I can see no downside to the state being able to track every transaction you make and devalue it at will, charge negative interest rates to encourage spending to boost ‘the economy’. Read the research papers banks issue on this topic, the bankers are salivating.
Edit: typo
Charge negative interest rates? How do you think that will affect the banking sector.
Are you able to summarise the problems?
Are you able to summarise the problems?
- “the state being able to track every transaction you make”
- “[the state being able to] devalue [a digital pound] at will”
- “[the state being able to] charge negative interest rates to encourage spending to boost ‘the economy’”.
I hope that helps!
I think they just did.
I was hoping for a bit more than a general assertion of “bad things will happen” 🤷
He listed three problems with it. I don’t see a general assertion of anything in his comment.
Christ why is this so hard, I’m not trying to be obtuse. They listed three things that are statements without explanation of how they might come about other than that he’s stated them. I could state three random things too.
The negative interest rate, for example, is very much not one of “three random things”.
See this 2020 ECB working paper:
“Nevertheless, since a run into CBDC would be easier, it would be recomforting to have as extra tool the ability to impose negative rates on CBDC.” [CBDC = central bank digital currency]
or this 2018 BoE working paper:
“Under this regime any nascent increase in the demand for CBDC can be eliminated by a drop in the interest rate on CBDC. But there are potential limits if this requires a highly negative interest rate, and if further reductions of the interest rate below this level become politically difficult.”
Hopefully the hedging of that language is easy to remove. They talk about thresholds and limits and tiers, but the upshot is, maybe they’re kind enough to grant you a pittance on the first couple thousand, after that it’s zero or negative, because central banks tend to agree that what they DON’T want to create is a store of value, and so they will do anything they can to make you spend your CBDC as soon as you get it. In general, the “economy” does not benefit from you having a nice store of money saved up somewhere. Politicans and bankers want you money moving through their system, that’s how workers are kept desperate/subservient and the élite can continue to skim some cream off the top of each transaction.
We live in a deeply unfair and very carefully rigged system with hostile operators. Do your best to survive them.
This is the best summary I could come up with:
MPs on the Treasury select committee said that while it was true that the rollout of a central bank digital currency could trigger fresh innovation and competition in the payments sector, serious questions remained about whether the positive effects outweighed the risks and costs.
The MPs said in a report they were worried that creating an electronic form of currency – held directly with the Bank of England rather than commercial lenders such as Barclays, NatWest or Santander – could pose risks to the UK’s financial stability without careful management.
“It must be clearly evidenced that a retail digital pound will provide benefits to the UK economy without increasing risks or leading to unmanageable costs before any decision is taken to introduce it into our financial system,” said the committee’s Conservative chair, Harriett Baldwin.
MPs said ministers also needed to “alleviate privacy concerns” that the government or third parties could misuse personal data, by either tracking or controlling how users spend their digital funds.
“While we support the Bank of England’s plan to continue working on the design of a potential retail digital pound, I would urge them to proceed with caution and maintain a genuinely open mind as to whether one is actually needed.”
The Bank and Treasury said in a joint statement that they welcomed the report and would respond in due course: “We will also shortly publish the response to our consultation paper setting out the next steps.
The original article contains 547 words, the summary contains 241 words. Saved 56%. I’m a bot and I’m open source!
