CBDC incoming

[Lannister902]

I've looked through PH, seems there's not much chatter on central bank digital currencies apart from the odd post in the cryptocurrency thread.

I'm not sure if everyone realises quite how different the banking system will become, and how soon it due to be implemented. Paper money looks like it'll reach a complete death (which I suppose has happened anyway...)

I've looked into it, and I'm not sure what to think of it. There's parts that are concerning, for example the fact that central banks/governments have so much more more powers on how much, where, when we spend our own money
They'll literally have the power to put an expiry dates on the money you have, be able to dictate how much you spend, where you spend it. They'll have complete control of all the money you have.

Any thoughts?

[SturdyHSV]

I had no idea at all.

I'm no finance expert, but know enough about technology to expect this is being pitched as more secure, whereas what it'll mean is once nefarious types work out how to get access to your money, then you'll be REALLY fked

[alscar]

BOE in the UK is looking into it but currently no plans as to if / when but states digital is an adjunct to cash as opposed to replacing.
I don’t share the belief that it’s implementation allows total control of your money though although who knows !

[Hoofy]

I suspect some countries might use it to control but it wouldn't be surprising for those governments as they already control the populace through laws and beatings.

[Scootersp]

Is some ways it appears we are almost fully digital already, the younger (and increasingly older) generation barely use cash.

The issue is the potential control if there is zero cash and no other alternatives. The Canadians experienced some of the worrying side of power over reach when those supporting the Truckers via donations had there accounts frozen. With cbdc's this would arguably be easier (might block you doing it in the first place and yet still punish you for trying), and I'm not sure I trust those in power to leave me alone/not interfere?

Kissinger Quote springs to mind

"If you control the food, you control a nation. If you control the energy, you control a region. If you control the money, you control the world."

[Countdown]

Thread here

https://www.pistonheads.com/gassing/topic.asp?h=0&...

[Jon39]

I don't know about CBDC, but in theory when digital currency replaces cash, then negative interest rates can be charged.

Pay in £1,000 to a savings account, then after one year, you might only have £900. The £100 deducted as interest.
That cannot happen while cash is still available, because savers could retain cash, to be certain of stil having their £1,000 after 12 months.

[OutInTheShed]

Negative interest rates have existed before.

I've often thought that we could have a digital currency based on either a 'normal' currency, a basket of currencies or some other assets.
We could go back to the 1800s and have global trade in tokens linked to gold.
We could have digital tokens whose value were defined by the FTSE index.

TBH, it seems we haven't really progressed since the end of the 90s.
Back then, one of my clients used to do all their budgets and stuff in ECU.
John Major wanted a 'hard ECU' instead of an actual currency union? Maybe a digital ECU would have worked?

We never really moved very far towards trading in multiple currencies on a day to day personal level.
I buy the odd thing in USD or euro using a Visa card, but mostly we just use what's local.
Since the euro, most people in euroland just use that and since Brexit, we just use pounds unless we're abroad.

At a muppet user level, how would a digital pound actually be different from paying by Visa and then settling my Visa bill monthly?
Actual notes and coins are a tiny fraction of my personal turnover.

[Colonel Cupcake]

alscar said:

BOE in the UK is looking into it but currently no plans as to if / when but states digital is an adjunct to cash as opposed to replacing.
I don’t share the belief that it’s implementation allows total control of your money though although who knows !

If you cannot physically hold the currency in your hand, who controls it?

[jamiedimonBTClover]

Jon39 said:

I don't know about CBDC, but in theory when digital currency replaces cash, then negative interest rates can be charged.

Pay in £1,000 to a savings account, then after one year, you might only have £900. The £100 deducted as interest.
That cannot happen while cash is still available, because savers could retain cash, to be certain of stil having their £1,000 after 12 months.

Since the advent of fractional reserve banking - passing through negative rates isn't an issue. It was the norm above 100k in the Eurozone for nearly 10 years. And Sweden had negative rates before.

There isn't enough cash for everyone to withdrawal, so your plan is flawed.

The reason to actually have a CBDC is reduce transmission losses - mainly in Monetary Policy implementation.

[supersport]

I blame Bill Gates, I would have thought he would have had enough to do with his 5g army

[Scootersp]

jamiedimonBTClover said:

Since the advent of fractional reserve banking - passing through negative rates isn't an issue. It was the norm above 100k in the Eurozone for nearly 10 years. And Sweden had negative rates before.

There isn't enough cash for everyone to withdrawal, so your plan is flawed.

It's not exactly his plan, it's more that it sort of keeps them (more) honest, bank runs have always occurred from this premise ie that there is a physical form for your money and that in theory you can get it. That in practice you (or at least everyone) can't doesn't make it without merit, if somethings gets to the stage the common man fears his money is gone and feels the need to queue for his money then it makes waves/news and signals an issue to everyone.

If there is just cbdc's then arguably no widespread displeasure can be manifested into direct action, you are left just having to suck it up, whatever is decided? and then afterwards and forever more, however you feel about what's happened to you or others there is still no other option for you?

But then even in the current non cdbc world you can have capital controls (like they had in Greece) and threat of bail ins etc so perhaps it doesn't matter...........

[jamiedimonBTClover]

Scootersp said:

It's not exactly his plan, it's more that it sort of keeps them (more) honest, bank runs have always occurred from this premise ie that there is a physical form for your money and that in theory you can get it. That in practice you (or at least everyone) can't doesn't make it without merit, if somethings gets to the stage the common man fears his money is gone and feels the need to queue for his money then it makes waves/news and signals an issue to everyone.

If there is just cbdc's then arguably no widespread displeasure can be manifested into direct action, you are left just having to suck it up, whatever is decided? and then afterwards and forever more, however you feel about what's happened to you or others there is still no other option for you?

But then even in the current non cdbc world you can have capital controls (like they had in Greece) and threat of bail ins etc so perhaps it doesn't matter...........

Bail in is already a component of BASLE / post crisis rules....

CBDC, is probably the most feared and misunderstood concept discussed in here. It's almost certainly to co-exist alongside regular GBP and function as a stable coin.

People saying its a control mechanism, probably watch too much Andrew Tate.

Bank runs only happen because of lack of faith in the financial system and technology, plus a quaint notion that you need a physical manifestation of money.

Both are largely untrue today. It has nothing to do with crypto, either.