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The Almighty Buck

The IMF Launches 'Central Bank Digital Currency' Handbook, Says CBDCs Could Someday Replace Cash (cnbc.com) 77

An anonymous reader shared this report from CNBC: Central bank digital currencies have the potential to replace cash, but adoption could take time, said Kristalina Georgieva, managing director of the International Monetary Fund on Wednesday.

"CBDCs can replace cash which is costly to distribute in island economies," she said Wednesday at the Singapore FinTech Festival. "They can offer resilience in more advanced economies. And they can improve financial inclusion where few hold bank accounts." [...] "CBDCs would offer a safe and low-cost alternative [to cash]. They would also offer a bridge to go between private monies and a yardstick to measure their value, just like cash today which we can withdraw from our banks," the IMF chief said.

The IMF has said that more than 100 countries are exploring CBDCs — or approximately 60% of countries in the world. "The level of global interest in CBDCs is unprecedented. Several central banks have already launched pilots or even issued a CBDC," the IMF said in a September report. According to a 2022 survey conducted by the Bank for International Settlements, of the 86 central banks surveyed, 93% said they were exploring CBDCs, while 58% said they were likely to or may possibly issue a retail CBDC in either the short or medium term. But as of June, only 11 countries have adopted CBDCs, with an additional 53 in advanced planning stages and 46 researching the topic, according to data from the Atlantic Council...

On Wednesday, the fund launched a CBDC handbook as a reference guide for policymakers around the world...

Georgieva also said that artificial intelligence "could amplify some of the benefits of CBDCs" by providing accurate credit scoring and personalized support.

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The IMF Launches 'Central Bank Digital Currency' Handbook, Says CBDCs Could Someday Replace Cash

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  • by Anonymous Coward
    I would strongly suggest you purchase large amounts of precious metals... when all currency is government-controlled digital bits and bytes, all it takes is one large natural disaster or terrorist EMP to make you penniless. Not to mention the fact that the government can track and confiscate all of your assets. Truly 1984-esque.
    • at some point you're going to have to exchange it for goods and services and with the massive amount of market consolidation (Bill Gates is the largest farmer in America, look it up) you're gonna have to do business with one of the 7 companies that owns everything.
      • by NFN_NLN ( 633283 )

        California's "special residents" seems the be handling megacorps just fine:

        California targets smash-and-grabs with $267 million program aimed at ‘brazen’ store thefts
        https://apnews.com/article/cal... [apnews.com]

        Are Southern California mob robberies part of a retail crime wave? It’s complicated
        https://www.latimes.com/opinio... [latimes.com]

        --
        www.fark.com/realworld

      • What would you do with it?

        They'd rub it between their fingers while saying "my preciousss", obviously.

      • by JaredOfEuropa ( 526365 ) on Monday November 20, 2023 @07:46AM (#64017961) Journal
        It's a way to protect your wealth from being seized at the press of a button (see what happened to people who donated to the Canadian trucker rally). Sure, at some point you're going to have to convert some of it back to CBDC or add it to your current account balance, so you get some spending money. The rest of your wealth will still be gold, and safe. That is to say: it might be on a trading account that can still be seized, or it's bullion stored at home where it may be stolen. Another disadvantage of gold is that it's dead wealth: it earns no interest and is a poor long term investment.

        But CBDCs are worse... besides privacy issues or the ability to be seized easily, this electronic currency also has the nasty ability to be earmarked for certain expenses only, a little bit like food stamps. Your unemployment tokens can be used to buy food, but they wont spend at the liquor store. Sounds great... until governments will allow (or force) companies to do the same thing: your wages will come pre-allocated to a healthy food budget, a smaller meat budget, a booze and smokes budget that will get squeezed a little tighter every year, and so on. Far fetched? This sort of stuff is already enthusiastically being discussed in certain circles, some of which quite influential ones.
        • Another disadvantage of gold is that it's dead wealth: it earns no interest and is a poor long term investment.

          It earns no interest but inflation serves the purpose of interest for a precious metal.

          I just go back to the example of the 1964 silver quarter.

          In 1964, the minimum wage was $1.25 per hour. If you had 5 1964 silver quarters today, they'd be worth over $21.

          That's just under 5% annual return over the past 59 years.

          By no means is that exemplary but it's also not just a dead asset either.

          LK

    • I hear this guy Ea-Nasir has really good deals on excellent copper.
    • by sosume ( 680416 )

      Agree. Never, ever accept a CBDC. No privacy and too much chance on government abuse.

  • by Todd Knarr ( 15451 ) on Sunday November 19, 2023 @09:01PM (#64017207) Homepage

    The first thing that you'd have to do to make them work properly is lock the exchange rate between them and the corresponding regular currency. That would stop the abuses of speculation. Second thing is to have a network set up to verify transactions at a reasonable rate, especially for transactions less than about 5 dollars or equivalent. People won't use it if the service charge is more than the transaction amount.

    If you run it like the current crop of cryptocurrencies, it will fail. The only people who'll use it will be speculators and scammers.

    • That can be things like.

      Monthly bills paid with a credit card

      Other types of debt including auto loans paid with a credit card

      Wire transfers

      Traveler’s checks

      Money orders

      Foreign currency exchanges

      Lottery tickets

      Gaming chips and other wagers

    • by arbiter1 ( 1204146 ) on Sunday November 19, 2023 @09:19PM (#64017241)
      It can't ever work as gov at any time can cut you off from your money, aka look at trucker convoy protest that was 100% peaceful yet had their accounts locked so they couldn't even buy food.
      • by DMJC ( 682799 )
        The Trucker convoy was a good example of banks enforcing politics. Less known is debanking where businesses that aren't approved by the state (or the morals of the banks) get kicked out of the financial system. Happens to sex workers a lot. Also happens in Australia to Tattoo Artists and Vape store owners. Completely legitimate businesses protected by law but not approved of by banks.
        • by Anonymous Coward
          ahhh Vape store owners ARE NOT completely legitimate businesses any more than most tattoo parlours in Australia. Most Vape stores sell illegally and Tattoo artists have been cracked down on as fronts for money laundering for bikie gangs.
        • LOL you just used two of the most corrupt sectors in the business world to claim legitimate businesses are unfairly targetted. You can operate either a tattoo business or Vape store with absolutely no issues in Australia with banking or government. However, those two industries are front and centre for money laundering (tattoos) and illegal imports and selling toxic devices and nicotine to kids(Vape stores), funnily enough when you operate outside the law you lose access to many of societies tools that allo
          • There's a credit union near me (Abound FCU) that has denied all of it's account holders the ability to buy games on GOG.com because it's payment processor is in Europe. With no option for them to override the decision nor to request an exemption. By your definition, does that mean that GOG.com is "front and centre for" "operate outside the law"?

            TL;DR: What's considered a legal and "just" business is a matter of opinion, and the question being asked here is: "Should only the opinions of bankers be consider
      • by AmiMoJo ( 196126 )

        Perhaps not the best example, given that being allowed to drive a truck is dependent on having a government issued licence and a government registered vehicle, along with mandatory government regulated insurance in most countries.

        Europe deals with that kind of thing by having strong human rights protections, which make access to a basic bank account and services something that governments not only can't take away, they actually have to ensure is available too.

      • "100% peaceful" "private citizen's had their accounts frozen" you are really a fucking moron and dont know a goddamn thing about what happened in Canada I greatly look forward to the ring leaders receiving their convictions and prison sentences.
    • The first thing that you'd have to do to make them work properly is lock the exchange rate between them and the corresponding regular currency. That would stop the abuses of speculation. Second thing is to have a network set up to verify transactions at a reasonable rate, especially for transactions less than about 5 dollars or equivalent. People won't use it if the service charge is more than the transaction amount.

      If you run it like the current crop of cryptocurrencies, it will fail. The only people who'll use it will be speculators and scammers.

      And once the 'corresponding regular currency' disappears, what exactly stops those in control of the value of the only currency left at that point, to shift like the winds in their favor?

      We had a standard before. The Gold Standard. Let's not be ignorant here. The value of a digital currency can and will change like daily stock value at the abuses of Greed. You already know this. Predicting what Greed will do, hardly requires a crystal ball.

    • The first thing that you'd have to do to make them work properly is lock the exchange rate between them and the corresponding regular currency.

      This is entirely the point.
      They aren't making a separate currency for the country. It's just a digital version of the regular currency and will be worth the same.

      If you run it like the current crop of cryptocurrencies, it will fail.

      Nobody is proposing that.

      • If you run it like the current crop of cryptocurrencies, it will fail.

        Nobody is proposing that.

        Perhaps, but you also overlooked the other highly corrupt suggestion from the parent. Charging a transaction fee/service charge? Yeah, how about fuck that nonsense. We sure as hell don't need another layer of 'fees' on top of Federal income tax, State income tax, Social Security/Medicare tax, tax on the purchasing of goods, tax on collecting money in exchange for goods, and all the other shit that penalizes the literal use of money. Transaction/card processing fees are the main reason people running bus

        • The other point is to actually lower the fees you're complaining about. It would be cheaper and easier to use than anything currently available.

          Not that I'm saying there aren't other kinds of problems, as there definitely are. But for you both to focus on the non problems... Seems like you don't really understand what CBDCs even are.

          • The other point is to actually lower the fees you're complaining about. It would be cheaper and easier to use than anything currently available.

            Believing those fees will stay low even if they start out at a "competitive" rate (vs. blatant collusion), is an exercise in futility when Government or Central Banking is involved. You act like having their hand in it will result in some kind of priority for The People they're creating it for. We don't even elect Representatives anymore. We elect politicians who bend the knee to their Donor Class. A Donor Class that currently gets obscenely rich with micro-transaction fees. Like it's fucking hard to p

        • For the system to work you have to have nodes that validate transactions. That requires hardware infrastructure, and there has to be some way for the operators to pay for that infrastructure. You definitely don't want only the central bank to be the one to verify transactions, that just creates the same bottleneck we see with current financial systems and allows the central bank to control what businesses can exist. But you can let the central bank operate validators and use their service charge to set an e

  • by elcor ( 4519045 ) on Sunday November 19, 2023 @09:05PM (#64017209)
    Cash is pretty good already at allowing movement. We've seen that crypto offers advance tracking and even allows reversal in a decentralized context when all major players agree to twart fraudulent activity so you can only imagine how extensive programmatic control of our money can become if this is generalized. It seems that tge IMF is at it again, trying to extend their control by debt of poor countries to all countries. And extending
    • by AmiMoJo ( 196126 )

      If you hadn't noticed banking is already like that. Any transaction can be reversed if the banks involved agree. It's all tracked, and most countries ban anonymous accounts, even Switzerland now.

      The concern here is that crypto currency pulls all the transaction records together on a single blockchain, which makes it easier to trace money. It can be done today, it just requires more work to follow it through multiple bank's systems. I'd say the main risk is the usual one with technology that makes things eas

  • This sounds like company scrip to me, or at best a stablecoin (which is just scrip with a blockchain).

    • by phyrz ( 669413 )

      fiat is national scrip, whats your point?

      • There is a difference between money that is backed by a government (i.e. with a lot of guns like the US, China, the EU, or even Russia), versus digital chits that have nothing behind them. There have been many, discussions on this on Slashdot when someone talking about crypto points to the USD as "fiat" currency, but values BTC and altcoins in USD.

        The USD has its inflationary issues, but with the inflation rate slowing, it is fairly stable.

        Scrip on the other hand is effectively worthless, as there isn't an

        • by pjt33 ( 739471 )

          I think what you missed is that the "CB" in "CBDC" stands for "central bank". These would be just as backed by their governments as their existing physical currencies.

  • Internet Outage (Score:4, Informative)

    by bill_mcgonigle ( 4333 ) * on Sunday November 19, 2023 @09:13PM (#64017223) Homepage Journal

    Australia just had a 12 hour Internet outage this week.

    People who had cash on hand were fine.

    People who went to their bank to get cash could not.

    And we don't even have a grid that can handle a Carrington Event. 18 months.

    • by gweihir ( 88907 )

      Indeed. And that outage could well have gotten quite a bit longer. The tech-level of the human race is _not_ sufficient to go to all digital money. Maybe in a few decades.

  • Personally I think they will go nicely with my Ugly Monkey NFTs (tm)(r) which I can't enjoy at the moment because I was temporarily blinded by some stupid UV laser show.

  • by doug141 ( 863552 ) on Sunday November 19, 2023 @09:16PM (#64017229)

    There's 5 trillion in physical currency (M0), but 20 trillion in deposits (M1, M2)? Most transactions are computer/digital?
    https://take-profit.org/en/sta... [take-profit.org]
    https://en.wikipedia.org/wiki/... [wikipedia.org]

    • It still relies on SWIFT.

    • Yeah this is what am confused about as well. Most countries have some form of currency transfer / payment system available online.

      I know I can use online payment / mobile payment using a phone and the money is transfered from my account to the other side / shop / service provider within seconds.

      So whats the difference between this and one of the already available system that allows you to make payment digitally?

  • Seriously ... just feels ripe for abuse by the government, criminals, fraud, and generally much riskier and less private than cash.

    • Well yeah. It's good for them, not for you. That's why they want to do it.
    • I kind of like the idea of private banks with private 'crypto' - not actual cryptocurrency (which doesn't work in the real world), but just anonymous electronic 'cash' to which you hold the private keys, keys that can be refreshed at any time. Carry it on a flash drive with a little LCD and a couple of buttons to let you select amounts to transfer, show your balance, etc. No mining, no Byzantine Generals problem. Everything's just in a standard database hosted by the bank.

      Back it up to a secondary flash

      • Actual crytocurrency is working in the real world every day, in very large volumes, with minimal lag thanks to Lightning.

        It's these central bank fixed value coins that are the real scam. Just another means for the government to control your life.
        • Nope. Actual cryptocurrency doesn't work on reasonable scales at reasonable speeds, and can only get worse as time goes on. It is completely inadequate for typical financial transactions but wonderful for money laundering and milking rubes.

          You're just a cultist. I hope you at least got some nice robes out of it.

  • I canâ(TM)t think of any downsides. It will give governments greater control and therefore more ability to do good for their citizens!
  • Apathy (Score:4, Insightful)

    by markdavis ( 642305 ) on Sunday November 19, 2023 @10:54PM (#64017393)

    >"Central bank digital currencies have the potential to replace cash, but adoption could take time"

    And an apathetic populous that is willing to roll over. Many of us don't want EVERY possible transaction to REQUIRE technology and government control and spying.

    The goal to have more options is good. The goal to take away hard currency is bad.

  • by DMJC ( 682799 ) on Sunday November 19, 2023 @11:32PM (#64017437)
    Once all currency is digital, all transactions are tracked. It's the death of Freedom. Doesn't matter if you're left or right leaning. Supporting a gay rights organisation? Your accounts can be locked and your money confiscated. Supporting anti-immigration political parties with donations? Your account can be locked and your money confiscated. Want to buy some drugs, or pay for your mistress. Social credit score -9000.
    • by upuv ( 1201447 )

      A fully digital currency will result in a shadow economy running parallel. The shadow economy will likely be far more efficient and decentralised with anonymous transactions. Once one country has a shadow economy currency system it will quickly spread around the world.

      It won't be bitcoin. As bitcoin is a value store not a currency. It take far to long to process a transaction. Also it is now essentially no long anonymous. To many data correlations are putting names to wallet's.

    • And it is going that way, and people are willing to let go of their freedom for a bit of convenience.

      Combine CBDCs with a full on Chinese social credit system, or whatever west will have if/when the rulling class manage to fool people into accepting such a system, and that's it. Game over.

      There's another thing about CBDCs, and that's programmable [gi-de.com] CBDCs. Here's a quote from that site:

      "Programmable money is money with in-built rules and that comes with constraints for the user. With these rules, money could a

    • by AmiMoJo ( 196126 )

      That's already the case for some people, it's just new to you. For example, the police in the US can steal your cash and keep it, largely with impunity. Particularly for foreigners, it's advisable not to carry large amounts of cash at any time.

      The solution is not to rely on cash, a physical token that can easily be confiscated. It is to enshrine your rights in law and enforce those rights with harsh penalties for abusers.

    • In China, ubiquitous surveillance did not cause the government to become a nanny state. The tyrant government first gained power, and then it forced its citizens to become trackable (phone apps, digital identities, reputation scores). No preexisting privacy protections would have stopped this from happening. Tyrant takes over and privacy goes down the shitter.

      One thing to worry about is the data history. If we are tracked today by the "good" folks, that same data, if not deleted, can later be analyzed by
  • The IMF Launches 'Central Bank Digital Currency' Handbook

    Should the Handbook be caught or killed, the Secretary will disavow any knowledge of its actions.

    • by garbs ( 121069 )

      Should the Handbook be caught or killed, the Secretary will disavow any knowledge of its actions.

      Thanks for the laugh!

  • Is starting to sound a bit more realistic and that doesn't make me pleased.
    I don't want the nutcase bitcoin people right and I sure as shit don't want CBDCs either.

    This is a pretty dire sign and they've been slowly mentioning this the past 12 to 24 months.

    How long until our money is entirely in control of others?

  • During high interest rate your wallet app has to juggle between CBDC petty cash and the "real" bank offering interest, during low interest rate it has to max out CBDC. It's an unstable mess.

    As long as classical deposit banking exists, CBDC makes very little sense. Just create a fast and low cost interbank transfer system instead (like FedNow). If banks aren't willing to offer online banking to poor people with minimal deposits, give a little subsidy.

  • Once all currency is digital, it can be hacked ! Everyone should know that by now. NOTHING digital and connected to the internet is safe !
  • For as long as politicians, spies, militaries, etc., need to discreetly & untraceably distribute & receive funds, i.e. anything from envelopes to palette loads of cash, I can't see physical bank notes disappearing. When do you suppose that need will disappear? I guess there's an argument for blockchain in some instances?
    • For as long as politicians, spies, militaries, etc., need to discreetly & untraceably distribute & receive funds, i.e. anything from envelopes to palette loads of cash, I can't see physical bank notes disappearing. When do you suppose that need will disappear? I guess there's an argument for blockchain in some instances?

      It's digital cash. Hardly a stretch to assume there won't be "dark" money there too. Fire up another flavor of it, for "government" use. Created from the new digital presses that replaced the physical ones.

  • As the last few years have demonstrated, you can't have a stable economy based on a digital currency unless there is at least some regulation, control, and traceability.

    So, what does a cryptocurrency bring to the table that the existing systems don't provide? 'Cause it seems an awful lot like the answer is "nothing" -- that the only reason the tech bros are pushing so hard for digital currencies is that they want to supplant the old school financiers with themselves.

    How does that benefit anyone but th

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