle ground, or I envy some aspects of it.

gilleain 4y ago
> 'The metaverse'... it should be a defined term From what I've seen so far, 'shopping in the Metaverse' means 'like Amazon, but in 3D!'. So, filling a virtual shopping cart (with virtual wonky wheel?) with virtual items in VR... I could be wrong, but like many things in a Metaverse, it seems not just pointless but actively worse than the experience of '2D' shopping in a normal website.
- OJFord 4y ago
  Yes, but it's just not a relevant distinction for the purposes here is it? It's just online/in-app payments, the way the website/app is rendered is completely irrelevant.
  - gilleain 4y ago
    Totally agree :) I don't see any distinction between buying products in a Metaverse or other similar VR environment, and clicking on 'Add to cart' in a website. Indeed there is often no difference between buying online and IRL. If I go into a physical store and buy something to be delivered, this is rarely different to doing the same online. Fraud is a possible distinction, but otherwise ...

tumetab1 4y ago

tl;dr summary: The paper is not about blockchain just an upgrade of how money is transferred between bank/payments operators customers... a Revolut for the whole country. Money/Currency rules are the same. Access to network is the same (customers banks use banks apps)

neilv 4y ago

Judging from the ridiculous cookie consent dialog, do they even want people to read this page (which invites public input)?

TheDudeMan 4y ago

Humans, get on bitcoin before it's too late.

CyberDildonics 4y ago
That's the one with 1 KB/s of throughput for the whole world right? A single 28.8 modem's bandwidth for the transactions of billions of people. https://bitinfocharts.com/comparison/size-btc.html#1y https://bitinfocharts.com/comparison/size-btc.html#1y And before anyone says "lightning network" realize that that's like playing catch in your back yard and thinking you're going to pad your major league baseball lifetime stats. You could also say it's like passing IOUs back and forth with a friend.
- TheDudeMan 4y ago
  Lightning network. Plus all of the other layer 2 networks that would like to play.
  - CyberDildonics 4y ago
    The lightning network what? You can't just repeat something and magically expect it to work. It has been 8 years, what problem is it solving? Transactions still have to make it on the chain to count. No other cryptocurrency has this problem. Why would be people try to go through convoluted nonsense to work around a problem that doesn't exist anywhere else?
    - TheDudeMan 4y ago
      > what problem is it solving? The problem you presented in your original reply -- throughput.
      - CyberDildonics 4y ago
        It doesn't solve that because it doesn't increase throughput on the main chain. Why do you think it solves any real problems and how do you think it does that? So far you just keep repeating the same thing without any understanding of what it actually does.

jwmoz 4y ago

Unironically, this is bullish for Bitcoin.

_trackno5 4y ago

If you're worried about "total bank surveillance" (which seems to be most people in this thread), don't. Every single bank you have an account with already has to keep track of know-your-customer information. It's not like the fact that there's a centralized digital currency will give the government more control over you than not. The government can simply tell the banks to hold your assets, put you on a list that prevents payments providers to service you, etc. The digital currency won't make any of that worse. The good thing about digital currencies is that'll actually take power away from commercial banks. Right now you need to go through someone like Barclays, HSBC, etc, to get your money. CBDC actually lets you keep your balance directly with the government ledger and avoid relying on banks for everything. This is a good thing. Beware that commercial banks are obviously opposed to this and will be very vocal about it.

deleted 4y ago
[deleted]
ladon86 4y ago
Sort of like a bank, only better than a bank because, you know, banks always get knocked off. No-one knocks off Old Rishi.
gonzo41 4y ago
Let's not pretend for a second that people are actually looking for privacy whilst they walk around with iphones, with tiktok, facebook, money apps, location tracking fitness apps etc. Anyway, I think governments could regulate better to make payments more of a public infrastructure type deal. The banks will still make a stack of cash on all the other things they do.
- hcks 4y ago
  Why are people always pretending there is no difference between being tracked by Facebook, and by your government? Facebook’s goal is mostly to make money. Facebook will not put you in jail, or fine you. As bad as you think these companies are, they never committed war, crimes or genocides. There is a massive difference between being tracked by states (who have a monopoly on violence and terrible track records) and advertising firms.

whitehexagon 4y ago

If we want to keep cash, we need to use cash, and dumb phones, slightly less convenient, otherwise we are running into a world where everything is app-tracked to the penny/cent/micro-payment. Mandatory mobile 'smart=spy' phone next to receive such pounds? Wait until there are 'food only pounds' 'heating only pounds' 'nhs pounds' 'pension pounds - geo-fenced?'. The G is being erased from GBP.

phendrenad2 4y ago
Ah yes, the average UK grandmother is going to open their bank account and see their various asset classes: "food pounds" "entertainment pounds" "geo-fenced liverpool pounds" and keep track of all that.

ETH_start 4y ago

If this were issued on multiple blockchains, ranging from a government-run permissioned chain, to public blockchains like Ethereum, and if this didn't accompany any elimination of physical cash, but acted instead as an alternative to it, then this would be strictly an improvement in the utility of government-issued currency. The worry is that it would be a substitute/replacement for physical cash, which would mean a massive enabler of private and unregulated economic interaction being eliminated from an already too surveilled/centralized/rigid society.

fwungy 4y ago

Imagine all the lives that could have been saved during the pandemic if governments could have forced people to quarantine and vaccinate by turning off access to peoples' CBDC account. CDBCs are about saving lives, and the planet. /s

gadflyinyoureye 4y ago
The WEF makes this claim openly.
phendrenad2 4y ago
The government could have frozen their bank accounts, ah, oh well, I'm tired of making the same argument over and over.

Fervicus 4y ago

I met a crypto dev in a bar last summer. He was very secretive about what he actually did. After a few rounds, the only bits I got out of him was that he was working for EU on a secret project that will make cash obsolete.

phendrenad2 4y ago
And then what happened?

tpoacher 4y ago

When Deus Ex imagined digital currencies back in 2000, they imagined a "credits" system, where these credits were backed by nothing and were simply numbers in a computer. BUT, critically, they existed independent of accounts or transactions. This enabled one to "load some credits" on a generic cube/card and use it for payments. For a game that was so prophetic on all other aspects of ethics and AI and technological develoments that followed, particularly in terms of surveillance, a currency free from transaction-monitoring/intervention was a very big blind spot in their dystopian vision. I wonder if this simply never occurred to Sheldon Pacotti, or if he specifically believee we'd manage to somehow "liberate" money by then ...

Izkata 4y ago
Except that was something that already existed, just in very tight contexts - laundry cards, for example, worked just like that.
gs17 4y ago
I'd presume that's for gameplay reasons rather than a genuine prediction. It's much more fun when NPCs can leave money lying around.

deleted 4y ago

[deleted]

ahoya 4y ago

The only positive I see from this is that Britain will quickly miss use this new power, engineering social credit scores and negative interest rates and the rest of the world will see how incompatible it is with freedom and become inoculated against the idea.

odiroot 4y ago

I don't really see a point. Bank transfers are free and near-instant now. What are we to gain from it?

dewey 4y ago

If you are interested in the topic I can recommend Layered Money by Nik Bhatia [1]. I just finished that and it explains how the different currencies evolved and how where they might go. I'm no currency expert, but it seemed like a good starter book to understand where CBDC are fitting in. [1] https://www.goodreads.com/en/book/show/56598876 https://www.goodreads.com/en/book/show/56598876

fandorin 4y ago
100 agree, this a great book as a starter!

surume 4y ago

There's something I don't understand: the current system works great. Cash as well as credit cards. So why change that? If they want money to work in essentially the same way, why mutate a system that is extremely resilient and has been battle tested historically? I can only see a nefarious goal here from there side. And no, I don't believe that their privacy policies will hold any water when the government or police come knocking. Can someone convince me otherwise?

agosta 4y ago
From a merchant's perspective, Blockchain backed money can reduce the cost of moving money. Typical credit card and ach debits/credits take 3 to 5 business days to settle and cost the merchant over 2% to 3% of every sale (higher for smaller businesses). That means we consumers pay Visa and the other big processors 2% to 3% of nearly everything we by online and in store because merchants - of course - pass those fees onto us. If this CBDC can process payments within a few seconds or minutes (some Blockchains are able to) that's also a huge win for merchants as that means they actually have the funds they need to fulfill orders rather than relying on credit (which also costs $) and having to wait days for all customer's funds to be deposited. Rapid settling times help cut down on fraud - which itself is very costly to businesses (the cost of which is carried by the consumer). So by switching to a quickly settling CBDC, businesses can save time and money - savings that can be passed to consumers. Now, whether they ever do that is another question.
- phendrenad2 4y ago
  Do you think credit card companies are going to willingly evaporate overnight when CBDCs roll out? People will still pay for everything with payment processors and use credit cards.
  - agosta 4y ago
    As a merchant myself, I would get rid of my credit card processor As Soon As Possible if a viable, inexpensive alternative existed. Obviously they'll fight tooth and nail to survive.

college_physics 4y ago

CBDC's could change our economies (and societies) fairly dramatically. For better or worse. People should not rush to form strong opinions on the basis of low information and prejudices. Practically everything about them is configurable. This is the time to get informed and act as empowered citizens. Shape them for the common good if possible or otherwise reject them. Be suspicious that the risks can be managed when the regulatory failures are legion and regulatory capture endemic to this industry. But consider also that current systems are just a pile of historical inventions and conventions, there is nothing optimal or stable or fair about them.

phendrenad2 4y ago
Thanks, I did educate myself and came to the exact opposite conclusion: CBDCs are a pile of nothing and vaporware.
- college_physics 4y ago
  Maybe we have different concepts of what "education" means. But in any case, I didn't come here to spew low effort vacuities so here is another go: Individuals could with fairly minimal technical changes get central bank accounts here and now. That would already change the universe: Currently all electronic money is private bank money, only as good as the credit of said private entity, which in turn depends on the types of risks it might be taking while you waste your time on HN. With CB accounts some electronic money is sovereign money (like cash). It may get inflated but it will never default. Already that simple "savings" window can upend banking as we now it. Individuals transacting in sovereign money and any other features are all on top of this.
  - phendrenad2 4y ago
    Hm, this ignores several realities, such as central banks getting their money for free from the government. But, I'm not going to nitpick.
    - 4y ago

iamflimflam1 4y ago

I knew it would have to be somewhere... https://www.bankofengland.co.uk/-/media/boe/files/paper/2023/the-digital-pound-consultation-working-paper.pdf https://www.bankofengland.co.uk/-/media/boe/files/paper/2023... Blockchain technology, which underpins many cryptoassets (for example Bitcoin) also represents a major innovation. This introduced digital assets supported and distributed in a peer-to-peer fashion, backed by cryptography alone and stored on an immutable distributed ledger. Smart contracts automate business logic based on pre-determined terms and conditions. The concept pre-dates the emergence of Blockchain and is not exclusive to any specific technology, but their use has been popularised recently by permissionless blockchain technologies such as Ethereum. Developments in smart contracts have led a trend towards 24/7, ‘always on’, automated markets and products, and a wider world of decentralised finance, or ‘DeFi’. DeFi applications use a combination of these technologies, including blockchain and smart contracts, to enable users to buy, swap... Fortunately the accompanying technical note doesn't talk about it too much. https://www.bankofengland.co.uk/-/media/boe/files/paper/2023/the-digital-pound-technology-working-paper.pdf https://www.bankofengland.co.uk/-/media/boe/files/paper/2023...

phendrenad2 4y ago

An observation: People who are angry about CBDCs are almost all non-technical (certainly not the usual HN programmer crowd). Programmers are generally good at seeing how a system actually works, and we realize that CBDCs don't give the government any new power that they don't already have. Also, we don't get confused and somehow think that a CBDC is going to replace paper money (or worse, and even more cyberpunk magical thinking, somehow think that physical money will become a digital computer with a touchscreen and a mind of it's own, looking for dissidents and giving them papercuts).

BitcoinNewsCom 4y ago

Most likely the government will have to ban bitcoin acceptance in order to force people to use the CBDC. Otherwise, it has a hard time to compete. CBDC: - restricted use, max 20k savings - some transactions might be blocked - linked to your identity/credit score - validity might expire (not durable) - a privacy disaster, centralized data will get hacked - total governance and corporate surveillance of your transactions - supply changed arbitrarily - now ownership, account permissioned/granted BITCOIN: - no restrictions, unlimited saving - censorship resistant - not linked with any personal info - no expiration, ultra durable - no personal data stored, can't get hacked - no surveillance if done right - supply is fixed and issuance schedule auditable - true ownership Oh, bitcoin cannot be banned?

brippalcharrid 4y ago

Another risk of CBDCs that I hadn't thought of before will be the temptation for governments to (automatically) impose certain kinds of temporary restrictions on people who aren't individually suspected of a crime but who do match some combination of fuzzy location-based, political, religious, socio-economic, ethnic or health-related filters as a dragnet response to certain events (which the public may not even be aware of). They can then remove these restrictions seconds, minutes or hours later, citing system problems (they could easily push the blame on to the people on the other end of the transaction; they will probably make this a condition of operating CBDC services) or maybe even without acknowledging that restrictions have been in place, and with the details of them being subject to gagging orders and National Security legislation. This could also be gradually smuggled in under ambiguous wording and mission-creep. And then even one major event that made the headlines "that we had the technology to stop!", and which occupied the public consciousness could do a lot to bring people around to the idea that maybe the government should be doing more than just handling payments, and thus changes could be made without announcement once public sentiment had shifted towards tolerating more "proactive safeguarding".

walterbell 4y ago
Eagle Eye, The Adjustment Bureau and Person of Interest contain dramatizations of "Glitch-as-a-Service" (GaaS) to alter the probabilities of future-influencing events, e.g. important business meetings. Search terms: precrime predictive policing predictive analysis fraud detection behavioral biometrics Dramatization of future UK news on "smart money", https://www.youtube.com/results?search_query=johnnys+cash+smart+money+nightmare https://www.youtube.com/results?search_query=johnnys+cash+sm... Eagle Eye clip on profiles, https://youtube.com/watch?v=1XQgaqOlEIc https://youtube.com/watch?v=1XQgaqOlEIc
theandrewbailey 4y ago
And if people decide to put their CBDC credentials into an RFID chip embedded in their right hands, it reminds me of a book I read once: Revelation.

juujian 4y ago

The question mark at the end of that sentence tells me that this is not happening anytime soon.

Lazare 4y ago

I find these discussions frustrating because the UK pound (like the US dollar, the euro, etc) is already digital. THe overwhelming majority of pounds in the UK are just numbers in a database already. So there's no information being conveyed here by saying "lets have digital pounds". Presumably there's a proposal to add or change something, but you've got to open up the PDF and start skimming to even get a hint of it, because the linked headline and summary is just meaningless. Since the pound is already digital, the obvious path forward is some mixture of a government provided payment app, and/or government forced interoperability between existing payment apps, possibly augmented by government provided bank accounts either for the unbanked or possibly for everyone (cf "postal banking" and "narrow banking"). Looking at the PDF they seem(?) to have something fairly different in mind, but they do a terrible job of explaining why. Or what exactly they're proposing. It's just exhausting trying to engage with a proposal this vapourous.

walterbell 4y ago
The centralization inherent to CBDCs will lower costs and enable transaction-level kill switches that can be customized to human behavioral profiles. Previous CBDC threads: https://news.ycombinator.com/item?id=30634245 https://news.ycombinator.com/item?id=30634245 (2022) & https://news.ycombinator.com/item?id=27805709 https://news.ycombinator.com/item?id=27805709 (2021)
cryptonector 4y ago
> Presumably there's a proposal to add or change something, ... Presumably the change in question has to be to stop printing cash and minting coins and forbid cash transactions. There may be some cryptocurrency-like features too (sans anonymity), but I imagine that credit card processors won't like that.
- Lazare 4y ago
  Again though, the dollars (and pound, and euro) are already overwhelmingly digital. I already don't carry cash on me, and make payments digitally. You don't need a new currency to allow removal of cash.

notShabu 4y ago

A digital central bank currency seems more like a refactoring of an existing setup rather than something radically new. Since the policies of 2008, bank IOUs and central bank IOUs are basically the same since the central bank backs up all the other banks. 100 dollars held at Bank of America as "this is how much the bank owes me" is functionally the same as "this is how much the fed owes me" In theory, private banks would've created a diverse ecosystem where bad or incompetent banks would get washed out leading to a stronger and more efficient private banking sector. In practice, they all needed to be saved. The resulting rules like lending standards coupled with existing regulation like KYC means that banks already act like arms of the central bank. It's possible a CBDC just cuts out the middlemen so there could be benefits like lower interest rates on loans. There is concern with privacy and centralization of course, but that's not specific to the CBDC idea or tech and has already existed in a form for some time (e.g. canada trucking bank freezes)

sershe 4y ago

I'd be really receptive to CBDCs if the blockchain was completely open with no impediment to chain analysis, and all elected politicians or those employed in the public service above a certain level were restricted from any other money for anything. With a stipulation that for them, as much as buying a coffee with any other form of money would mean automatic let's say 5 year minimum sentence with no way to wiggle out of it/get pardoned/get early release/... Aside from obvious benefits, it would also ensure CBDC implementations are really convenient to use, and any issues are resolved pronto.

lifeisstillgood 4y ago

Just realised they don't seem to mention open source at all. I am mostly positive about the idea, I do not fancy programmable money (that's a layer on top not inbuilt in my view) and yet a government coded proprietary system? Hmmm