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My concern is that this is a trial run for an official CBDC that will eventually replace cash.
by lockhouse 3y ago
My concern is that this is a trial run for an official CBDC that will eventually replace cash.
- lavp 3y agoWhat is it about CBDCs you find concerning compared to cash?
- lp0_on_fire 3y agoIt's bad enough that banks have virtually unlimited insight into my spending habits that we need to give the Feds the same access. I should have the right to buy a big mac without some government server getting pinged.
- 1001101 3y agoAnother concern I have heard voiced is that CBCD could be programmed - eg. you can't buy X, or you can only buy Y at certain times, or for certain prices, etc. and has the potential for reduced liberty vs. cash.
- lockhouse 3y agoIt can also be programmed with an expiration date to encourage you to spend it to stimulate the economy instead of saving it.
- prometheus76 3y agoIt could also be geofenced. Can't use your phone to buy fireworks from out of state because it's illegal in your state. Or you can only spend this money at a local store, but not at a store in another town.
- imtringued 3y agoHow to get voted out of office immediately.
- prometheus76 3y agoFederal Reserve is not an elected office, nor is it a government agency. The Federal Reserve is a private organization.
- EdSharkey 3y agoYou're placing a lot of faith in a system whose power would have long-since been stolen from the people.
- imtringued 3y agoIt is called EBT and it already exists and the thing is people demand this for welfare payments all the time.
- NoMoreNicksLeft 3y agoHow will they protect us though unless they know the nature of every transaction we participate in? Are you really responsible enough to take care of yourself? A CBDC would combine the best aspects of company scrips with those of wartime ration tickets! I think you should reconsider your stance.
- SantalBlush 3y agoI don't think the government is trying to protect drug dealers or tax evaders from themselves. You intentionally chose a weak argument to fight against.
- lockhouse 3y agoThanks, I forgot about all the new taxes this technology could enable. Why not put a tax on every private transaction? Maybe have it increase the closer it gets to the expiration date. The amount of people rooting for big brother here on HN lately is frankly terrifying.
- NoMoreNicksLeft 3y agoI have so many problems in my personal life, and I don't know how else they could be solved except for the government to carefully micromanage that for me.
- SantalBlush 3y agoI'm not rooting for or against anything other than shitty arguments. I come to this site to read smart takes, not half-baked sarcastic nonsense. Based on what I'm reading, maybe that's asking too much.
- enstrangement 3y agoI doesn't give the Feds access to anything. Suppose I bank at Wells Fargo and my favorite coffee shop banks at Capitol One. If I pay the shop $4 for a latte, the fed will have NO IDEA who sent that money to whom or for what. All the Fed sees is $4 moving from the Wells to the Cap One Federal Reserve master accounts -- amid a blizzard of millions of other transactions. The difference from ACH is just that these payments are settled in big batches rather than one by one. The Fed will get new and better data on payment volume, but that's all, really.
- mixmastamyk 3y agoThat’s what cash is for. You never had any privacy for electronic transactions, might as well nip the idea in the bud.
- djfobbz 3y agoFor one, unlike cash, the issuing entity can program CBDC to expire on a specific date unless utilized. Another horror use case is that they could track and limit how many hamburgers or pizzas you eat daily, weekly, monthly or yearly!
- kemotep 3y agoWhy would the government program money to expire? Would the money not become effectively worthless the closer to the expiration date? Why would a business accept transactions from people with money that’s about to expire would that then mean they would be giving away goods and services for free potentially?
- oaththrowaway 3y agoI assume that the TTL of the money would reset once it has changed hands
- kemotep 3y agoIf you are assuming how a hypothetical future currency will work then we could easily assume exactly the opposite and the money would be destroyed by a set date to maintain some stable rate of deflation. Do you have evidence that a time to live for a currency is being considered by the Federal Reserve and US government?
- oaththrowaway 3y agoNo, but I have plenty of evidence to suggest that the US government doesn't have our best interests at heart...
- kemotep 3y agoThat’s fair enough. Ostensibly the government of any country should be accountable to the people but history shows that cannot be counted on. As convenient as Apple Pay is, I would not vote for a cashless system. I am just confused that very specific ideas of how this hypothetical system is going to work and am not sure where these come from or why it has to work the way people say and not in a more accountable less abusive manner. Expiring money seems patently absurd so why a central bank would consider it seems so outlandish to me at least.
- rvz 3y agoWhen the government does something unpopular against its own people, they can easily quell protestors at scale and force the usage of CBDC adoption by closing ATM withdrawals [0] add savings limits [1] and can incentivise spending with an expiring date. [2] Whilst many HNers were celebrating UPI as the payment rails from India, it is almost the same thing as FedNow and is planning to put their own CBDC on UPI called E-RUPI [3] taking all the same valid concerns that I have mentioned. Do you really want this? [0] https://www.pymnts.com/cbdc/2022/nigeria-cuts-atm-cash-withdrawals-and-urges-enaira-use/ https://www.pymnts.com/cbdc/2022/nigeria-cuts-atm-cash-withd... [1] https://reclaimthenet.org/digital-euro-spending-saving-limits https://reclaimthenet.org/digital-euro-spending-saving-limit... [2] https://bfsi.economictimes.indiatimes.com/news/policy/digital-currency-yuan-comes-with-an-expiry-date-spend-or-it-will-vanish/82059471 https://bfsi.economictimes.indiatimes.com/news/policy/digita... [3] https://indianexpress.com/article/explained/what-is-e-rupi-digital-currency-india-pm-modi-7433637/ https://indianexpress.com/article/explained/what-is-e-rupi-d...
- OGWhales 3y agoCash can be spent without being monitored or blocked. A recent example of how this might be relevant is with the protests in Canada that lead to the freezing of the protesters’ bank accounts by the government. While I don’t agree with the protesters, the idea of the government freezing their accounts is alarming. After seeing such control exercised, it’s hard to be excited about a cashless society.
- adamsmith143 3y agoThis feels like a boat that sailed long ago. I don't know anyone using cash for anything more than small incidental purchases, I'd say it's generally impossible to structure you life around using Cash at a large scale.
- constantcrying 3y ago>replace cash That is the most important concern. Not even crypto can beat cash for convenience and anonymity. But having a way to transfer money outside of large corporations and instead through a government regulated service is a good thing.
- landemva 3y agoIt makes me question why we allow government to be in charge of our money, and the price of money (interest rate meddling by govt contractor federalreserve). I suppose we grow up with it and don't question it.
- jrockway 3y agoThe Federal Reserve sets the interest rate that it loans money at. You are free to loan money to anyone at a lower rate if you wish.
- idiotsecant 3y agoI mean, that is true in the same way that if I want to create some shrutebucks and loan them out at the schrute reserve rate you are also free to loan out shrutebucks at whatever rate you want. The fed may have a small advantage you are willfully overlooking.
- imtringued 3y agoIf we believe neoclassical theory then if the fed sets the rate too high we get deflation and if the fed sets the interest rate too low we will get inflation and we will get those things very quickly with very little delay. This means that the policy rate would have to mirror whatever the optimal market rate is. If we accept some minor inflation, then the fed is always setting the rate a bit too low rather than too high. In other words. Whatever the Fed does, it is mostly irrelevant. On the other hand, if there is actually some leeway and elasticity then monetary policy can actually result in increases in economic welfare. In this scenario we want to see some utilitarian meddling.
- skybrian 3y agoIf a country’s government really wants to get rid of a lot of large cash transactions, they could phase out some paper money like India (no cryptocurrency required) but in the US it doesn’t seem very likely? Most money in the US already consists of electronic records in banks. Making bank transfers work better is fairly orthogonal to whether ATM’s work and retailers accept cash.
- Analemma_ 3y agoFedNow is a replacement for ACH which is an ancient, creaking monstrosity. If we can't ever replace or fix old, busted infrastructure because of conspiratorial rambling, we are fucked as a civilization.
- WeylandYutani 3y agoWhat has government ever done for us? https://youtu.be/Qc7HmhrgTuQ https://youtu.be/Qc7HmhrgTuQ
- lockhouse 3y agoI’ve seen a lot of crazy conspiracy theories reveal themselves to be true in the past five years. Apply some critical thinking on this. Governments and corporate elites worldwide are salivating over the level of surveillance and control that a CBDC will enable.
- geodel 3y agoAnd by not availing convenience of FedNow, one can stop government in tracks.
- the-dude 3y agoWhich crazy conspiracy theories are you referring to? I am applying some critical thinking here.
- HideousKojima 3y agoThe NSA monitoring any and all electronic communications (foreign and domestic) that they can get their hands on, without a warrant. The federal government cutting off financial services for legal but disliked industries such as the gun industry (see the Obama admin's Operation Chokepoint). The Canadian government freezing the bank accounts of those who supported the trucker protest. Not directly related to finances or electronic surveillance, but some government fuckery greatest hits that actually happened: - Kidnapping hobos and force feeding them LSD - Intentionally infecting people (mostly black) with syphilis - Feeding irradiated oatmeal to mentally handicapped children - Obama personally ordering the execution of an American citizen without trial and having the military carry it out (and killing the target's 16-year old American citizen son as well)
- yehosef 3y agothis is what it is.
- codyb 3y agoI wouldn't worry too much about replacing the US Dollar entirely. We're pretty slow even to get rid of the penny. The US Dollar has a _lot_ of fans, I'm certainly one of them.
- hiatus 3y agoI read remarks where Yellen said explicitly that if FedNow works, they won't need a CBDC. I'll try to dig that up.
- mhovan 3y agoCBDC is a new acronym for me... For others like me: CBDC == Central Bank Digital Currency https://www.federalreserve.gov/central-bank-digital-currency.htm https://www.federalreserve.gov/central-bank-digital-currency...