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Comment by jqpabc123 | Hacker News Reader

Thanks for this laundry list of conspiracy, fear, uncertainty and doubt.

Central bank digital currencies differ from existing digital money available to the general public, such as the balance in a bank account, because they would be a direct liability of the Federal Reserve, not a commercial bank.

As far as the public is concerned, the only change will be faster transaction processing and new capabilities being offered by your bank --- such as transferring funds to friends/family from your banking web site/app in real time while sitting at the dinner table.

All purchases will continue to be made in good ole US dollars and all accounts will remain with your commercial bank of choice and subject to existing laws.

Basically, this will facilitate interbank transfers in order to provide a much needed update to the aging and slow ACH system which was designed for the paper check era. No banks will be killed in the creation of a CBDC.

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Canadian citizens have already had their bank accounts blocked for daring to protest against their government. [1] A German citizen had her bank accounts blocked for reporting from Donbas, presumably against what the German government regarded as being the truth. The same thing happened to her father (?!). [2]

So some of the things the OP is worrying about are already happening, no “conspiracy” about it.

[1] https://www.nationalreview.com/news/canada-unlocks-vast-majo...

[2] https://yournews.com/2022/06/15/2360919/german-govt-labels-j...

By "protest" you mean terrorize a neighborhood of residents by subjecting them to continuous noise, fire, pollution, blockades, and physical harassment, right? What happened in Ottawa in Feb 2022 was way beyond the bounds of a reasonable protest.

Canadian citizens have already had their bank accounts blocked

This only happened because of Canada's CBDC. Oh, wait ...

You make a sarcastic response here but the point the parent is making is that we have these grievous injustices happening within the confines of the current system. If we move to the CBDC era without legislation to protect the privacy and human rights of citizens, our governments will have far greater capabilities to erode those rights.

So allowing banks to transfer funds between each other and the Federal Reserve in real time will erode your rights?

Don't look now but they do all this already using ACH --- just more slowly and inefficiently.

Buckle up chicken little, your sky is going to fall because the economic case for it is overwhelming.

More like the political case for it.

Do Canadians or Germans have constitutionally dictated freedom of speech like Americans do?

Both Canadians and Germans are supposed to be living in a "rules-based world" which is now, supposedly, under attack. I had suspected that that "rules-based world" included the liberty/freedom of protesting against your government's policies, this is not a "freedom of speech" issue in the American sense.

> the only change will be faster transaction processing and new capabilities being offered by your bank

Blockchained dollars would centralize the currently-decentralized payment system. Putting together an American's transaction history requires guessing where they have payment nexuses and then issuing subpoenaing. At each of those steps there are Constitutionally-challengable investigations and searches. CBDC would bring blockchain's centralization and eager evaluation to American finance, making searches easier and more comprehensive.

> Central bank digital currencies differ from existing digital money available to the general public, such as the balance in a bank account, because they would be a direct liability of the Federal Reserve, not a commercial bank.

Semantics. People want to know their savings are guaranteed and they can't possibly be lost. The FDIC does just that. The public doesn't care if the ultimate grantor is the Fed or the Congress or the Senate.

And I think rightfully so because in the end the ultimate grantors securing Americans savings are always and in any event 3 entities:

1) the U.S. Army

2) taxpayers alive now

3) future generations of taxpayers.

This digital dollar or digital euro is something that nobody asked for and nobody wants. At least with crypto you can argue that they fill the role of online casino in disguise. Which isn't really productive but at least there are people who actually flock to it.

This digital dollar or digital euro is something that nobody asked for and nobody wants.

Digital dollars are what most people use every day --- credit and debit cards. When was the last time you paid with actual paper cash?

The only difference with a CBDC in place will be faster processing and lower costs due to realtime interbank transfers that are currently only available from 8AM until 5 PM on weekdays --- weekends and holidays excluded.

When was the last time you paid with actual paper cash?

I almost exclusively use cash. The exception is for the few things that local stores do not provide and for car insurance. I will remedy some of that soon e.g. Surety Bond. Even then I can still use cash to pay a local transport vendor to drive into a bigger town a few hours away and pick things up for me.

You are the exception rather than the rule. But the good news is, you won't be affected at all.

No one is proposing to eliminate the use of physical cash. Nothing about a CBDC requires cash to be eliminated. Any claims to the contrary are pure FUD.

CBDC may feel the same to the end user. But it is fundamentally different in terms of what it represents. The possibility of a surveillance police state should scare anyone with a brain.

Accounting for economic units is evident as far back as the Akkadian empire 5,000 years ago. Double-entry bookkeeping, central banking, ACH, SWIFT, etc. are iterations on a theme. CBDCs represent an incremental shift away from batch processing toward real-time messaging.

The current paradigm of universally KYC'd accounts, easily surveilled ACH, and a government-run interbank FedWire service already offer complete transparency to law enforcement and the treasury department.

True to some extent. But digital money brings it to a whole new level. Now they can shut down accounts. CBDC will allow a finer-grained control of all transactions. The ability to monitor every transaction you make.

Now they can shut down accounts.

You think your bank can't shut down your account now?

The ability to monitor every transaction you make.

You think your bank and CC company can't do this now?

The only way to avoid being "monitored" is to use cash. And a CBDC won't change this.

But it is fundamentally different in terms of what it represents.

It is fundamentally no different than what already exists --- just faster, more capable, more convenient and less costly.

If that was really the case why don't say JPMorgan and Wells Fargo enter in a partnership to provide such service?

If it's really cheaper, faster more convenient then they'd be enthusiastic about doing it because it would look good for their bottom line.

Money at the end of the day represents trust.

If the Fed is the most trustworthy entity then JPM and Wells Fargo are at #2 and #3. Nobody would care if the #2 and #3 institution exchange money between each other instantaneously and 24/7/365 but only settle their accounts at the Fed weekly or bi-weekly.

This thing for everybody to have an account with the Fed in the form of tokens (digital dollars and digital euros) is something really strange and that nobody has asked for. It is the project of some beurocrat which has seen a topic of interest among the population (crypto) and wants to look good to his superior or wants to claim that "I was at the helm of the team which developed the Digital Dollar".

If that was really the case why don't say JPMorgan and Wells Fargo enter in a partnership to provide such service?

Some banks do this --- but the utility is severely limited unless all banks and the Federal Reserve do this --- and at low cost. Enter CBDC.

This thing for everybody to have an account with the Fed in the form of tokens (digital dollars and digital euros) is something really strange and that nobody has asked for.

This thing for everybody to have an account with the Fed --- is not what is being proposed. Your bank account will stay right where it is now --- just with new features and capabilities.

No banks will be killed in the production of a CBDC. If it were otherwise, rest assured you would have heard about it from your bank by now.

That is a lot of faith and trust to put in the governing institutions. Even if this is not abused immediately, the temptation to do so somewhere down the line pretty much makes it inevitable. Cash may be imperfect and not technologically convenient, but it does offer the ability of third-party transactions to remain private.

Cash may be imperfect and not technologically convenient

How many times does this have to be repeated --- no one is proposing to eliminate cash.

Everything that a CBDC will do is already being done --- in a slower, less convenient and more costly manner. See ACH.

See SWIFT and various payment clearing systems in Europe. You don't need a CBDC to do this.

But a CBDC is certainly useful when the current fiat system has been blown up through hyper-inflation and there's no alternatives. It will usher in a new era of mass surveillance and control which for some inexplicable reason you seem happy to welcome in.

See SWIFT

SWIFT is an international transfer system that is outside the purview of a CBDC.

and various payment clearing systems in Europe.

Like the EU's SCT Inst?

   SCT Inst stands for SEPA Instant Credit Transfer scheme. It was introduced by 
   the Euro Retail Payments Board (ERPB) in order to enable rapid electronic 
   payments within the eurozone. In a nutshell, SCT Inst facilitates an instant 
   or near-instant clearing of a transaction between originator and beneficiary.

ERPB = Central Bank

Credit Transfer Scheme = Digital Currency

Put them together and what do you get --- effectively a CBDC system denominated in Euros instead of Dollars --- minus all the hyperbola, misinformation and doomsday prophecy attached to CBDC on this side of the pond.

In other words, Europe already has a CBDC which explains why their banking system is more advanced than in the US.

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