When every transaction goes through FED, the government won't need to call or subpoena anyone to know where your money come and go.
Public enough that they can't play fast and loose like everyone else, but private where it matters in terms of not having literal Federally administered databases all just eafer for the reaping.
The Fed is fully governed by a federal agency. (The Fed Board of Governors).
The individual regional Fed banks are private-public hybrids, but they don't govern the system.
The return address can be made up. Although the general area it is sent from is recorded in the form of zip code.
The contents of the letter are also not known.
So even if that info got out, there’s really not much information beyond the fact that mail was received, and we probably know who sent it.
Thats a world of difference from cryptographically signed transactions between known parties with known amounts.
They will be able do that, not for you, but to you.
And so much more.
So they are forced to decentralize the currency to some extent, so that banks are the ones to actually issue the currency (after borrowing it from the fed).
The privacy implications of CDBC are a real problem, but the rapidly approaching end game of the current slippery slope is one in which, among other things, all participation in the economy is gated entirely by private banks. No sovereign country should accept that. And yes, any real implementation of a blockchain as a day-to-day cash replacement will have the same problem. These are legal problems requiring a legal solution, not a technical one.
[1] “The Fed vs. Stablecoins” https://www.bloomberg.com/opinion/articles/2022-02-01/hedge-...
[2] “Stablecoins: Growth Potential and Impact on Banking” https://www.federalreserve.gov/econres/ifdp/stablecoins-grow...
Because banks lend the money out, earn revenue from that, and thereby pay you interest. Banks aren't vaults; they are money circulation machines. Their business is finding the best investments, which creates efficiency in allocation of capital in the economy.
Interest paid on deposits is a free market (generally speaking); if that rate isn't worthwhile to people, they will start leaving and the bank will raise its rates.
> I am skeptical of this explanation for why we should let the banks hold our money.
You aren't 'letting' them and it's not a collective decision. You personally choose to give them your money. Put it elsewhere if you like.
> Or indeed remain alive as anything but a source of borrowing.
They can't lend money without deposits. The deposits are the money they lend.
I am fairly certain this isn't true, at least not in the US/UK.
No, that is evidently not happening. When I said "banks", I meant "literally all banks" (minus tiny regional credit unions or the occasional fluke that might give you up to 1.2% - wow, that is so much money, I could retire on it). People generally don't move banks either. They tend to stay with whomever they started banking first.
> You aren't 'letting' them and it's not a collective decision. You personally choose to give them your money. Put it elsewhere if you like.
My main alternative to holding cash in a bank is cryptocurrencies (which are accepted ~nowhere), or holding my money as cash. Handling cash has been in decline even before the pandemic, and nowadays I very rarely see people pay cash. Assuming that cash remains on the current trajectory, banks will become the only mainstream option.
> They can't lend money without deposits. The deposits are the money they lend.
They have enough money saved up in their coffers for that. I also can't imagine that most loans for a higher value than a credit card account would be entirely unsecured. This is especially true for house purchases - it's generally impossible to buy the house you want without a mortgage, and the house is what you lose I'd you don't pay them back.
They were authorized to print 3 trillion, but actually printed 30 trillion
All across the world a China style social credit score called ESG is now being adopted by banks.
What happens when they decide you used up your quota? No flight, no meat or no car ride for you because they won’t let you spend your money.