In Brazil it is called PIX, and was implemented in 2020. Last month it has processed more than 3 million operations.
Works 24/7, 0 fees to end users, low cost for business. IMO, going cashless is not an "if", it is a "when".
The system works if democracy works. If we lose democracy, of course, the blocks built on top of it would crumble. That does not means everyone should stop building on top of democracy. Even more so for things that makes the life of the people better.
You really don’t want the folks in power to have even more of that kind of power, no matter how convenient it is most of the time.
At least Visa/MasterCard, etc. mainly just care about making money. The gov’t doesn’t even have to care about that!
Using ‘we’re currently in a democracy’ to justify creating an even more tempting and likely to be abused tool of oppression is not a good idea.
In your hypothetical scenario of nazis taking the gov, lets assume there is no central database. Nazis would go: ok banks give me your databases or else. Banks gives databases because they care about money. There, now nazi have central database. And in this scenario you have deprived the people of enjoying a really nice service.
Where is the win here I don't see it. Let's not do good thing because, oh, in a doomsday scenario good thing might be bad. Like, shouldn't we channel efforts in ensuring doomsday never comes to reality in the first place? This way we all enjoy good life with ever improving services.
I’m also pointing out not-that distant past events, and you’re also just completely ignoring them.
Good luck! Just don’t do it in my economy.
All the transactions are controlled by multiple independent parties, whose interests do not align to do that as they’d lose their customers to their competitors when it came out what was happening.
Some of the data does go through central clearing at some step (ACH, Fedwire), but credit card charges, Zelle, cash, checks deposited at the same bank, etc. do not.
With cash, you stay out of those databases in the first place.
Definitely not impossible, but much harder than if there was a single centralized system - dramatically harder.
Cash is king though, as you say.
BTW, Brazil Central Bank now is "independent", that is, their president was indicated by the looser candidate can do what he wants. In USA at least they respond to Congress.
I say that as someone whose government currently doesn't like them.
If everyone is using gov’t e-currency, you’d not have that option.
Many of the arguments for privacy focused technologies is not that it should be impossible for the government to infiltrate or disrupt your life, but that it should be somewhat impossible for the government to infiltrate or disrupt millions of people's lives for the tiny cost of some compute cycles. The former is necessary for law enforcement. The latter is a recipe for genocide.
Also, thinking of it from a systems reliability perspective it’s a massive Single Point of Failure.
That system stops working (due to kleptocracy, or shitty rules, or a mistake) and literally the largest economy in the world grinds to a halt nearly instantly.
It would make the days of dealing with cash (which has it’s hassles) seem like Utopia.
BCB is a governmental institution, composed mainly of career civil servants hired rather than appointed or elected, whose institutional tenure typically survives transitions of political leadership. They answer to the government, not a political party.
The Complementary Law No. 179/2021 defines a four-year term for the nine members of the BCB’s Board of Governors that does not coincide with the term of office of the President of the Republic, as well as establishes the rules for the dismissal of the Board’s members.
The personal information and the information related to the operation (value etc.) transmitted in Pix is protected by banking secrecy, as governed in Complementary Law 105, and in the provisions of the General Data Protection Law.
All transactions take place through digitally signed messages that travel in encrypted form.
International institutions such as the Bank of International Settlements have recognized PIX as a successful case:
https://www.bis.org/publ/bisbull52.htm
A similar service has been prepared for years, and US Federal Reserve will launch FedNow this July:
CBDC will allow govts, at their discretion, connect your money to your ‘good citizen score’ (much like China’s Social Credit Score) and lock you out of society.