The Fed's Digital Dollar Would Be 'Nightmareville' for Privacy | Hacker News Reader

The Fed's Digital Dollar Would Be 'Nightmareville' for Privacy

reason.com

28 pointsdanboarder8 comments

Really all of the proposed benefits could be achieved in much less sexy ways. Want to bank the unbanked? Restart post banking. Want to improve transfer speeds? Copy what every other country has done and create a faster electronic clearing system and mandate banks adopt it. So on. So given we have solutions for all these proposed benefits that have been implemented before, elsewhere, I question the true motives behind CBDCs. Especially given they can do far more than these claimed benefits, ruin privacy, allow different interest rates and time limited currencies, control what your money can be used for. Etc. Why would we want to do that?

I always feel like I'm missing something when the term "unbanked" is used. As far as I can tell, there are people that have opened a bank account and there are people that have not opened a bank account. It seems odd to call the second category of people "the unbanked" as it implies they are being prevented from getting a bank account when in fact they can get a bank account at any time.

It's not so easy when you're paid in cash, and there's no nearby bank branch to deposit your cash. Even checks aren't so great when you don't have a nearby branch to deposit them.

There are a lot of reasons why poor people can't maintain bank accounts. Everything is harder and more expensive when you're poor. Banks don't want to open branches where people don't have much money; it's not profitable.

They're the ones that "unbanked" refers to. There's a lot of thought about how to get them over that initial hump of having a bank account, which might make their lives better.

I'm hoping the fed can successfully build and deploy some standard alternative to the noxious brew of ACH and wire transfers ubiquitous today, even if this attempt fails to take. ACH is awfully complex and high-latency, and wires are expensive and user-unfriendly.

FedNow Instant Payments goes GA 2023. It’s in beta now.

https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...

https://www.northbaybusinessjournal.com/article/industrynews...

Interesting, thanks for sharing @toomuchtodo , do you know if this is a replacement for the ACH system that has been around since the 70s?

It will effectively replace ACH for <$25k transactions (larger amounts can traverse FedWire), although the intent was to offer a public infrastructure option to commercial banks to prevent The Clearing House’s RTP real time payment rails (“Zelle” from Early Warning Systems runs on these rails) from becoming a monopoly, possibly gating smaller banks and credit unions from a competitive deposit account feature.

I would give up my financial privacy if my taxes were done automatically.

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