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The Almighty Buck United States

Banking Giants and New York Fed Start 12-week Digital Dollar Pilot (reuters.com) 57

Posted by msmash from the moving-forward dept.
Global banking giants are starting a 12-week digital dollar pilot with the Federal Reserve Bank of New York, the participants announced on Tuesday. From a report: Citigroup, HSBC, Mastercard and Wells Fargo are among the financial companies participating in the experiment alongside the New York Fed's innovation center, they said in a statement. The project, which is called the regulated liability network, will be conducted in a test environment and use simulated data, the New York Fed said. The pilot will test how banks using digital dollar tokens in a common database can help speed up payments.
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Banking Giants and New York Fed Start 12-week Digital Dollar Pilot More

Banking Giants and New York Fed Start 12-week Digital Dollar Pilot

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  • Say what? (Score:5, Insightful)

    by Errol backfiring ( 1280012 ) on Tuesday November 15, 2022 @02:02PM (#63053701) Journal
    Apart from the fact that you can get a hard copy of a Dollar, the Dollar is already digital for a long time, just like any other currency.

    • Re: (Score:1)

      by Anonymous Coward

      And if they want to know how to speed up payments, why not just ask pretty much any other country? (I'm not kidding - bank transfers in the US can take literally days).

      • Re: (Score:1)

        by Anonymous Coward

        And if they want to know how to speed up payments, why not just ask pretty much any other country?

        They don't even need to ask anyone. There is no secret, there is no technological lack, it isn't even about process - just leglistate that they have to complete the transaction within a specified time insted of holding onto the cash in transit.

      • Re: (Score:3)

        by bn-7bc ( 909819 )
        Relly? Thats odd meanwhile (alt least here in Norway) a bank transferee is same day ( unless you submit it after 13:00) if the both accounts are at the same bank the transfer is instant. Even cross birder transfers within most if Europe are next business day. And no this is not the standard European laughing at the US post, I'm genuinely curious on why things like bank transfers are apparently so slow in the US, or is it just us Europeans that have become spoiled by an efficient banking system? I admit that
    • The article is pretty light on details, but typically when one is talking about digital dollars, it is referencing anonymous secure transactions on a blockchain.

      So if I sell you my bicycle we tap our phones together and you transfer 100 digibucks from your wallet to my wallet, anonymously.

      Basically the privacy of a cryptocurrency with the strength of a greenback.

      All of the other digital money transfers leave a digital paper trail.

  • WARNING: Big step towards elimination of cash (Score:5, Interesting)

    by rcb1974 ( 654474 ) on Tuesday November 15, 2022 @02:05PM (#63053713) Homepage
    This is one of the most significant steps the banking establishment has made so far in eliminating cash. They hate cash with a passion. Cash has been a thorn in their side and prevents them from implementing negative interest rates. So long as people have the option to withdraw their savings from the bank as cash, they can't get away with that. Why keep your money in the bank if the bank will just slowly take it away from you? Once the bankers and their paid for politicians outlaw central bank issued cash, then these elites can force everyone to use their digital fiat currency. Then the only thing you can do with it is to spend it or transfer it into another bank that will also charge your for the privileged of them holding your money. Beware folks, this is HUGE news. Conspiracy theorists will say this is a step towards the mark of the beast required to buy/sell. They could be right!
    • This all seem like what they are doing now.
    • After watching Trudeau steal protester money and shut down their accounts, every bureaucrat on earth is rubbing their hands together with glee, impatiently waiting their turn.
    • Negative interest already exists, we call it inflation.

      • Re: (Score:2)

        by rcb1974 ( 654474 )
        Negative interest rates will stack with inflation to screw us all even worse than just inflation will. The only people who benefit from seigniorage (i.e. inflation) are central bankers, commercial bankers, and governments.
        • The favorite Keynesian lie is about deflation. They claim that falling prices harm people because they will put off purchases. If it were true, nobody would ever buy a PC or Smartphone which always depreciate quickly. Despite the sheer ridiculousness of the argument, people still use that as a way to explain away The Great Depression. They put on this laughable attitude that people don't want falling prices or stability for their savings.

          • Re: (Score:2)

            by rcb1974 ( 654474 )
            MIPSPro: You are correct. Governments and bankers despise deflation with a passion since it is during deflationary times that so many of their tax revenue and income streams (which based on profits, not the purchasing power of currency) all dry up, and they are forced into austerity and to reduce spending.

            • Isn't it interesting/telling, though, that governments despite deflation, despite the fact that it's *inflation* that really balloons the national debt?

              If they felt any kind of fiscal responsibility to the American people, they'd be really concerned that inflation causes their interest rates on their debt to skyrocket. That, in turn, means the tax revenue collected is less useful for any initiatives benefiting people because it's all servicing that interest on their deficit.

              The fact they don't seem to mind

              • Re: (Score:2)

                by King_TJ ( 85913 )

                *despise deflation

                (Love how Slashdot has no way to edit posts once posted.)

              • Re: (Score:2)

                by XXongo ( 3986865 )

                Isn't it interesting/telling, though, that governments despite deflation, despite the fact that it's *inflation* that really balloons the national debt?

                Deflation turns out in fact to be worse than inflation, if it actually were to happen. Inflation make people want to spend money (because money is worth less the longer you hold onto it). Deflation makes people want to not spend money.

                But that problem has been solved. Nobody "despises" deflation any more, because it only happens with hard currency, and we don't use hard currency any more. Governments rather than "despising" deflation, governments would love to see deflation, because they can solve that pr

              • Governments despise deflation for two reasons. The first is that they can't tax it, unlike their ability to tax capital gains caused by their own inflation. The second is that it makes it harder for them to get away with buying votes with borrowed money, as it becomes harder for them to pay back their borrowings.
          • That's not a good comparison because the reason that digital equipment goes down in price rapidly is that newer, more powerful versions become available every year so the phone you buy roughly costs the same from year to year i.e. you cannot save money by waiting. A better test of whether their claims are true is to ask yourself if you ever hold off a purchase waiting for a sale, particularly a regular sale like Boxing Day or Black Friday.

            This should really be studied in the modern context since it may w
    • I don't think this really has anything to do with cash. This is a centralized database for bulk currency transfers between banks. These transfers will be millions of dollars, not a buck fiddy. The current system the Fed uses is based on ancient technology, and has an overnight clearing process. This sounds like it is just updating that system to get it off 286-era PCs and allow for faster clearing.

      • Re: (Score:2)

        by rcb1974 ( 654474 )
        Yes, that may be the case...for now! How hard is it to just extend the functionality of this system to the masses? Small transactions can be stored/processed as 64-bit integers just as easily as large ones (i.e. millions of $ per transaction). It is also easy to copy/paste/execute software then edit config files and create new DB records containing account holder info, balances, transactions, IP addresses, etc.

      • "It's just this ..."

        "It's only so that we can ..."

        "It won't ever be used for anything but ..."

    • For most people, money already is digital. I'm self employed and the majority of the "money" I receive takes the form of credit card payments and checks (which I bring to my bank and they turn 'em into a number in my account). I don't bother withdrawing cash, because at everywhere I shop, paying with cash means missing out on cash back from my credit card (which I pay off every month, so it costs me nothing to have), or missing out on savings that the merchant provides when you use their preferred form of

      • Re: (Score:2)

        by rcb1974 ( 654474 )
        You're exactly the kind of person the bankers and politicians are trying to make out of everyone. This is why people are dumb enough to keep their money in the bank even when they receive no interest -- for convenience only. I predict that shortly after cash is eliminated, we will get negative interest rates. Cash, gold, silver all work outside all systems that are owned by the elites, and which benefit them. They can also be anonymous and work even when the power goes out.

        • You're overlooking the fact that member-owned credit unions are a thing. Not every "bank" is an evil monolithic corporation.

          • Re: (Score:3)

            by rcb1974 ( 654474 )
            Credit unions cause inflation (money supply expansion) every time they issue a loan because credit unions practice fractional reserve lending.

    • Uh, even without cash, I will move my money away from a bank that gives me negative interest. There are other places to put your money (ie, buy stocks or a house or something. There are options for every income level).

    • the banking establishment has made so far in eliminating cash [...] Cash has been a thorn in their side

      Not in their side — the banking establishment is fine with cash. It is the government, that hates cash — suspecting (correctly), that it is not getting some taxes as well as control over our lives.

      It is the government, that pressures banks into these measures. It is also the government, that allows police to confiscate cash [thehill.com] without even accusing you of anything, much less proving the accusation

    • Banks aren't going to do negative interest rates (Score:4, Insightful)

      by rsilvergun ( 571051 ) on Tuesday November 15, 2022 @04:55PM (#63054103)
      if you have enough money to be worth while they just give you a pittance or nothing at all. If you don't they already charge fees unless you've got direct deposit.

      There are good reasons to no do away with cash (we screw over the poor in America, and nobody has found a way to make money off the unbanked without completely screwing them over), but worrying about negative interest rates ain't one of them.

      If you're gonna freak out about conspiracy theories the Republican party is currently trying to install a dictator right out in the open, and they only just barely failed to take over in most states. They took Florida entirely, and it's a major swing state. You have perfectly good, real conspiracies to worry about. No sense making ones up.
      • We know things are bad, so they probably aren't actually worse? Are you sure you have any experience as a human?
        • No. Fuck you missed the point. My point is there's actual real things to worry about and you're worried about nonsense. It's like those q Anon nutters. Imagine if all the energy they spend tilting at windmills was spent productively. And I don't mean it work I mean it making the rest of society better instead of worse. For fuck sakes the entire Southwest of America is about to run out of water. Worry about real things.
  • The money printing process of the Fed buying US Treasury bills to fund the government will likely not change. That is already a digital process.

  • Pilot project help (Score:4, Funny)

    by fahrbot-bot ( 874524 ) on Tuesday November 15, 2022 @02:26PM (#63053763)

    Maybe they can get those guys who ran crypto exchanges to help out, they seem to have some free time now -- Oh, wait...

    • Man... I was hoping that Dogecoin was going to become the world reserve currency, just like those guys on Twitter promised it would!

  • burn it down (Score:3)

    by awwshit ( 6214476 ) on Tuesday November 15, 2022 @03:52PM (#63053969)

    Well crypto is doing a fine job of burning itself to the ground. Central banks should follow them?

  • Allow me to make a prediction (Score:3)

    by endus ( 698588 ) on Tuesday November 15, 2022 @03:53PM (#63053975)

    I do not know anything about this other than the summary. I have not read the article, nor any other article about this.

    Nonetheless, I feel qualified to offer two predictions:

    1.) This will wind up making the banks more money at the expense of everyone else. It will likely take the form of some hopelessly complicated and obtuse racketeering scheme that will destabilize the entire economy. The government will step in to regulate, because obviously they need to get a slice of that delicious racketeering pie.

    2.) This will be a privacy disaster.

    • Your predictions show that, as you said, you know nothing about the system.

      The system allows Wells Fargo to pay Citigroup whatever they owe to Citigroup without waiting overnight. In the current system, they settle up every night. The new system is testing faster settlement between large banks.

      How is this a privacy disaster? How would it cost you? How would it destabilize the economy? Answers:

      It isn't.
      It wouldn't.
      It wouldn't.

      Suppose person A writes a check to person B.
      If they are both customers of Citibank

  • With the fear of a cashless society and negative interest rates, where someone's cash has to be attached to some bank who can take from it at will, something like this, assuming it will wind up making it out of this pilot (trust me... it will), is just going to be the lightning bolt that hits the carcass of cryptocurrencies, stirring that monster back to life.

    When (not if) this stuff comes down to the consumer and cash is phased out, cryptocurrencies will have a (legit) place -- a place where someone can st

  • Comment removed based on user account deletion
  • With cash, you can withdraw hard currency from your bank, then go purchase anything you want. But with DIGITAL, every transaction you make, will be known by the bank, government etc.

    • Re: (Score:2)

      by bn-7bc ( 909819 )
      Ans so what, unless you are doing eligal stuff no one cares when where or on what you spend your money

  • This sounds like the definition of trickle up economics. You are forced to keep your money in the system and the system is intrinsically designed to continuously transfer your wealth to help people who can already help themselves.

  • With changing from paper fiat money to electronic fiat money, they only thing you gain is government control over how easy it is to track your purchases. That's it.

    That said, none of it matters if we let the petrodollar crash. Various forces are very hard at work in trying to crash the petrodollar, so much so that we just elected a president that literally ran on a platform that targeted/attacked the fossil fuel industry. The general public has little to no knowledge of what actually makes our fiat curr

  • Speed up payments?? (Score:3)

    by khchung ( 462899 ) on Tuesday November 15, 2022 @08:22PM (#63054521) Journal

    The pilot will test how banks using digital dollar tokens in a common database can help speed up payments.

    Anybody with half a brain cell already knew it cannot. Which fool thought that updating a blockchain could be faster than a COBOL program running on a backend big iron?

    If anyone said this is about transaction performance, they are lying.

  • Europe is moving to instant money transfers without all this. It just requires a good banking communication infrastructure and kicking slow banks in the behind.

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