Are CBDCs good for the economy? - page 2.

Silberman

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Quote from: Milan1009 on August 10, 2022, 11:11:50 PM

The stable digital currencies, also known as CBDCs have been gaining popularity in the last two years, especially after 2021 bull market.

Recently I was looking at some news about CBDCs implementation in Australia, and I was wondering if this is something that could cause trouble or confusion within a local economy as it moves forward. Countries like Canada have developed contingency plans for this system, although I'm not sure how small countries could be affected by this. What are your thoughts?

Link to the news as reference:

https://twitter.com/thetokenist/status/1556986345972809728?s=20&t=bpZZ56l23Rh3v40wykXckQ

In terms of their economic impact CBDCs are probably as bad as fiat currencies, so in that front they will not be any worse than what we have right now, but the real problem with CBDCs is the huge control governments will have over the currency, privacy concerns are bad enough as you will not be able to buy anything without being under heavy surveillance, but now governments could even forbid you of buying what you want with your money, for your own good of course, so if possible I would not like for CBDCs to gain any traction at all.

Darker45

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It is probably good to the economy rather than bad. How good it is, I'm not sure but it shouldn't be a big deal. After all, it's just merely a conversion of the same fiat from one form to another. In other words, it is not really an economic move. A country's GDP certainly won't have a big change simply because it abandons the old monetary form and takes in a new one. But, again, it must be net positive to the economy. At the very least, maintaining bills and coins is costly.

AmoreJaz

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Quote from: stompix on August 11, 2022, 01:38:55 PM

Quote from: el kaka22 on August 11, 2022, 01:22:56 PM

There is a big difference between CBDC and stablecoins. CBDC will be done with governments approval and that would be the key point there, and if you do that then you are going to be fine. But, if you are looking at things that would benefit you in the long run, stablecoins are different and they are a lot better.

Why are stablecoins better than CDBC?
At least with a CDBC, you will know 1 dollar is one dollar, with stablecoins you find out in the morning a UST is equal 2 cents.
Besides, even if stablecoins would be able to keep their peg, they are still doing this to a currency controlled by the same government that issued those CDBCs so, what's the advantage?
Let's add the fact that with stablecoins you don't have to worry only about the government freezing your account but by the ones issuing those stablecoins on top of that like tether has been doing for ages.

So, any reason why somebody would use them over CDBC?

you have actually valid points on this argument. with CBDC, you are at least secure that it won't go down hard as it is backed by the government itself. unless, the government is in deep trouble but the likelihood to happen this kind of situation is very low.
with stablecoins, we are relying on the team behind this, just a perfect example is the failure of UST. so you need to ask yourself, how secure are you with the team behind the stablecoin you are holding? what is the truth behind their assets pegged to it?

hatshepsut93

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It's hard to talk if CBDC is good or bad for the economy if they don't even exist. And there's actually not that much interest in them as you might think. It's just that officials from some countries are saying a few words about them a few times per year. But there's no indication that countries are making serious effort to create such systems.

In general, I see no mechanism for CBDC having any significant effects on the economy. It's just a payment methods. It doesn't allow you to fund projects in some new ways, or combat inflation or boost consumption. So ho can it be good or bad for the economy?

Fortify

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Quote from: Milan1009 on August 10, 2022, 11:11:50 PM

The stable digital currencies, also known as CBDCs have been gaining popularity in the last two years, especially after 2021 bull market.

Recently I was looking at some news about CBDCs implementation in Australia, and I was wondering if this is something that could cause trouble or confusion within a local economy as it moves forward. Countries like Canada have developed contingency plans for this system, although I'm not sure how small countries could be affected by this. What are your thoughts?

Link to the news as reference:

https://twitter.com/thetokenist/status/1556986345972809728?s=20&t=bpZZ56l23Rh3v40wykXckQ

I think they will be good in the long term, but that is looking 10-20 years out. It'll take generations to change peoples behavior on such a big topic, like people transitioning from using horses to cars, from switching from radios to TV sets, it is not going to happen over night. The one thing that really needs to be supported in the rollout is people who have poor ability to access the internet - whether that is the homeless or elderly people who might not be as knowledgeable on the subject, they will need the most support. It should only ever be considered as a backup, supplementary option at the beginning because people will hold onto paper money and coins to an extreme until the convenience proves itself.

stompix

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Quote from: el kaka22 on August 11, 2022, 01:22:56 PM

There is a big difference between CBDC and stablecoins. CBDC will be done with governments approval and that would be the key point there, and if you do that then you are going to be fine. But, if you are looking at things that would benefit you in the long run, stablecoins are different and they are a lot better.

Why are stablecoins better than CDBC?
At least with a CDBC, you will know 1 dollar is one dollar, with stablecoins you find out in the morning a UST is equal 2 cents.
Besides, even if stablecoins would be able to keep their peg, they are still doing this to a currency controlled by the same government that issued those CDBCs so, what's the advantage?
Let's add the fact that with stablecoins you don't have to worry only about the government freezing your account but by the ones issuing those stablecoins on top of that like tether has been doing for ages.

So, any reason why somebody would use them over CDBC?

el kaka22

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There is a big difference between CBDC and stablecoins. CBDC will be done with governments approval and that would be the key point there, and if you do that then you are going to be fine. But, if you are looking at things that would benefit you in the long run, stablecoins are different and they are a lot better.

I do not think that it would be great to invest in either, I would rather not do that, but if I had to pick one, I would go with BUSD over everything else. Because, I trust Binance more than I trust any other stablecoin or any government, they actually do want the best for you because what's best for you is best for them as well.

kryptqnick

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I don't think CBDCs have actually gained much popularity, to be honest. There've been several countries looking into them and a few experimenting with a CBDC trial over some area over some time, and it seems to be legal tender in Nigeria (eNaira), but that's probably it. I'm surprised, actually, that they didn't gain more attention.
Overall, I think it can help with digitalization of the economy and empower the Central Bank of the state while possibly weakening private banks a bit. But it's neither good nor bad for economy on its own, as it's not a significant change: just a step up of fiat (but also a step away from privacy because there's no cash version and I think CBDCs probably require IDs of people, but I'm not sure).

Gyfts

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They aren't good for the economy -- they're mere digital tokens that will undoubtedly be created from thin air and be used as a means to limit cash based p2p transactions. Granted most banking is digital anyways, they'd just prefer to cement paper currency's fate. The appeal is to conflate CBDC's with crypto currency, and to the average consumer, they probably couldn't tell difference.

Being able to control the money supply by merely generating new tokens is as dangerous as it gets.

DVlog

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Quote from: Milan1009 on August 10, 2022, 11:11:50 PM

The stable digital currencies, also known as CBDCs have been gaining popularity in the last two years, especially after 2021 bull market.

Recently I was looking at some news about CBDCs implementation in Australia, and I was wondering if this is something that could cause trouble or confusion within a local economy as it moves forward. Countries like Canada have developed contingency plans for this system, although I'm not sure how small countries could be affected by this. What are your thoughts?

Link to the news as reference:

https://twitter.com/thetokenist/status/1556986345972809728?s=20&t=bpZZ56l23Rh3v40wykXckQ

My question is to you does paper cash good for the economy? I do not find any difference between paper cash and CBDC expect their appearance. You can touch paper cash it has a physical form and you can not touch CBDC it's a digital form of paper cash. As long as govt has full control to print money and increase money circulation, the main problem in our economy inflation will not be solved.

avikz

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Quote from: Milan1009 on August 10, 2022, 11:11:50 PM

The stable digital currencies, also known as CBDCs have been gaining popularity in the last two years, especially after 2021 bull market.

Please get your understanding right! CBDC is a government released currency while stablecoins are cryptos. Both are structured in different ways.

CBDCs are definitely beneficial for the issuing government in multiple ways. But for citizens, it's an issue for their privacy. They will have convenience obviously, but the financial privacy will be gone forever. Only time will tell how much successful they will become.

palle11

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The effect of CBDC may cause some business aspect to suffer while some will have more bull in them because of the payment system. If the digital currency starts operating fully then more than before, more businesses will go online and those that couldn't will keep staying physical and may not get enough attention and patronage. It will be like source of living shifting from one person to another person. It will be easier to make payment for products or services done online with digital currency than fiat. Apart from banks income in fiat it will affect common business owners that won't be able to go digital and less attention and liquidity will go to fiat.

bitmover

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Quote from: mk4 on August 11, 2022, 01:49:31 AM

CBDCs are pretty much just fully digitized dollars with likely far more restrictions. Not sure about the economic impact being good or bad, but it's surely bad for the privacy of the masses.

There is one big economic impact : banks.

If you own a cdbc, you will have cut off the intermediary, the bank, and you will own something straight from the federal reserve or central bank.

There will be no more need for the banking system to hold fiat .

This is a huge economic impact.

Personally, I don't believe big democracies like Europeans and USA will let per
People own a lot of cbdc, specially due to the banking system lobby (they will be much affected)

And no government want a financial crisis.

Maybe in countries like China and Russia where rights are more restricted and there is a bigger control from the government over the economy it is possible there cbdc will grow faster.

Hispo

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In my opinion CBDC's once they start to be implemented they will be pictured as a good thing for economy, also they will be designed to be easy to use by the end user and as a frictionless payment method between people and between people and companies, I suspect there will be even promotions and bonuses by paying with CBDC.

Banks will surely require citizens to have their own CBDC account and there will be an official app on the Play Store/ iStore.

On one hand, if CBDC's manage to get a huge percentage of adoption, their frictionlessness may force other payment processors to improve their services and customer management in order to avoid getting out business and CBDC's could even stimulate consumerism & credit (both being critical components of nowadays capitalism).

So there is a chance CBDC could make a positive impact in the economy of their countries, however, the price to pay for this (loss of individual privacy and other civil rights) do not seem worthy to pay.

bittraffic

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Up to this day, there is no country we know that actaully are using CBDC but China. What they could say about it is good although we may not really know until your country tests your CBDC on you. Base on Chinese reviews, Chinese CBDC is secure and convenient to use. What works for them will also work for other countries like Australia.

I do think the issues being told about CBDC are true such as like limiting where to spend the money and the expiration of the money. Who in the world would do this to thier people?

Apocollapse

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We're still don't know how easy and convenient to use CBDC rather than using current third party online payment e.g. Paypal, if it's more easier then I expect CBDC will have a slight good impact for the economy, but if it's similar like using Paypal, where it took a few days or more about the transaction, I don't expect any result then.

I'd say CBDC is an overrated discussion while the use cases aren't completely different with fiat on online payment.

zasad@

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Some countries are starting to phase out cash or reduce the amount of cash in circulation. For example Sweden. There are many benefits to doing away with cash. No need to spend money on cash control and replacement of worthless banknotes. Reduces the number of robberies because there is no cache. In such countries, the introduction of CBDC will not greatly affect the economy. In large countries, Russia, the United States, it is much more difficult to control the economy with the help of CBDC.

HeRetiK

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I believe anything that reduces friction in how payments are made and consequently how services and goods can be consumed is good for the economy.

That being said, I'm wary of CBDCs. If introduced, I believe it could give people the illusion of control over their own money. Aside from privacy problems, CBDCs will likely be just as easily frozen as regular bank accounts. Don't expect the permissionlessness of cryptocurrencies -- If physical cash wouldn't already exist, no way in hell governments would introduce it today.

crwth

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If it's about all the total amount of circulating supply of money that is in the world, I think it can be somewhat detrimental if it's not regulated or something. Of course, there are drawbacks with the part where it's not regulated, but it is ideal for the ones that really don't have banks or easy access to it. I'm just worried that it's going to be out of control.

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Quote from: Milan1009 on August 10, 2022, 11:11:50 PM

The stable digital currencies, also known as CBDCs have been gaining popularity in the last two years, especially after 2021 bull market.

This is a misunderstanding. Not all stable coins are CBDCs. CBDCs are Central Bank issued Digital currencies. Focus on Central Bank. They don't even have to be cryptocurrencies.

Quote from: Milan1009 on August 10, 2022, 11:11:50 PM

Recently I was looking at some news about CBDCs implementation in Australia, and I was wondering if this is something that could cause trouble or confusion within a local economy as it moves forward. Countries like Canada have developed contingency plans for this system, although I'm not sure how small countries could be affected by this. What are your thoughts?

CBDCs are just a (another) digital form of the local currency. So the big economic impact can be only over the card processing companies (like Visa/Mastercard) which, in case of CBDCs will no longer earn millions from fees (of course, the shops will earn by not spending for those fees). And, as said, it's expected CBDCs will have a massive negative impact on privacy of its users.

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