3 ms·

TL;DR: There's two types of central bank digital currencies (CBDC): retail CBDC and wholesale CBDC 1. retail CBDC = used for ordinary transactions. digital ve

TL;DR: There's two types of central bank digital currencies (CBDC): retail CBDC and wholesale CBDC 1. retail CBDC = used for ordinary transactions. digital version of the cash 2. wholesale CBDC = used for interbank/financial institution settlement. tokenized central bank reserves

jqpabc123 11mo ago
Both of these have been in place for a very long time. Ever use a debit card to buy something? It could easily be made faster and more efficient --- but some people are scared it will mean the end of the world.
- iluxonchik 11mo ago
  What do you mean? CBDCs are development phase
  - jqpabc123 11mo ago
    We've been buying stuff without using currency for decades. Banks have been exchanging money this way also. The only thing missing is an official "central bank" endorsement that would lead to a faster and more efficient process. Banks also oppose this also because it would cut them out of a large chunk of the financial market.
    - iluxonchik 11mo ago
      This is not just about efficiency, but how the financial market infrastructure works. Central banks aren't just about adding a label - they're a core entity behind currencies that we use for day to day payments I'm not sure what you mean by "We've been buying stuff without using currency for decades". Unless you're purchasing with gold - you're likely using currencies
      - jqpabc123 11mo ago
        When you buy something with a debit card, you're using "digitized currency". And "digital currency" is the topic here. It's all data stored and manipulated by computers anyway. The only difference is how the data is routed and stored.
- iluxonchik 11mo ago
  Looks like the comment was updated? I see a different one now. To reply to > Both of these have been in place for a very long time. > Ever use a debit card to buy something? No they haven't. Debit card balance isn't a deposit at the central bank - it's commercial bank money (i.e. a liability of the commercial bank, not the central bank). Retail CBDC is digital central bank money held by the public (retail). So it would be the public holding a central bank liability
  - jqpabc123 11mo ago
    So it would be the public holding a central bank liability The public and central banks ultimately hold all the liability anyway. As far as settlements are concerned, commercial banks are just intermediaries that could easily be replaced by automation.
    - iluxonchik 11mo ago
      > The public and central banks ultimately hold all the liability anyway All the liability on what? Central bank liability is both a legal, and a financial concept Commercial banks can be easily replaced? How so?
      - toomuchtodo 11mo ago
        > Commercial banks can be easily replaced? How so? End user deposit accounts held at the central bank [1] and narrow banking [2]. The Fed does not like these ideas though [3] [4], which is why their policy is designed to support commercial banks. The funny part is the Tether become the narrow bank outside of the traditional financial system; they hold mostly only US treasuries, at nation state scale [5]. Does it matter they don't have a master account at the Fed? I argue no, considering treasuries are backed by the full faith and credit of the US government, and that debt is backstopped by the Fed. Consumer deposits are unnecessary for lending; credit can be issued by entities who issue debt into the bond market for capital. [1] https://rooseveltinstitute.org/wp-content/uploads/2021/08/GDI_Central-Banking-For-All_201806.pdf https://rooseveltinstitute.org/wp-content/uploads/2021/08/GD... [2] https://en.wikipedia.org/wiki/Narrow_banking https://en.wikipedia.org/wiki/Narrow_banking [3] https://www.chicagobooth.edu/review/safest-bank-fed-wont-sanction https://www.chicagobooth.edu/review/safest-bank-fed-wont-san... [4] https://southerncalifornialawreview.com/2024/03/11/squeezed-the-narrow-bank-the-federal-reserve-and-the-future-of-full-reserve-banking/ https://southerncalifornialawreview.com/2024/03/11/squeezed-... [5] Tether is now the 17th largest holder of US debt - https://news.ycombinator.com/item?id=45747578 https://news.ycombinator.com/item?id=45747578 - October 2025 (jqpabc123 mentions in a sibling comment FedNow instant rails, which makes moving value trivial for a few pennies per transaction, up to $10M at a time)

jqpabc123 11mo ago

Both of these have been in place for a very long time. Ever use a debit card to buy something? It could easily be made faster and more efficient --- but some people are scared it will mean the end of the world.

iluxonchik 11mo ago
What do you mean? CBDCs are development phase
- jqpabc123 11mo ago
  We've been buying stuff without using currency for decades. Banks have been exchanging money this way also. The only thing missing is an official "central bank" endorsement that would lead to a faster and more efficient process. Banks also oppose this also because it would cut them out of a large chunk of the financial market.
  - iluxonchik 11mo ago
    This is not just about efficiency, but how the financial market infrastructure works. Central banks aren't just about adding a label - they're a core entity behind currencies that we use for day to day payments I'm not sure what you mean by "We've been buying stuff without using currency for decades". Unless you're purchasing with gold - you're likely using currencies
    - jqpabc123 11mo ago
      When you buy something with a debit card, you're using "digitized currency". And "digital currency" is the topic here. It's all data stored and manipulated by computers anyway. The only difference is how the data is routed and stored.
iluxonchik 11mo ago
Looks like the comment was updated? I see a different one now. To reply to > Both of these have been in place for a very long time. > Ever use a debit card to buy something? No they haven't. Debit card balance isn't a deposit at the central bank - it's commercial bank money (i.e. a liability of the commercial bank, not the central bank). Retail CBDC is digital central bank money held by the public (retail). So it would be the public holding a central bank liability
- jqpabc123 11mo ago
  So it would be the public holding a central bank liability The public and central banks ultimately hold all the liability anyway. As far as settlements are concerned, commercial banks are just intermediaries that could easily be replaced by automation.
  - iluxonchik 11mo ago
    > The public and central banks ultimately hold all the liability anyway All the liability on what? Central bank liability is both a legal, and a financial concept Commercial banks can be easily replaced? How so?
    - toomuchtodo 11mo ago
      > Commercial banks can be easily replaced? How so? End user deposit accounts held at the central bank [1] and narrow banking [2]. The Fed does not like these ideas though [3] [4], which is why their policy is designed to support commercial banks. The funny part is the Tether become the narrow bank outside of the traditional financial system; they hold mostly only US treasuries, at nation state scale [5]. Does it matter they don't have a master account at the Fed? I argue no, considering treasuries are backed by the full faith and credit of the US government, and that debt is backstopped by the Fed. Consumer deposits are unnecessary for lending; credit can be issued by entities who issue debt into the bond market for capital. [1] https://rooseveltinstitute.org/wp-content/uploads/2021/08/GDI_Central-Banking-For-All_201806.pdf https://rooseveltinstitute.org/wp-content/uploads/2021/08/GD... [2] https://en.wikipedia.org/wiki/Narrow_banking https://en.wikipedia.org/wiki/Narrow_banking [3] https://www.chicagobooth.edu/review/safest-bank-fed-wont-sanction https://www.chicagobooth.edu/review/safest-bank-fed-wont-san... [4] https://southerncalifornialawreview.com/2024/03/11/squeezed-the-narrow-bank-the-federal-reserve-and-the-future-of-full-reserve-banking/ https://southerncalifornialawreview.com/2024/03/11/squeezed-... [5] Tether is now the 17th largest holder of US debt - https://news.ycombinator.com/item?id=45747578 https://news.ycombinator.com/item?id=45747578 - October 2025 (jqpabc123 mentions in a sibling comment FedNow instant rails, which makes moving value trivial for a few pennies per transaction, up to $10M at a time)