The Central Digital currencies will make monetary policy more difficult - page 3.

crwth

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https://linktr.ee/crwthopia

If they keep the same ways like in the current money that we have.

Unlimited Supply
Print how many they want
They want control

I'm worried that most of the time is the part where they can print anytime they want. I haven't read much on CBDC's, but if they keep the same style and ways they have, there's no point in doing it anymore. Like it's the numbers in our bank accounts already, digital. So why do they need to make this?

adriaparcerisas

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Interesting topic. First, central banks have internalized that private cryptocurrencies like pound may be a reality and that, if their use were to become widespread, they would erode the central bank's ability to influence the money supply and interest rates. Second, the pandemic may have accelerated the trend to use less cash. A third factor to consider is that if such a scenario emerges, many central banks would also consider issuing a currency of their own to keep their bank from losing ground.

In this rapidly changing context, central banks have taken an important step forward in the last year and a half and are now seriously contemplating the possibility of issuing a digital currency in the future. But is that the solution? In my opinion it depends, because if what they intend is to create a global digital currency, to solve the problem of the decline in the use of cash, the problems would be the same, the centralization is evident and with this little seems to change. However, if what they intend to do is to create a currency for each bank, things would change, but I doubt it. So, from my point of view, yes, I agree, central banks relegitimize and make monetary policy more difficult.

avikz

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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.

Let's not get confused about a digital currency. A digital currency is a digital representation of a physical currency which can be transacted through an intermediary like banks. Everything else will remain same as fiat currency. The way you operate your online banking today, the digital currencies will be operated in a Similar manner. So make no mistake thinking that banks will loose its control over it.

No central bank would risk such a proposition which would eliminate the need of a banking intermediary. So digital money will be printed digitally whenever the need arise. There will be literally no difference in fiat and government issued digital currency.

paxmao

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Do not die for Putin

Quote from: fulcare on May 25, 2021, 02:44:21 PM

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.

I don't think I am getting your point. This is just a question of policy making, setting rules and laws. If you are not allowed to hold an account with a central bank you are still forced to stick with intermediaries

You would skip the retail banks, that is the point. Your perspective is from the crypto world clearly, you consider that a Central Bank is an intermediary, but that is not really the case, as they issue the currency, so you would be holding an account with the original supplier as opposed to having to go through a retail bank. However, the post is more about how this could make monetary policy more difficult to implement as one of the tools (the "multiplier" of the banking system) would be lowered.

fulcare

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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.

I don't think I am getting your point. This is just a question of policy making, setting rules and laws. If you are not allowed to hold an account with a central bank you are still forced to stick with intermediaries. Beyond that, the whole lending apparatus could be changed and still have the ability to print more money or a certain multiplier for every digital coin you hold on deposit. Like Tether without collateral. Where is the issue if a commercial bank can just ask the central bank to print and transfer on demand for a new loan? In fact it could even become crazier than in the past.

Sterbens

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Duelbits.com

It is true that this has a profoundly negative impact on financial stability, which can increase panic in banks as commercial banks face a shortage of cash reserves to pay. perhaps we will witness more holding Bitcoin as a hedge, when trading in stablecoins denominated in euros or dollars.
It is worth remembering, last spring that the central bank warned, that if the central bank of any country is to launch a CBDC, it must anticipate its implications carefully, as this has to do with monetary policy and overall economic stability.

paxmao

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Do not die for Putin

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.

Topic: The Central Digital currencies will make monetary policy more difficult - page 3. (Read 428 times)