6 ms·

Britons face 20k digital pound cap under Bank of England plan

15 points by jermaustin1 4y ago

Khelavaster 4y ago
What's a digital pound, as opposed to a pound that exists digitally....I feel like this article isn't talking about unprinted currency? This sloppy language sounds like it's concealing some critical flaw in a new currency scheme..
- jermaustin1 4y ago
  Honestly, I posted this because I cannot find any detailed articles about it, and was hoping SOMEONE on HN might have more information they could comment.
  - lesuorac 4y ago
    The article links out to BoE's own paper. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1134845/CBDC_WEB_PDF_-_7_FEB_2023_1130am.pdf https://assets.publishing.service.gov.uk/government/uploads/...
- throwaway4aday 4y ago
  They don't bother explaining that it is a CBDC (Central Bank Digital Currency) which is essentially just a ledger built on a blockchain but fully centralized. So instead of using some independent bank's ledger which settles with other banks or gives out cash you have a single system with complete oversight. This is only useful if it eventually replaces the other options. My question is, if there are balance limits from the beginning causing overages to be "swept" out of the system and into a bank account, what happens when there's no longer an external bank account to sweep the funds into?
  - thoughtstheseus 4y ago
    Individuals cannot hold DCBC assets except through a commercial bank. For the cash sweep the commercial bank could mail you a check? Or hold cash in a simple escrow account?
  - Khelavaster 4y ago
    Thanks so much for this!
pjkundert 4y ago
CBDCs such as the proposed BritCoin, which implement programmable suicide pacts (holding caps, limits on what can be purchased/sold) must be rejected. You have 2 choices — and one of them isn’t to not use “Crypto”. Your choices are: - do I hold only government controlled Cryptocurrencies, or - do I hold Cryptocurrency that I control, and cannot be destroyed by my government at their whim?
- deleted 4y ago
  [deleted]
- ihatepython 4y ago
  You are a fool if you think the government will allow any other cryptocurrency that they do not control.
  - pjkundert 4y ago
    Well, I’d rather be considered a fool and give my children a chance to be free, than be considered wise and force them to live as slaves.
    - ihatepython 4y ago
      If you want your children to be free, then the solution is to eliminate direct taxation. "No taxation without representation" was one of the slogans of the American Revolution. The problem is taxation. A digital currency allows the government to tax everything you do. Government will simply confiscate any digital currency that competes with theirs.
beardyw 4y ago
My bank currently gives me a debit card, supports online account to account transfers, direct debits, standing orders. Presumably with crypto they will offer just the same. How will my life change?
- LatteLazy 4y ago
  Well if you are the governor or a senior manager at the BoE your life has already been changed by all the trips to the Bahamas to "fact find". But if not, it won't change your life at all...
- hypomanic 4y ago
  It's always wild to me people think the current system is good. When you deposit money is a bank, you no longer own the money directly. You own an IOU from the bank (i.e., you're extending the bank a loan) and then they are free to loan out your money in the form of mortgages, car loans, whatever. The key point is that under the current system, it's impossible to just own digital money directly! You can only be a creditor to a mortgage-lending company! This is completely crazy. What if I don't want my digital money to be loaned out to mortgages of various risk levels? FDIC insurance (in the US at least) is an attempt to fix this janky system with even more confusing jankiness (better not exceed 250k of digital money in the same account, e.g.). If I could just own digital money directly, FDIC insurance wouldn't make any sense. What am I being insured against?? Blockchains finally make it so everyone can just own their digital money directly, without being forced to instead be creditors to mortgage-lending companies.
  - beardyw 4y ago
    Oh, and I get a small amount of interest too. And money back on bills. Still not sure having my money sitting on a blockchain is better.
    - hypomanic 4y ago
      Loaning your money out to someone who's going to loan it out to homebuyers is still an option, just not the only option.
realce 4y ago
> Money above the cap would be "swept" into a customer's commercial bank account given that a digital pound would not be a means for storing wealth, he told members of UK Finance, a banking industry body. So digital money that can be destroyed at-will by the central government AND it's not even a "store of wealth" now? What possible positive use would anyone currently without wealth want with this garbage? People of the UK need to get out from under this ASAP.
- lockhouse 4y ago
  That’s the point, us serfs are supposed to own nothing and be happy. That should be just enough money to pay for leases, rents, and subscriptions. Only the elite wealthy overlords are supposed to own things and store wealth.
- thoughtstheseus 4y ago
  I did not notice anything being destroyed, can you elaborate? DCBC can be used to protect those with low income/wealth from inflation, offering tiered interest rates. It can be a tool for direct government subsidies & taxation.
  - 2Gkashmiri 4y ago
    why cant those all "features" be implemented to your savings bank account?
LatteLazy 4y ago
This project seems like a huge mess. What exactly is the "risk" to individuals that needs to be managed if the currency is backed by the BoE and Stable? Also, no anonymity. Also, not decentralised. Also, the central bank can create and destroy or freeze money at any point including just your account. Also, total access to the police and 101 other orgs without any need for warrants etc. Also, you will need a bank to access this (so what's the point at all really?) So after all this time and energy, the bank of england has invented... bank accounts. Only with more latency and no interest and a cap on balances.
- 2Gkashmiri 4y ago
  >So after all this time and energy, the bank of england has invented... bank accounts. Only with more latency and no interest and a cap on balances. same with india as well for their CBDC. the reason for crypto and blockchain was to AVOID the conventional banking chanels that are regulated, that are monitored, modifiable at the whims of someone, cross border, cross platform, decentralized, across geographies. its like CBDC took the best of cryto/blockchain and shoved themselves inbetween just to remain relevant because otherwise they certainly would've been. if all my money is on BTC, there is no way a court or a government could order someone to take that from me. before someone says "Abuse", well you are talking as if HSBC, DW, etc etc and all the banks in the world haven't engaged in money laundering so why is this difficult to understand?
  - LatteLazy 4y ago
    I am not a crypto fan boy, and I don't really care about (folding) cash vs cards etc. But there is a part of me that worries a bit about some future government/central-bank deciding to implement things like haircuts and negative interest rates. Actual cash / crypto is a nice way to actually prevent that at least. Interestingly one of the sections of Cloud Atlas is set in a future where the government REQUIRE that citizens spend all their cash by the end of the payment period. You need a special license to "save" or invest. I could see that being a policy to "stimulate demand" or whatever...
    - 4y ago
lesuorac 4y ago
IIUC, this actually seems very reasonable despite what the rest of the commenters seem to indicate. BoE wants to have their own system to allow people to pay/receive money electronically. Certainly useful. BoE also doesn't want to have a ton of risk by storing people's life savings so they're limiting it to 10~20k pounds. The expressed goal is to facilitate day-to-day spending so this seems well above what an average person spends day-to-day.
TEP_Kim_Il_Sung 4y ago
Alternate title: "British government wants to decide who is rich and who is poor."

15 points by jermaustin1 4y ago

What's a digital pound, as opposed to a pound that exists digitally....I feel like this article isn't talking about unprinted currency? This sloppy language sounds like it's concealing some critical flaw in a new currency scheme..

jermaustin1 4y ago
Honestly, I posted this because I cannot find any detailed articles about it, and was hoping SOMEONE on HN might have more information they could comment.
- lesuorac 4y ago
  The article links out to BoE's own paper. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1134845/CBDC_WEB_PDF_-_7_FEB_2023_1130am.pdf https://assets.publishing.service.gov.uk/government/uploads/...
throwaway4aday 4y ago
They don't bother explaining that it is a CBDC (Central Bank Digital Currency) which is essentially just a ledger built on a blockchain but fully centralized. So instead of using some independent bank's ledger which settles with other banks or gives out cash you have a single system with complete oversight. This is only useful if it eventually replaces the other options. My question is, if there are balance limits from the beginning causing overages to be "swept" out of the system and into a bank account, what happens when there's no longer an external bank account to sweep the funds into?
- thoughtstheseus 4y ago
  Individuals cannot hold DCBC assets except through a commercial bank. For the cash sweep the commercial bank could mail you a check? Or hold cash in a simple escrow account?
- Khelavaster 4y ago
  Thanks so much for this!

pjkundert 4y ago

CBDCs such as the proposed BritCoin, which implement programmable suicide pacts (holding caps, limits on what can be purchased/sold) must be rejected. You have 2 choices — and one of them isn’t to not use “Crypto”. Your choices are: - do I hold only government controlled Cryptocurrencies, or - do I hold Cryptocurrency that I control, and cannot be destroyed by my government at their whim?

deleted 4y ago
[deleted]
ihatepython 4y ago
You are a fool if you think the government will allow any other cryptocurrency that they do not control.
- pjkundert 4y ago
  Well, I’d rather be considered a fool and give my children a chance to be free, than be considered wise and force them to live as slaves.
  - ihatepython 4y ago
    If you want your children to be free, then the solution is to eliminate direct taxation. "No taxation without representation" was one of the slogans of the American Revolution. The problem is taxation. A digital currency allows the government to tax everything you do. Government will simply confiscate any digital currency that competes with theirs.

beardyw 4y ago

My bank currently gives me a debit card, supports online account to account transfers, direct debits, standing orders. Presumably with crypto they will offer just the same. How will my life change?

LatteLazy 4y ago
Well if you are the governor or a senior manager at the BoE your life has already been changed by all the trips to the Bahamas to "fact find". But if not, it won't change your life at all...
hypomanic 4y ago
It's always wild to me people think the current system is good. When you deposit money is a bank, you no longer own the money directly. You own an IOU from the bank (i.e., you're extending the bank a loan) and then they are free to loan out your money in the form of mortgages, car loans, whatever. The key point is that under the current system, it's impossible to just own digital money directly! You can only be a creditor to a mortgage-lending company! This is completely crazy. What if I don't want my digital money to be loaned out to mortgages of various risk levels? FDIC insurance (in the US at least) is an attempt to fix this janky system with even more confusing jankiness (better not exceed 250k of digital money in the same account, e.g.). If I could just own digital money directly, FDIC insurance wouldn't make any sense. What am I being insured against?? Blockchains finally make it so everyone can just own their digital money directly, without being forced to instead be creditors to mortgage-lending companies.
- beardyw 4y ago
  Oh, and I get a small amount of interest too. And money back on bills. Still not sure having my money sitting on a blockchain is better.
  - hypomanic 4y ago
    Loaning your money out to someone who's going to loan it out to homebuyers is still an option, just not the only option.

realce 4y ago

> Money above the cap would be "swept" into a customer's commercial bank account given that a digital pound would not be a means for storing wealth, he told members of UK Finance, a banking industry body. So digital money that can be destroyed at-will by the central government AND it's not even a "store of wealth" now? What possible positive use would anyone currently without wealth want with this garbage? People of the UK need to get out from under this ASAP.

lockhouse 4y ago
That’s the point, us serfs are supposed to own nothing and be happy. That should be just enough money to pay for leases, rents, and subscriptions. Only the elite wealthy overlords are supposed to own things and store wealth.
thoughtstheseus 4y ago
I did not notice anything being destroyed, can you elaborate? DCBC can be used to protect those with low income/wealth from inflation, offering tiered interest rates. It can be a tool for direct government subsidies & taxation.
- 2Gkashmiri 4y ago
  why cant those all "features" be implemented to your savings bank account?

LatteLazy 4y ago

This project seems like a huge mess. What exactly is the "risk" to individuals that needs to be managed if the currency is backed by the BoE and Stable? Also, no anonymity. Also, not decentralised. Also, the central bank can create and destroy or freeze money at any point including just your account. Also, total access to the police and 101 other orgs without any need for warrants etc. Also, you will need a bank to access this (so what's the point at all really?) So after all this time and energy, the bank of england has invented... bank accounts. Only with more latency and no interest and a cap on balances.

2Gkashmiri 4y ago
>So after all this time and energy, the bank of england has invented... bank accounts. Only with more latency and no interest and a cap on balances. same with india as well for their CBDC. the reason for crypto and blockchain was to AVOID the conventional banking chanels that are regulated, that are monitored, modifiable at the whims of someone, cross border, cross platform, decentralized, across geographies. its like CBDC took the best of cryto/blockchain and shoved themselves inbetween just to remain relevant because otherwise they certainly would've been. if all my money is on BTC, there is no way a court or a government could order someone to take that from me. before someone says "Abuse", well you are talking as if HSBC, DW, etc etc and all the banks in the world haven't engaged in money laundering so why is this difficult to understand?
- LatteLazy 4y ago
  I am not a crypto fan boy, and I don't really care about (folding) cash vs cards etc. But there is a part of me that worries a bit about some future government/central-bank deciding to implement things like haircuts and negative interest rates. Actual cash / crypto is a nice way to actually prevent that at least. Interestingly one of the sections of Cloud Atlas is set in a future where the government REQUIRE that citizens spend all their cash by the end of the payment period. You need a special license to "save" or invest. I could see that being a policy to "stimulate demand" or whatever...
  - 4y ago

lesuorac 4y ago

IIUC, this actually seems very reasonable despite what the rest of the commenters seem to indicate. BoE wants to have their own system to allow people to pay/receive money electronically. Certainly useful. BoE also doesn't want to have a ton of risk by storing people's life savings so they're limiting it to 10~20k pounds. The expressed goal is to facilitate day-to-day spending so this seems well above what an average person spends day-to-day.

TEP_Kim_Il_Sung 4y ago

Alternate title: "British government wants to decide who is rich and who is poor."