Central Bank Digital Currency

[Duke of Marmalade]

See attached, quite informative for those with an open mind

 

[tecate]

First thing to note is that CBDC will not be coming any time soon - but the BoE are setting the preparations in case developments, e.g. international, hasten its introduction - but undoubtedly it will be an element of our payments system at some time in the future.

That remains to be seen. A gazillion pilot projects open with hardly any CB on the planet not participating in some way or another. China already ahead of the pack, making concerted efforts to use different mechanisms to get the e-CNY into active everyday use. And of course China leads with this - it's the ultimate tool in the manipulation and control of people.

And that is all that it is - a vehicle in our payment system - digitisation of notes and coins.

I'm pretty sure that it was your good self that pointed out here many times that fiat money was already digital. So I'm calling bs here. There is extra 'functionality' that a retail CBDC will bring.

The BoE sees some dangers in private money (credit cards etc.) dominating the payments system as it is in danger of becoming oligopolistic with a fear that the costs of the payment system passed on to the retail market could become profiteering.

Yeah, I've seen this argument. Essentially they're saying that people would be much better off having all of their data in the direct hands of the government or CB rather than a private sector global payments network.

There will be no suitcases of digital money smuggled through airports.

Very reassuring. So lets say there's a wholesale Euro CBDC and a retail Euro CBDC. Will the treatment be the same, Duke?

Which brings me to an interesting aspect. The BoE seems to recognise that there are folk who do not trust them and they go out of their way to say that they will not have access to personal data.

I wonder why there's an ever growing group of people who don't trust them? On not having access to personal data, I'll believe that when I see it. Even if there was such an implementation, once you have 100% of people using it, wouldn't it be very easy to make some 'adjustments' down the road if there was no other alternative?

Now, despite the name, a CBDC is light years distinct from, say, bitcoin. It is centralised, it is not anonymous, it has intrinsic value, it has flexible supply, it does not use blockchain technology and it has no speculative aspect. The consultation paper expands on these differences. However, it does recognise that crypto has made innovations in payment technology and the ability to use these innovations is cited as a reason to develop CBDC. I am not aware of what these innovations are, perhaps someone can enlighten me.

They're not even comparable although the tyranny that will definitely be pursued by some government/CB or other using one will only serve to push more people to decentralized money and bitcoin.

It also recognises that private stablecoins could have a role alongside CBDC. Can't see it myself unless you have a pathological fear of central banks.

Not all fiat 5hitcoins are equal. Some are crappier than others. I'm sure that has something to do with it.

Purist theoreticians would envisage in the distant future that all money was ultimately CBDC digital money and that therefore the CB had total control of the interest rate on money even to the extent of negative interest rates.

Ah, yes, negative interest rates. The pandemic certainly speeded up the rate of digitization. Ultimately it will be quite easy for a government to remove cash when the time comes. Not that long ago, it was cash payment in China. Now its Wechat Pay and they're now making in-roads via the e-CNY.

 

[Duke of Marmalade]

@tecate so predictable
I try to initiate a rational discussion on this topic but you take the opportunity to spew out your signature rant that central banks are the agents of Satan. I have deleted the OP but left an attachment to the satanic verses of the Bank of England.
Go on, have the last word.

 

[tecate]

@tecate so predictable
I try to initiate a rational discussion on this topic but you take the opportunity to spew out your signature rant that central banks are the agents of Satan. I have deleted the OP but left an attachment to the satanic verses of the Bank of England.
Go on, have the last word.

I've engaged with the subject matter of the discussion as I always do. The 'predictable' part is that you take issue with someone expressing counter-points. Apparently it's only ok if I post something in support of your world view.

On the 'last word' thing, that's your own personal issue. I've never complained to someone here that they're aiming for 'the last word'. I'm not a six year old.

 

[JimmyB99]

On the 'last word' thing, that's your own personal issue. I've never complained to someone here that they're aiming for 'the last word'. I'm not a six year old.

The last word jibe is just unfair. When the original post was made, it was highly probable that Tecate would reply and, if this happened, almost inevitable that he would make challenges broadly in line with what he wrote.

 

[Duke of Marmalade]

The last word jibe is just unfair. When the original post was made, it was highly probable that Tecate would reply and, if this happened, almost inevitable that he would make challenges broadly in line with what he wrote.

Of course I expected @tecate to reply. But the reason I opened a new topic was to take the debate out of the saloon where we were throwing sawdust in each other's eyes.
I was disappointed that he was unable to raise his game.
For example, I noted that the BoE stated that crypto technology could add to the conventional payments infrastructure. I asked for anyone to give me examples, thinking of our resident expert.
Fair kop, the last word jibe was a bit of sawdust but that was after the disappointing rejection of an offer of a civil discussion.

 

[DazedInPontoon]

The major difference that CBDCs could bring is actual custody of digital money. While it's true that we already have some kind of abstraction of digital money it is currently *always* debt.

You cannot currently have custody of a digital euro, you can only be owed a digital euro by an institution, such as your bank account. I can't see them changing that of course, at least not for the common-man as a user.

 

[tecate]

But the reason I opened a new topic was to take the debate out of the saloon where we were throwing sawdust in each other's eyes.

You might want to focus on your own input as a starting point then. If that's what you really wanted (questionable), then suggesting that a retail CBDC is light years better or more advanced than bitcoin is hardly a way to achieve that. They're not alike in any way shape or form. They don't need to be discussed together, other than one offering to be an alternative to the other.

I was disappointed that he was unable to raise his game.

Yours to resolve. I'm more than happy with the extent of my response.

For example, I noted that the BoE stated that crypto technology could add to the conventional payments infrastructure. I asked for anyone to give me examples, thinking of our resident expert.

I'm not a 'resident expert'. Other than that, I think I already outlined what extra functionality a CBDC can bring.

 

[cremeegg]

Odd that you are all focused on a possible digital pound in the week the FT is focused on the Digital Euro.

The case for a digital euro

While many harbour concerns over privacy, having a new way to pay throughout the eurozone would definitely help consumers

www.ft.com

 

[Duke of Marmalade]

You might want to focus on your own input as a starting point then. If that's what you really wanted (questionable), then suggesting that a retail CBDC is light years better or more advanced than bitcoin is hardly a way to achieve that. They're not alike in any way shape or form. They don't need to be discussed together, other than one offering to be an alternative to the other.

I was very careful to say that CBDC was light years different from bitcoin. I was most diligent not to say better. I listed differences, some of which you find extremely supportive of bitcoin, viz. that it is decentralised, anonymous and fixed supply. I think you read what you wanted or thought I would say rather than what I actually said.

 

[Duke of Marmalade]

Odd that you are all focused on a possible digital pound in the week the FT is focused on the Digital Euro.

The case for a digital euro

While many harbour concerns over privacy, having a new way to pay throughout the eurozone would definitely help consumers

www.ft.com

Thanks, so @tecate is not alone on the concerns over privacy. I just find that so hard to understand. The fact that the Central Bank has info on me (which will not be the case in any event) is no more of concern than that so does my bank, and that is nil concern.
For avoidance of doubt I am rather indifferent to the idea of a CBDC. Current private money facilities are fine for me. If they start to profiteer from that dominance of money transmission I am sure the powers that be will find ways to put manners on them without needing to provide a rival payments system.

Someone's wealth could be switched on or off in an instant.

In this more polite setting do you stick by this claim you made in the saloon?

 

[tecate]

In this more polite setting do you stick by this claim you made in the saloon?

Digitally programmable money can be programmed to do a whole host of stuff. It could be frozen, it could have a time limit attached to it, it could be programmed to only be good for certain types of purchases, etc.

 

[Duke of Marmalade]

Yes, and armies can do all sorts of stuff. I live in a place where I broadly trust the powers that be to be acting in my interests. Call me nigh eve, I won't regard that as sawdust.

 

[tecate]

Yes, and armies can do all sorts of stuff. I live in a place where I broadly trust the powers that be to be acting in my interests. Call me nigh eve, I won't regard that as sawdust.

And that's why I said that not all fiat currencies are the same. In the same way I don't expect all CBDCs to be the same. That's not to say either that any of them are perfect, because they're not. On this notion that we can simply trust government to do no wrong (or CBs in this case), I'm not down with that Duke and never will be. Folks should be looking to limit the powers available to these people.

 

[Duke of Marmalade]

Fair enuff. That's your credo.

 

[tecate]

The topic of CBDCs is certainly hitting the radar and has provoked commentary from presidential hopefuls in the US. Here's Robert F. Kennedy's take -> LINK
Marco Rubio is also against. Then we have this bill co-sponsored by 40 Congressmen seeking to prevent the Fed from introducing a CBDC, and another that looks to ban any use by US entities of China's digital yuan.

Meanwhile, in China, week on week, they're coming up with some new contrivance or mechanism every other week to increase daily everyday use of their e-CNY. They've offered free money as part of initial pilots, then various regional government authorities are dreaming up their own ways to bring about adoption. Those have included projects where public sector workers get paid in e-CNY, tuition fees having to be paid in e-CNY, ATMs introduced in tourist resorts that allow foreigners to buy e-CNY, public transport payable via e-CNY etc. A partnership was also recently established with BNP Paribas that would facilitate its corporate clients in using e-CNY - in that case, an effort to see further international use of the CBDC.

 

[Duke of Marmalade]

Ok, good boy, that is what I was hoping for.

Presidential candidate Robert F. Kennedy Jr. is making his stance on central banking digital currencies (CBDCs) clear, while also signaling support for Bitcoin (BTC).

In a new interview with the New York Post, the nephew of former President John F. Kennedy says that if given power, he’d make policies that would support Americans’ freedom to use Bitcoin.
“I will make sure that we have policies that support Bitcoin and the freedom to transact and that allow individuals to manage their own Bitcoin wallets, nodes, and passwords. I will allow only the narrowest controls that are necessary to prevent money laundering.”
Kennedy also says that should he become the next US president, he will stand against the development of a CBDC.
“I oppose central bank digital currencies because they are instruments of control and oppression, and are certain to be abused.”

Wow!! So I see you have some company in high places my dear @tecate.
Whilst the Daily Hodl may have a bias on these matters, I presume they are accurately reflecting Kennedy's views and comments.

 

[Dermot]

Robert F. Kennedy is also an anti covid vaccine spokesperson now.

 

[tecate]

Wow!! So I see you have some company in high places my dear @tecate.

Robert F. Kennedy is also an anti covid vaccine spokesperson now.

I've no desire to open up that can of worms (vaccine matters)! However, there is a point here. Irish people rightly make sense of the world on their own terms. Just be aware that whether its a CBDC, Bitcoin, the vaccine or whatever else, views can differ on these things on an international basis. If the thing is truly global, then that matters. I suppose in the case of a CBDC, it will be the view across Europe that will be most important as it will be an ECB implementation when it comes. That said, folks can use objections raised elsewhere as points of consideration before being walked into something that they may find doesn't quite work in their interests.

 

[Duke of Marmalade]

Thanks @Dermot. I read about him before this, he is a bit of a nutter.
Just to reiterate I am quite agnostic on CBDC. My read is that the most that it will achieve for me (yes I do put my own interests to the fore) is to put manners on the costs of private money transmission (credit cards etc.) which I feel could be achieved by more direct methods.
I wanted to get across the message that CBDC is light years different from bitcoin in case some think this is official endorsement thereof.
Kennedy does not actually support bitcoin in the above article, just an ideological attachment that Americans can do whatever they want, fair enuff, but to avoid going off topic, this topic is not about bitcoin.
I am really not seeing just in what way CBDC will lead to George Orwell's dystopia.