Mastercard To Help Central Banks Test Their Own Digital Currencies (decrypt.co) 24
International payments provider Mastercard has launched a virtual testing environment to help central banks around the world test their Central Bank Digital Currencies (CBDCs), said an announcement today. From a report: "Today, Mastercard announced a proprietary virtual testing environment for central banks to evaluate CBDC use cases. The platform enables the simulation of issuance, distribution and exchange of CBDCs between banks, financial service providers and consumers," said the company. According to the announcement, the effort would allow banks to test whether CBDCs fit them and are feasible to be issued -- locally or regionally. "The virtual platform can be individually customized to the environment in which the central bank operates, allowing them to [...] simulate a CBDC issuance, distribution and exchange ecosystem with banks and consumers, including how a CBDC can interface with existing payment networks and infrastructures -- e.g., cards and real time payments," said the announcement.
what for? (Score:3)
Currencies are already mostly digital including the U.S. dollar. Why does a bank need to make one? And in other news, looking at the price of bitcoin over the last month, "mr. stark, I don't feel so well." Good thing I never went in for those gambling game tokens.
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Bitcoin is worth what people think it's worth. That's the nature of the beast with decentralized "money". A bank is going to want a digital currency that is free from market manipulation and has a mutually agreed upon value for all parties involved. That means, yeah, they're probably just putting a PR spin on some new wire transfer system.
It's probably just as well. When I transfer money between financial institutions, I expect it to arrive at its destination with its value intact.
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Currencies are subject to market manipulation though, not seeing how this solves any problem. Only creates additional ones of exchange value at time of transaction.
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You don't get it, big corporations with governments in their pockets includes banking. They already have full control of your money, has been true for decades. Blockchain doesn't make anything new and doesn't solve any real world problem with money.
Blockchain, a bad solution to a distributed database. The solution no one needs.
Mastercard ... test their Digital Currencies (Score:4, Interesting)
Mastercard has launched a virtual testing environment to help central banks around the world test their Central Bank Digital Currencies
Does it spend -- in other words, do people accept it? Then ship it, we're done; if not, then we're not.
Sure hope they've got a stable internet link and provider everywhere. Man, that old crappy untraceable currency -- you could use it literally anywhere, but this new stuff that requires you to be online and not under a DDoS attack is just so much better!
Oh, but digital currency isn't traceable either? You're right, it's not -- until it suddenly IS in which case every transaction from that wallet is also known. Yeah, that's just so great you should sign me up for three so that I can ignore them all.
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people will accept it, until they don't. and then the banks will collapse again
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Specie all over again (Score:2)
Banks basically printing their own money. It probably caused a dozen or so collapses over the years. WHat could possibly go wrong?
Makes no sense (Score:3)
Perhaps someone can explain this me? This makes no sense.
The advantage of digital/crypto currency is removing the need for someone to act as the central payment processor, i.e. remove the middle man. Why would a payment processor like MasterCard do this? It is basically business suicide.
Unless this is a "fake" digital currency that actually route everything back to existing payment processors? In that case, who would use it?
Re:Makes no sense (Score:5, Insightful)
Exactly. Currencies are already digital. It's not like there's some gnome running around behind the scenes lugging palettes of cash or gold between banks. It's ALL digital, already.
The point of cryptocurrency is decentralization. This is the opposite of that. This is standard banking and nothing more than a PR ploy. Don't be fooled.
Re:Makes no sense (Score:4, Interesting)
A digital currency doesn't have to be a cryptocurrency.
A digital currency could provide microtransactions not sensibly viable with existing currencies.
A digital currency could reduce central bank overheads.
A digital currency could enable a central bank to exist where currently it doesn't.
A digital currency offers various other possibilities, none of which require it to be decentralised, anonymous or valid for buying sex slaves on the dark web.
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The advantage of digital/crypto currency is removing the need for someone to act as the central payment processor, i.e. remove the middle man.
No it isn't, in fact they have the payment processor middle man baked in.
For example with Bitcoin you have to pay to have your transaction validated. You can set the payment per transaction. The more you pay the faster the transaction is validated by other nodes on the network, who get the payment. If you don't pay enough it can take hours or days for your transaction to go through.
Obviously Mastercard loves this idea because it's basically their business model.
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Already there are too many currency (Score:1)
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Why not do a digital currency them self and make them the standard currency for all over the world.
Because central banks, by controlling the supply side of a currency, exert economic impact on the country (or countries) that use that currency.
That economic impact creates political power, which is why (for instance) the EU set up the Euro. Look at the terms and conditions imposed on Greece because they didn't control their own currency.
So even if you have a global digital currency, central banks will still have their own currencies, and won't fix the exchange rate of those to a digital currency that they
"Help" (Score:1)
Help themselves to more of our money, you mean.
After all, a central bank is a monopolism. And if you got your fangs in that particular neck, *you* got a monopoly! Committing a crime but staying techically legal.
Central bank digital currency gives them more cont (Score:1)
The reason why Central banks want to do this is to solve the distribution, opaqueness and velocity problems:
Currently they can give / loan currency to primary banks, and adjust interest rates, but then they have to wait a while to see how their changes play out (opaqueness) and are at the mercy of the banks (distribution) With CBDC, they will be able to see who buys what when and how often to get real time feed back. (Solving Opaqueness), with the government paying the people directly (distribution problem)
Say bye bye to CASH (Score:1)