Top Fed Official Warns About US Falling Behind in Digital Dollar Race (axios.com) 46
A top Federal Reserve official gave a stark warning to House lawmakers on Thursday: Move too slow in issuing a central bank digital currency and the dollar's global dominance could eventually be in jeopardy. From a report: "We shouldn't take the dollar's global status as the dominant payment currency for granted," Lael Brainard, the Fed's vice chair, said at a congressional hearing on central bank digital currencies (CBDCs). "If major foreign jurisdictions move to the issuance of their own digital currencies, it's important to think about whether the United States would continue to have the same kind of dominance without also issuing. I would hate for Congress to decide five years from now: 'You, Federal Reserve, you need to catch up. China's out there. The [European Central Bank] is out there.'" The Fed just wrapped a public comment period on its highly-anticipated report laying out the pros and cons of developing its own CBDC. This came amid the explosion in popularity of stablecoins, which aim to tie their value to a fiat currency (like the U.S. dollar).
Race? (Score:5, Funny)
What race? There is no race. Either people use the dollar or they don't. Having a buzzword-powered digital version of the dollar won't change that.
Re:Race? (Score:5, Insightful)
Re:Race? (Score:4, Insightful)
Re:Race? (Score:5, Insightful)
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but obviously his Social Security payments will be much lower.
How do you get lower than zero? SSI becomes insolvent sometime next decade.
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Fix that, and I bet it the solvency expiration date pushes out quite a bit.
Is it fair for high earners to essentially subsidize future workers? Who knows. If we're in part responsible for the system that produces them, I say yes. But it's a contentious issue. In my gut, I suspect you're right. This political football will be kicked around until it's insolvent.
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I am old enough to remember when SSI was going to become insolvent by 2012.
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I don't think there's anything wrong with digitizing transactions as they are now, I just think it's a good idea to keep the grey economy going.
Re:Race? (Score:4, Funny)
There is a mineshaft gap. Better start digging.
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The US Dollar is a digital currency.
Most transactions in our everyday life from a cup of coffee to a mortgage payment are made via electronic transaction (numbers in a bank database). In business to business transactions it is all digital transactions -few people haul suitcases (or pallets) of cash around.
I own a retail business. Less than 10% of my customers pay via cash.
Most of the dollars in our banking system do not physically exist. The banks don't even use real cash to settle up between each other
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Most of the dollars in our banking system do not physically exist. The banks don't even use real cash to settle up between each other -it is just numbers in a database, aka digital currency.
I'm not really sure it's possible to tell whether or not they do. I'm also not entirely sure it matters, since they're created and destroyed as needed, both physically and virtually (according to monetary policy).
So it's not quite what would normally be considered a digital currency, but it's definitely also not standard fiat cash. But no currency is anymore.
Translation (Score:5, Insightful)
I'm not sure the federal reserve needs a blockchain of any sort and there's no reason for them to get involved in any kind of digital currency. Cryptocurrency has its use cases, but this is not one of them.
Naked and petrified (Score:2)
*exceptions made where the would-be taxee has paid enough in bribes, lobbying, and political favors.
Re:Naked and petrified (Score:5, Insightful)
It's kind of about stopping crime, in that they want to stop any crime which is not profitable for them. Money laundering through legal means, where you hide the money in an anonymous perpetuity, is A-OK.
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Sometimes you win by NOT racing (Score:2)
Just my initial reaction to the story, and trying to decide if I should take the risk of racing towards FP on such a shallow twitch. But what could I said about the bogosity of cryptocurrency that hasn't been said already? But dollars aren't crypto. Yet.
So what more does the perfectly named Brainard think we need to do about it? We already have SWIFT, and that seems to be losing its race, too. We want to make the currency market more like the stock markets, where machines gamble against each other on the mi
Lemmings race too. (Score:2, Funny)
That's all.
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Obviously speaking in a vacuum (Score:4, Interesting)
This person pretty obviously hasn't been paying attention to what's going on in the actual world - the massive swings in claimed value of all cryptocurrencies over the past year, nor to their rapid race down the drain over the past couple months.
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This person pretty obviously hasn't been paying attention to what's going on in the actual world - the massive swings in claimed value of all cryptocurrencies over the past year, nor to their rapid race down the drain over the past couple months.
I don't understand your point.
A digital dollar concurrency would necessarily have the same swings as the USD itself. It wouldn't be a stablecoin based on the backers' ideas; it'd be a stablecoin that's identical to the dollar. It's conceived as a way to bring the USD into crypto trading, nothing more.
Are you claiming that a digital US dollar would swing? -- no, it wouldn't.
Are you claiming that because other stablecoins and nonstable coins have fluctuated widely then no one would have interest in a stable U
No (Score:4, Insightful)
"Top Fed" - He is not a "Fed", the name "Federal Reserve" is designed to trick people into thinking it's a government entity"
"blah blah blah" That's his problem. He's the only clown shitting in his underoos over this.
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It is a government entity. It's just not controlled by the government directly. Much like the current Postal Service.
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Oh please. When economists and bankers talk about the 'Fed' they mean the US Federal Reserve System, which was created by the Congressionally approved, Presidential signed, and entirely legal, Federal Reserve Act of 1913.
The members of the Federal Reserve Board of Governors are nominated by the President and must be approved by the Senate. While enjoying relative independence compared to other government entities, the Fed is created and owned by the United States government.
Still stupid (Score:5, Insightful)
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There are already digital dollars out there, stable coins. They are (supposedly) backed up by real dollars. Why isn't the USA using these?
1) it would be dumb for them to use someone else's articles when they can make their own and control them
2) none of the stablecoins are actually backed by dollars 1:1, so it would be even dumber
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but reverse the bank could also change those transactions, or make some on your behalf.
I think this is the key.
It's hard to evade taxes when they know where all your money is. In fact, they don't even need to ask you or a bank to turn those dollars over. They just take them.
I'm not arguing whether or not this is a good or bad thing... I don't really know where I draw the line at tax evasion becoming morally repugnant, and whether or not it's the State's job to assfuck people who do it.
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You are going to regret that "joke" when you want to protest and they literally will not let you buy toothpaste. Don't believe it, see Canada's reaction to trucker protest.
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What the US is missing is a good, standardized way to move those digital dollars around. SWIFT is okay for banks, but not so good for people and ordinary businesses. Besides the gold wonk stuff, the big cryptocurrency promise was cheap, convenient, fast digital transfers.
Meanwhile, most of the rest of the world has one or more pretty good systems, and has had for quite a while.
Geopolitic (Score:2)
The US will just take out the superpower tool called Sanction [reuters.com](TM) against whichever rivalry countries, namely China and Russia, under the pretense of "cybersecurity". It's about maintaining monopoly of the world financial system and making sure the system an American geopolitical weapon [bbc.com]. Previously, the US has done a similar act that to the currency of US "allies" [unsw.edu.au].
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It's kind of cute when someone tries to pretend Russia is in the same league as China and the US.
Already exists (Score:1)
95% of the money I spend is electronic. I only spend nominally small amounts on the occasional fast food, etc. The rest is paid via credit card etc.
So, the digital dollar has existed since banks started keeping their ledgers electronically basically.
We're falling behind! (Score:2)
Just more government tracking (Score:2)