The Central Digital currencies will make monetary policy more difficult - page 2.

jrrsparkles

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Quote from: paxmao on May 25, 2021, 10:47:34 AM

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

Will make the things easier for the government to do anything what they wanted with the money and controlling power also will increase multiple times compared to digital fiat because government is going to take Direct control with centralized cryptocurrency. Anyway the idea is going to remain the same, they just want you to keep their citizens poor.

oHnK

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I dont think so, as the regulator even if they created CBDC as a respond for existance of Crypto especially for BTC they still keep their positioning in monetary regulator. They will keep CBDC to be centralized and will be covered by decentralized design. This is just manipulated the market, they dont want crypto take revolution for new financial system.

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I used to think the way op does. It seems logical that if a state creates its own digital currency, it's done to provide an alternative to decentralized cryptos for its citizens, and then restrict the usage of true cryptos. However, as I've seen Ukraine's roadmap on crypto adoption which plans both to issue a digital currency and allow using Bitcoin for payments and trading, it seems that the intention of issuing a digital currency doesn't always lead to tough regulations. The policy wasn't implemented yet, so it might not work out, but it's hypothetically possible for digital currencies to coexist peacefully with cryptos.

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CBDCs are meant to compliment cash not replace it. What this means is that CBDCs could serve as a complementary means of payment that addresse market failures. In addition, there's a massive likelihood that it will help to speed up the continuous innovation and competition in payments, finance and commerce.

Therefore, CBDC s must be designed in such a way as not to topple commercial banks.

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Quote from: paxmao on May 25, 2021, 10:47:34 AM

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

If we use the digitized currencies of the central banks of states, this does not mean at all that we will get rid of intermediaries. The intermediary in their use will always be the same central banks or their subordinate banks, which will see and control any of our transactions.
However, the very introduction of digitized currencies of the central banks of states is progressive for states, the financial system and participants in this market. In terms of efficiency, stable coins of states are much higher than ordinary non-cash payments.

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Quote from: odolvlobo on May 27, 2021, 07:46:18 PM

Quote from: stompix on May 27, 2021, 01:03:03 PM

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If banks can continue to restrict their customers and charge for money transfer services, then a CBDC really provides no benefit over the current system.

In all those papers that highlight the advantage of CBC you will always efficiency mentioned, lowers cost or lower fees when it comes to usage, but never zero costs. Also, there was never claimed that those stable state coins could be used by an individual without a 3rd party being involved, for the average Joe, the only end result might be lower fees when it comes to payments and that's pretty much all that we will gain from it.

The authorities will have complete control, they could track your payments, your balance, they could revert any payment with ease even if it's between banks, there will be no more tax avoidance and many more. The benefits are there, it's just that we're not the ones benefiting.

Darker45

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Quote from: paxmao on May 25, 2021, 10:47:34 AM

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

Did you by any chance read such a troubling feature in any of the developing CBDCs right now? Or is this something you merely suspect would happen with the new government digital currencies?

Personally, I don't find any reason why any individual is given the special chance to have a direct central bank account. Also, it is next to impossible to kill intermediaries for so many reasons. In the first place, the central bank has no say in terms of how money is to be distributed. Secondly, intermediary banks have lots of roles to play in the day-to-day financial life of people. Furthermore, you cannot make the likes of JPMorgan, Wells Fargo, Citibank, Bank of America, and others irrelevant.

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Quote from: odolvlobo on May 27, 2021, 07:46:18 PM

Quote from: stompix on May 27, 2021, 01:03:03 PM

Quote from: paxmao on May 25, 2021, 10:47:34 AM

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries.

That's not how CBDC will work and there were never planned of something like that.

If banks can continue to restrict their customers and charge for money transfer services, then a CBDC really provides no benefit over the current system.

No difference to what the system we use today, it just becomes digital and they could surveillance everyone's account thru the commercial banks since the central banks have their eyes on them. If one day the country banks crypto, they will know who those people are that made crypto transactions in the past.

The commercial banks we have today still will exist because they will provide users access to digital cash.

odolvlobo

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Quote from: stompix on May 27, 2021, 01:03:03 PM

Quote from: paxmao on May 25, 2021, 10:47:34 AM

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries.

That's not how CBDC will work and there were never planned of something like that.

If banks can continue to restrict their customers and charge for money transfer services, then a CBDC really provides no benefit over the current system.

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Quote from: adzino on May 27, 2021, 06:03:46 PM

Not even sure what you are trying to say... Yuan, euro, dollars and other fiat currency were never a "digital currency". They were always fiat physical currencies. Digital wallets that you use like Paypal, they all are backed by fiat currency.
If you are talking about centralized crypto currencies made by central bank, then how is it going to make monetary policy more difficult? In fact imposing them is going to be more easier for the government. They will have more control over the financial system and they citizens (which is what most of the people don't want).

I don't fully understand what you're trying to say either Wink

Just recently, digital money in many countries already makes up a considerable part of fiat currencies, and some Scandinavian countries are already hatching plans to completely abandon the issue of paper money and switch to a completely digital currency turnover. Therefore, it is not necessary to contrast fiat currencies and digital currencies, because digital currencies are a subset of fiat currencies and if there is a contrast, it is only cash and digital money. As for centralized state cryptocurrencies, I agree with the author of the topic that the exclusion of banking structures from circulation will not lead to anything good, because banks are analogous to ordinary enterprises that deal with finance in a specialized way.

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Quote from: paxmao on May 25, 2021, 10:47:34 AM

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

Not even sure what you are trying to say... Yuan, euro, dollars and other fiat currency were never a "digital currency". They were always fiat physical currencies. Digital wallets that you use like Paypal, they all are backed by fiat currency.
If you are talking about centralized crypto currencies made by central bank, then how is it going to make monetary policy more difficult? In fact imposing them is going to be more easier for the government. They will have more control over the financial system and they citizens (which is what most of the people don't want).

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Quote from: BrewMaster on May 27, 2021, 12:00:57 PM

Quote from: paxmao on May 25, 2021, 10:47:34 AM

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries.

not at all. there won't be even a tiny bit of difference between any new digital (crypto) currencies and the existing digital currencies run by the banking system. even the same laws would apply including the KYCs and who can and who can't open an account.

I think one major difference is that it is going to be highly centralised and control by the developing country and you can't compare such coin to bitcoin in no way. Countries that are talking about digital currency are only seeking to regulate the flow of fiat money and cryptocurrency in circulation in the country.

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Quote from: paxmao on May 25, 2021, 10:47:34 AM

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

Hello
I do think that you have to understand that this will happen for sure, it has been happening to an extent but center is putting more and more control over everything. Well for me I do believe that the old system did not work therefore at the end of the day if we get to experiment with this we might see that the benefits hugely overweights whatever negative effects that might be there.
I don't think they will make it this easier. There will be KYC and other documents in place for sure. They made us submit documents for Bitcoins and other decentralized cryptocurrencies also. What else can we expect now ?
What I do think is that we should wait and see how this all goes down. There will be more advancements on the way.
I would still prefer cryptocurrencies over these digitalized fiat.

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Quote from: paxmao on May 25, 2021, 10:47:34 AM

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries.

That's not how CBDC will work and there were never planned of something like that. Even in the Communist era the central banK was not dealing with everyone's deposits and most of the factories and manufacturers' unions had some sort of third-party financial organization that could lend the members of the syndicate loans.

If you think that you're going to download an app from gplay, install a wallet and have your 100 addresses and be able to send to any address out there any amount you want you're deeply mistaken, the central bank will simply issue CDBC to commercial banks, those will allow customers to use it, with their account that is created and controlled by them with whitelistS and blacklistS whenever you plan on sending and receiving.

This is how China is doing and I seriously doubt anyone would take a different approach:

Quote from: paxmao on May 26, 2021, 05:24:20 AM

You would skip the retail banks, that is the point.

As you can see, nothing gets skipped Grin

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Quote from: paxmao on May 25, 2021, 10:47:34 AM

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

Not only difficult it would make monetary policies essentially useless. If the monetary policy won't be able to control the flow of money then how can it even be called a monetary policy? But talking about crisis time, in Bitcoin we are talking about a self-balancing equilibrium which means there shouldn't be any crisis in the very first place. But even if there is one it is very difficult to predict the consumer sentiments at the time of such a crisis? in Fiat we generally see lower demands in the market, but in the bitcoin-based economy, the demand is not bound to go lower as we are already in a deflationary style economy. It's really hard to imagine what a crisis in cryptocurrency time looks like.

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Quote from: paxmao on May 25, 2021, 10:47:34 AM

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries.

not at all. there won't be even a tiny bit of difference between any new digital (crypto) currencies and the existing digital currencies run by the banking system. even the same laws would apply including the KYCs and who can and who can't open an account.

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Quote from: paxmao on May 25, 2021, 10:47:34 AM

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

Why would banks loose control over something built for their Functioning? You are just getting confused among the two statements but in actual digital currency will act similar to digital payments which can be cleared with your respective banks.There will always be bank interaction like every transaction will go through the banking system and they can have control over your funds.Banks fear decentralisation and they never gonna let it use in their own CDBC which is actual point of these all digital currency for banks.They are digital form of your fiat used for daily transaction at every pos.

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Personally I view it as moving from one medium to another, but still keeping the same regulations and policies that we had all this time. With a CBDC, not much is changing actually, apart for some intricate details that the groundwork of which has not been laid yet, nor even discussed by economists today. In the future if any novel problems arise from using and controlling CBDCs, they would be able to figure it out, although of course we know that it will not be the perfect solution, just a band-aid one and hope the issue goes away on itself.

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I believe these digital yuan deals are only happening because they want to have a chance to monitor and control everything people do. Why are they hating on bitcoin all that much and constantly? Because, they know that there is no chance they could control people who use bitcoin (or other crypto) and that means we are talking about china here so obviously they will hate something they can't control.

Is there even a single second doubt in your mind that china is a pure dictatorship that kills everyone that faces them? I mean they literally kill the whole family when just one person goes against them. So obviously they wouldn't allow crypto, and that is why they are doing digital yuan. This is the worst part of it, other nations would be better but it is still incredibly centralized for sure.

oHnK

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I am still very confused about what form of CBDC they will release. All central banks in the world agree to jointly create CBDCs for each country. Until now, my country has also prepared it with various researches. It is lagging behind China but it looks like this is a serious agenda they are working on. So big is the impact of crypto that they are bothered by new technologies in the economy that they are not considered important in the process. They keep saying crypto is very dangerous because of the bubble it will continue to experience.

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