The Central Digital currencies will make monetary policy more difficult

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Quote from: oHnK on December 21, 2021, 09:48:35 AM

The CBDC concept that is being planned by Central Banks in all countries is currently still unclear, for example in my country. However, China can indeed be considered a model for the follow-up to this great program. In accordance with the Binance CEO's view that, if CBDC will be released freely in the market then it will be a good choice and for the market but don't let the government with all its political forms limit CBDC in such a way just to beat BTC. That should be avoided.

I agree with you, if we get to see China has a very good economy compared to any country, it is a country that survives because of its workforce, but the digital currency is totally FIAT and even if it uses blockchain technology it has a lot to do with it. See with everything that can be called crypto, for something they banned them, they made a big FUD to BTC and they still do it, this type of FUD before in 2017 was very relevant in the BTC market, not now, now it is more Likewise, in fact when there is fUD from China, it is most likely that the price of BTC will rise.

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Quote from: oHnK on December 21, 2021, 09:48:35 AM

The CBDC concept that is being planned by Central Banks in all countries is currently still unclear, for example in my country. However, China can indeed be considered a model for the follow-up to this great program. In accordance with the Binance CEO's view that, if CBDC will be released freely in the market then it will be a good choice and for the market but don't let the government with all its political forms limit CBDC in such a way just to beat BTC. That should be avoided.

Are you sure that this solution will not be centralized and controlled in reality. And a government-run China? And it will be as they want, and nothing to do with cryptocurrency, free and decentralized, CBDC did not have and does not have! Wherever you want to use CBDC, you will be forced to disclose your identity (Chinese banks and financial institutions do not work with anonymous accounts), any of your inappropriate behavior - and your account in CBDC will be blocked, and only the Chinese court will decide what to do next. Today China, unfortunately, chooses the path of totalitarianism and total control, and not only over its citizens.

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

anyone could potentially hold an account on a central bank skipping the intermediaries.

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

you would be holding an account with the original supplier as opposed to having to go through a retail bank.

What will happen when skipping the retail banker? Why those intermediaries are important against monetary policies for the case of CBDC? If it is all about central bank should not participant in banking services on CBDC means how right now they are also doing banking services with fiats without any major problems right now?

Quote from: avikz on May 26, 2021, 06:58:41 AM

There will be literally no difference in fiat and government issued digital currency.

This is what exact my understanding about CBDC. If governments need to alter their momentary polices just for the case of inducing CBDC, I guess most government will skip their idea of getting into digitalization of their fiats; which must be a positive news for cryptos.

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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 am yet to fully understand what this central bank digital currency is all about and how it is going to work. OK I do understand that it is going to be paired with the Fiat currency, which means that both of them are going to have the same value, but what I’m Yet to understand is whether these central bank digital currencies are going to be a different currency/assets on their own that can be printed by the government at anytime and different from the fiat, or they would just be linked to the current Fiat that we are making use of now, meaning that every time one Fiat is printed, it is also represented in a digital form.

Although I don’t really see the need for these central bank digital currencies, because we already have means for doing transactions online, so it’s totally unnecessary, we have bank apps and we have PayPal, so what’s the need?

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Quote from: oHnK on December 21, 2021, 09:48:35 AM

The CBDC concept that is being planned by Central Banks in all countries is currently still unclear, for example in my country. However, China can indeed be considered a model for the follow-up to this great program. In accordance with the Binance CEO's view that, if CBDC will be released freely in the market then it will be a good choice and for the market but don't let the government with all its political forms limit CBDC in such a way just to beat BTC. That should be avoided.

The problem with China is that information is never clear, so big problems may not really be that big and big successes are most of the time difficult to believe. The centrally issued currencies are absolutely terrible for privacy. The control of the issuing entities over who does what and when is nearly absolute. That, in Europe or US, may be a concern, but in China is simply a terrible problem as the CCP as clearly shown intent of controlling the individual micro-behaviour of individuals even by means of a "social credit" systems that require citizens to be "good and loyal".

oHnK

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The CBDC concept that is being planned by Central Banks in all countries is currently still unclear, for example in my country. However, China can indeed be considered a model for the follow-up to this great program. In accordance with the Binance CEO's view that, if CBDC will be released freely in the market then it will be a good choice and for the market but don't let the government with all its political forms limit CBDC in such a way just to beat BTC. That should be avoided.

Ozero

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As far as I understand, we are talking about the digitized currencies of states, their stable coins of central banks. I do not think that their release will negatively affect the existing financial system and bring the onset of the global economic crisis closer. Such coins will be faster and more efficient and will be much more useful for the banking system and ordinary users. Soon we will be able to see this in practice, when states begin to put them into circulation on a massive scale.

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Quote from: semobo on November 22, 2021, 11:53:34 PM

It will make more easier for them in my opinion because the name of such tokens are CBDC means Central bank has the complete control and completely digitized money so they can print money simply and liquidate them into the people via banks but CBDC isn't supported by the most of the governments yet and I hope they won't because it will result into uncontrollable inflation rate at the time of economic crisis.

It is not that factual to say that CBDC will lead to uncontrollable inflation. That can happen because the government don't really keep checks on what they should do or what they need to do. Even fiat should lead to uncontrollable inflation if the government knows exactly how to go about controlling it so likewise the challenges of fiat may happen to CBDC and not just because it is digital currency then it is bad and will be facing uncontrollable inflation, the challenge is with government that don't do proper diligent work on her agencies in charge of different duties.

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It will make more easier for them in my opinion because the name of such tokens are CBDC means Central bank has the complete control and completely digitized money so they can print money simply and liquidate them into the people via banks but CBDC isn't supported by the most of the governments yet and I hope they won't because it will result into uncontrollable inflation rate at the time of economic crisis.

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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 do not think that the digitized currencies of the central banks of the states will somehow complicate their monetary policy. On the contrary, their digitized currencies will be more efficient in everything and the current global financial system will only benefit from this.
Stable coins of states will actually not differ from their usual currencies, including in terms of centralization. Digitized currencies will also be strictly regulated by central banks and, if necessary, digitized accounts will be blocked. There will be work efficiency, but nothing else will change.

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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.

Maybe some of us would think that it will somehow destroy the balance which will lead to having monetary policies getting messed up more. Banks, regardless if it is fiat or digital state currency, will still be under the government's control which means it is far from becoming a recognized cryptocurrency. We can call it digital money hence it is not the same with cryptocurrency. On the other hand, the imbalance caused by the innovation in the monetary system will surely face crisis at the beginning but sooner or later, things will get settled down and the balance will return as well as the peace with regards to the issue.

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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.

Sorry, I could not get your point; how CBDC will skip intermediaries but traditional fiat in electronic format will not? I mean in my understanding, all CBDCs are just digital version of what we have today in the name of fiats. So, could you explain more on by intermediaries, whom you are referring; which definitely will help me to interpret your point in more better way.

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

The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

That is the old problem of our governments and I guess that will not intensify just because of adoption of central digital currencies. I mean governments will keep printing more than their reserves even they delay adopting CBDC.

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Quote from: Kong Hey Pakboy on August 02, 2021, 01:55:11 AM

That's it's just the start, these people don't exactly know yet what exactly they should do before putting some sort of regulation on cryptocurrency and I don't think that we will ever see a good regulation this year for cryptocurrency because there's still a lot of things that these government have to learn and understand.

Digital currencies are inevitable but I truly agree with your sentiment. Most people in regulation sectors don't even know the fundamentals of cryptocurrency. Monetary policies have to be amended but would take herculean effort from the crypto community to lobby this in favor or just regulating but not halting the progressions or tax it heavily.

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That's it's just the start, these people don't exactly know yet what exactly they should do before putting some sort of regulation on cryptocurrency and I don't think that we will ever see a good regulation this year for cryptocurrency because there's still a lot of things that these government have to learn and understand.

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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 really think that the central bank digital currencies will make banks obsolete.
Someone will have to evaluate the customers,who want to borrow money.
The monetary policy of the big central banks is getting less and less effective mostly because of the negative interest rates and the increasing levels of globalization.
I don't think that fractional reserve banking will disappear due to CBDCs.Fractional reserve banking can be done with digital currencies."Money printing" can also be done with CBDCs.
I also think that "skipping the intermediaries",like you said,can have more pros than cons,but we still don't know what will happen.
What I don't like about CBDCs is that they are trying to imitate cryptocurrencies.

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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.

The digitized currencies of the central banks of states are so called because they are issued by the central bank and all transactions will be under their control. Banks in this case will act as intermediaries and will be able to suspend or cancel any transaction.
Therefore, I do not think that the use of this digitized currency will complicate the work of the banking system. On the contrary, it will work more efficiently when using blockchain technology.

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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 believe in any digital state currencies. They will still be regulated by the government. The main feature of digital money is decentralisation and uncontrollability from authorities, but digital euros, rubles, yuan will be under control, so it is the same as just non-cash money but on blockchain instead of bank account. And I don’t understand why you think that it will be impossible for the government to print money, it will also be easy for them.

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Monetary Policy needs to have control over the money supply as well as needs to support the economic growth. With the term central digital currency, it means they're are controlled by an authority. Someone please clarify it for me, if we're talking about the decentralized crypto then it'll be difficult for the government to make plans on emergency. Central digital currencies are being developed by the countries itself.

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The digital currency issued by the central bank is still centralized, and it is supervised by the government. The government has complete control and can monitor bank accounts through the banking system.
But the issuance of digital currency may also promote the growth of the currency economy. People learn about the concept of digital currency and blockchain, and increase their awareness of this new thing, thereby attracting more people to invest in it.

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Quote from: Rruchi man on July 31, 2021, 09:46:51 AM

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.

I second the first part of your post as I believe CBDC's aren't going to be launched in reaction to fiat currencies or to do away with paper money, they both will function in the same way, just one will be digital, whilst the other will be in paper form, they'll coexist with each other without much fuss cause the government controls the both of them, and that's exactly how they want it.

Having said that, I don't really believe CBDC's are being created cause of the desire for innovation, I believe this ideology is more directed towards competition, first competition against other economies launching CBDC's as well (like China v U.S.), and then competition against Bitcoin, though that's erroneous on the part of the government as Bitcoin is decentralized and operates differently from Bitcoin. Tbh, I don't really fancy the idea of CBDC's, most of the latest regulations and sanctions against Bitcoin is just to pave way for CBDC's. The thing is, the government would understand that in the long run Bitcoin wouldn't really be affected by most of their shady and selfish moves.

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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.

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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.

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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.

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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.

BrewMaster

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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.

worle1bm

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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.

dothebeats

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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.

el kaka22

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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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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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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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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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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 (Read 428 times)