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I do not understand how CBDC could in any way make my life better? It seems like a worse product with fewer features than what I have now.

Syonyk 4y ago
You're not the beneficiary of the "features" of it. Your local, totally trustworthy, benevolent government that just needs a teensy tiny little bit more data to deal with terrorists, child pornographers, and crypto ransom gangs is. Hence why it would be forced on you. And why we see an irritating reduction in the usability of cash these days. At least in the US, the "value per maximum bill size" has gone down dramatically over the years, to the point that a modern $100 isn't worth much more than a $20 when a lot of our grandparents were growing up. And, of course, there are places that are card only. There remain a few restrictions on that with regards to "debt payment" (you can't serve someone a meal and then demand card only, but you can refuse to let them order up front with cash), but a lot of businesses are happily going the "No icky cash!" route. It's quite the problem if you'd rather various data aggregators not collect all your spending data, and, of course, you pay a bit more if you're not willing to let stores aggregate your data with "loyalty" programs. Local area code, 867-5309 still works for most, though!
- smitty1e 4y ago
  > Your local, totally trustworthy, benevolent government that just needs a teensy tiny little bit more data to deal with terrorists, child pornographers, and crypto ransom gangs is. If I didn't know that my kind, loving, wise government had my best interests at heart, I might detect some sarcasm in your post.
- Natsu 4y ago
  You made me curious so I found an inflation calculator online to check: > $20 in 1900 is equivalent in purchasing power to about $718.66 today, an increase of $698.66 over 123 years. The dollar had an average inflation rate of 2.95% per year between 1900 and today, producing a cumulative price increase of 3,493.29%. We'd need a denomination like a $5k bill just to be able to put as much cash in your pocket as a person could a century ago.
  - Syonyk 4y ago
    Yeah. Except, we've gotten rid of those large bills we used to have - which included the $5k bill. https://en.wikipedia.org/wiki/Large_denominations_of_United_States_currency https://en.wikipedia.org/wiki/Large_denominations_of_United_... Cash is terribly inconvenient to the powers that be. In addition to the irritating ability for me to transfer value to other people or companies without an overt trace, it puts a reasonable lower bound on the effective interest rate - you can't go much below 0% without people just paying to hold cash. It's not relevant right now, but a few years back, the noises about how awesome negative interest rates would be to properly stimulate demand were rather loud. There are a few books written as cover fire for this concept as well. If you put $1000 in your bank account today and will have $995 next year, may as well spend it to stimulate the consumer economy instead of "hoarding" it, right?
    - overthrow 4y ago
      Maybe that's how cash will go out - not with a ban, but a whimper. Once a cheeseburger hits $100, people will probably collectively decide that dealing with bands of cash for small purchases is more trouble than it's worth.
      - Syonyk 4y ago
        Probably. And working as designed. I know plenty of people, some I'm related to, who are full in on what amounts to "Well, they know everything anyway, why shouldn't I use the most convenient payment option?"
tzs 4y ago
See https://www.federalreserve.gov/publications/money-and-payments-discussion-paper.htm https://www.federalreserve.gov/publications/money-and-paymen... Summary: > This paper examines the pros and cons of a potential U.S. central bank digital currency, or CBDC, and is the first step in a discussion of whether and how a CBDC could improve the safe and efficient domestic payments system. Money and Payments: The U.S. Dollar in the Age of Digital Transformation (PDF) invites comment from the public. Importantly, the paper does not favor any policy outcome. > The paper summarizes the current state of the domestic payments system and discusses the different types of digital payment methods and assets that have emerged in recent years, including stablecoins and other cryptocurrencies. It concludes by examining the potential benefits and risks of a CBDC, and identifies specific policy considerations. > Consumers and businesses have long held and transferred money in digital form, via bank accounts, online transactions, or payment apps. The forms of money used in those transactions are liabilities of private entities, such as commercial banks. Conversely, a CBDC would be a liability of a central bank, like the Federal Reserve. > While a CBDC could provide a safe, digital payment option for households and businesses as the payments system continues to evolve, and may result in faster payment options between countries, there may also be downsides. They include how to ensure a CBDC would preserve monetary and financial stability as well as complement existing means of payment. Other key policy considerations include how to preserve the privacy of citizens and maintain the ability to combat illicit finance. The paper discusses these and other factors in more detail.

Syonyk 4y ago

You're not the beneficiary of the "features" of it. Your local, totally trustworthy, benevolent government that just needs a teensy tiny little bit more data to deal with terrorists, child pornographers, and crypto ransom gangs is. Hence why it would be forced on you. And why we see an irritating reduction in the usability of cash these days. At least in the US, the "value per maximum bill size" has gone down dramatically over the years, to the point that a modern $100 isn't worth much more than a $20 when a lot of our grandparents were growing up. And, of course, there are places that are card only. There remain a few restrictions on that with regards to "debt payment" (you can't serve someone a meal and then demand card only, but you can refuse to let them order up front with cash), but a lot of businesses are happily going the "No icky cash!" route. It's quite the problem if you'd rather various data aggregators not collect all your spending data, and, of course, you pay a bit more if you're not willing to let stores aggregate your data with "loyalty" programs. Local area code, 867-5309 still works for most, though!

smitty1e 4y ago
> Your local, totally trustworthy, benevolent government that just needs a teensy tiny little bit more data to deal with terrorists, child pornographers, and crypto ransom gangs is. If I didn't know that my kind, loving, wise government had my best interests at heart, I might detect some sarcasm in your post.
Natsu 4y ago
You made me curious so I found an inflation calculator online to check: > $20 in 1900 is equivalent in purchasing power to about $718.66 today, an increase of $698.66 over 123 years. The dollar had an average inflation rate of 2.95% per year between 1900 and today, producing a cumulative price increase of 3,493.29%. We'd need a denomination like a $5k bill just to be able to put as much cash in your pocket as a person could a century ago.
- Syonyk 4y ago
  Yeah. Except, we've gotten rid of those large bills we used to have - which included the $5k bill. https://en.wikipedia.org/wiki/Large_denominations_of_United_States_currency https://en.wikipedia.org/wiki/Large_denominations_of_United_... Cash is terribly inconvenient to the powers that be. In addition to the irritating ability for me to transfer value to other people or companies without an overt trace, it puts a reasonable lower bound on the effective interest rate - you can't go much below 0% without people just paying to hold cash. It's not relevant right now, but a few years back, the noises about how awesome negative interest rates would be to properly stimulate demand were rather loud. There are a few books written as cover fire for this concept as well. If you put $1000 in your bank account today and will have $995 next year, may as well spend it to stimulate the consumer economy instead of "hoarding" it, right?
  - overthrow 4y ago
    Maybe that's how cash will go out - not with a ban, but a whimper. Once a cheeseburger hits $100, people will probably collectively decide that dealing with bands of cash for small purchases is more trouble than it's worth.
    - Syonyk 4y ago
      Probably. And working as designed. I know plenty of people, some I'm related to, who are full in on what amounts to "Well, they know everything anyway, why shouldn't I use the most convenient payment option?"

tzs 4y ago

See https://www.federalreserve.gov/publications/money-and-payments-discussion-paper.htm https://www.federalreserve.gov/publications/money-and-paymen... Summary: > This paper examines the pros and cons of a potential U.S. central bank digital currency, or CBDC, and is the first step in a discussion of whether and how a CBDC could improve the safe and efficient domestic payments system. Money and Payments: The U.S. Dollar in the Age of Digital Transformation (PDF) invites comment from the public. Importantly, the paper does not favor any policy outcome. > The paper summarizes the current state of the domestic payments system and discusses the different types of digital payment methods and assets that have emerged in recent years, including stablecoins and other cryptocurrencies. It concludes by examining the potential benefits and risks of a CBDC, and identifies specific policy considerations. > Consumers and businesses have long held and transferred money in digital form, via bank accounts, online transactions, or payment apps. The forms of money used in those transactions are liabilities of private entities, such as commercial banks. Conversely, a CBDC would be a liability of a central bank, like the Federal Reserve. > While a CBDC could provide a safe, digital payment option for households and businesses as the payments system continues to evolve, and may result in faster payment options between countries, there may also be downsides. They include how to ensure a CBDC would preserve monetary and financial stability as well as complement existing means of payment. Other key policy considerations include how to preserve the privacy of citizens and maintain the ability to combat illicit finance. The paper discusses these and other factors in more detail.