The U.S. is considering whether to adopt a digital version of its currency

[EdgeOfSanity]

You guys really want governments to have total control over infinitely programmable money? Think about that one for a minute. Nothing good will come of this and it should actively be fought against.

[Helpful Tech Witch]

 

4 hours ago, Velcade said:

I think you're reading too far into it.  The gov isn't looking to dismantle current banking system. 

if i remember correctly, and hamilton didnt bs it, President Thomas Jefferson tried and failed to do that, and that was just years after the current system was put into place

[poochyena]

18 minutes ago, EdgeOfSanity said:

You guys really want governments to have total control over infinitely programmable money? Think about that one for a minute. Nothing good will come of this and it should actively be fought against.

The government already has infinite control over their currency. The good that will come from it is elimination of fees from private companies.

[Beerzerker]

4 hours ago, Velcade said:

I think you're reading too far into it.  The gov isn't looking to dismantle current banking system. 

Perhaps, but what is an idea today could well be reality tomorrow and all I'm doing is stating a possible consequence of it - Which woudn't be good. 
One thing is for certain, they would be in direct control of your account(s), able to directly monitor your activities.

[Imbadatnames]

Most transfers are digital now I don’t really see the difference 

[Kisai]

7 hours ago, J-from-Nucleon said:

So, if I'm understanding this right, basically what this does is just shift responsibility of exisiting infrastructure to be directly under the US government?

So, apart from fees and some other formalities virtually nothing would change? Well, that would certainly make it easier for adoption.

 

More or less. We all have "digital currency" right now, be it paypal or a bank account, but the large problem is that money is still exchanged between banks via the ACH. https://en.wikipedia.org/wiki/Automated_clearing_house

 

Part of the reason why there are ridiculous limits on how much you can send or receive is partly because the ACH was designed for clearing CHECKS, it's not a debit card network. In the grand scheme of things it does a bunch of hand-shakes to ensure that the amount debited from one account is credited to another. But this only works for systems that are both online and run by big banks. Small banks and credit unions usually have to do everything through a much larger bank to settle payments with banks out of state and out of country. It's actually amazing that bank accounts aren't regularly cleaned out (robbed) by people with unauthorized access to the ACH. But unlike crypto, there is also a means to reverse ACH payments.

 

Where things get awkward or incredibly asinine to do, is when you deal with payments that are subject to sales taxes. What is to prevent everyone from just doing business as an Alaska or Texas (no sales tax) business, but does business across state lines? How is it that NY and CA haven't been totally undermined by businesses run out of Texas? 

 

That's the risk of switching to digital money in any shape or form. Just like how adult entertainment workers, and cannabis dealers have to side-step the established system by using crypto or running a side business that only handles money, a digital money system also has to side-step the existing system. How do you reverse a bad payment? With traditional cash, you would literately have to beg the person to give the cash back.

 

Though it's also amazing we haven't gone through two or three digital wallet systems already, given how frequently crypto rugpulls happen, and crypto exchanges get looted. In a way, we're actually seeing what not to do.

 

[poochyena]

2 minutes ago, Kisai said:

Where things get awkward or incredibly asinine to do, is when you deal with payments that are subject to sales taxes. What is to prevent everyone from just doing business as an Alaska or Texas (no sales tax) business, but does business across state lines? How is it that NY and CA haven't been totally undermined by businesses run out of Texas? 

Sales tax is based on where the buyer is located, not where the business is. Either way, we already have stuff like that, though, with Delaware. https://en.wikipedia.org/wiki/Delaware_General_Corporation_Law

"Adopted in 1899, the statute has since made Delaware the most important jurisdiction in United States corporate law. Over half of publicly traded corporations listed in the New York Stock Exchange (including its owner, Intercontinental Exchange) and 66% of the Fortune 500 are incorporated (and therefore domiciled) in the state."

Also the fact there is waaaaaaay more to consider when running a business than taxes.

[Kisai]

32 minutes ago, poochyena said:

Sales tax is based on where the buyer is located, not where the business is. Either way, we already have stuff like that, though, with Delaware. https://en.wikipedia.org/wiki/Delaware_General_Corporation_Law

"Adopted in 1899, the statute has since made Delaware the most important jurisdiction in United States corporate law. Over half of publicly traded corporations listed in the New York Stock Exchange (including its owner, Intercontinental Exchange) and 66% of the Fortune 500 are incorporated (and therefore domiciled) in the state."

Also the fact there is waaaaaaay more to consider when running a business than taxes.

But you missed the point entirely. What is to just make sure taxes are paid with digital dollars? There's nothing stopping two people in California from saying they're in Texas when the transaction happened.

 

[poochyena]

3 minutes ago, Kisai said:

But you missed the point entirely. What is to just make sure taxes are paid with digital dollars? There's nothing stopping two people in California from saying they're in Texas when the transaction happened.

uhh, if you want the item you buy to be shipped to you there is..

Sure, you can do that with digital goods I guess, but I think the vast majority of purchases are still physical.

[Unclescar]

10 hours ago, poochyena said:

What is the downside to this exactly? It will be harder for people to cheat on their taxes. Oh no.

You are welcome to change your clothes by the window with your curtains open for all your neighbors to see, but you do not get to come to my house and remove my curtains.

Not having anything to hide does not mean that my business should be publicly available or that a government with a history of bad behavior has any right to watch.

Unrelated, if 'people cheating on their taxes' is of concern for you, look no further than the government officials ("Public Servants"... LOL!) that write the tax laws in the first place. THAT is supposed to be publicly available, with the sole purpose of being scrutinized by the public they are allegedly serving.

[leadeater]

3 hours ago, Kisai said:

It's actually amazing that bank accounts aren't regularly cleaned out (robbed) by people with unauthorized access to the ACH. But unlike crypto, there is also a means to reverse ACH payments.

Well that's because these bank systems aren't run by 1st year CS college students making the next meme coin etc. Also the people involved are actual employees on a payroll with an employment contract with actual real accountability and liability for their actions.

[poochyena]

10 minutes ago, Unclescar said:

You are welcome to change your clothes by the window with your curtains open for all your neighbors to see, but you do not get to come to my house and remove my curtains.

Not having anything to hide does not mean that my business should be publicly available or that a government with a history of bad behavior has any right to watch.

uhhh, how does any of that relate to the topic, exactly?

11 minutes ago, Unclescar said:

Unrelated, if 'people cheating on their taxes' is of concern for you, look no further than the government officials ("Public Servants"... LOL!) that write the tax laws in the first place. THAT is supposed to be publicly available, with the sole purpose of being scrutinized by the public they are allegedly serving.

also, how does that relate to the fact of people evading taxes, exactly? No tax law prevents tax evasion.

[lostcattears]

.... Then it better be 100% public info which would also be stupid. The money can't be decided to be spent under warps even the US government have to let the people 100% decide what it is being spent on instead of just passing it through in 2 seconds cuz BS reasoning. The people gets to decide everything what to do with money politicians should get out asap. Can't be transferred as bribes even the US government does this BS.

 

Besides with how slow the US government is with tech... and the infinite fraud that could happen or even a giant solar flare can destroy the entire system. The USA would go to ruins. Hell major tech companies loses data left and right these days.

 

Definitely the US won't be able to do a good job with this if we go all digital with the gov't controlling all digital.

[Taf the Ghost]

Upside: functionally allows a fairly easy "Back Audit" of the Fed's activities.

Downside: Fed will realize this and kill off any bills that go that direction.

Upside: much easier to target, isolate and remove anyone that falls afoul of the Regime.

Donwside: Strong basis for the systematic elimination of the current Regime.

 

The US is already rolling head-long into a massive civil conflict in a few decades, this would basically lock in a future civil war. Monetary Systems really matter. They drive nearly all global conflicts since the Age of Exploration and the Naval exploration. (Monetary Systems allow for expanded Navies, it all follows from that.) Distance (or Decentralized) Arbitrage is important in a lot of things because is prevent centralization of information. Yes, it opens up scams and other issues, but pure centralization always runs into the same "Who Watches the Watchman?" issue. 

 

There's not a lot more to say about the topic that doesn't get way out of bounds of forum rules. It's not conflicts in the ancient past that were caused by conflicts about monetary systems. It's currently active military conflicts. But, at the same time, it might be hilarious to track the Graft among the political class. That's actually the angle I'd push for the "adoption" in the Poison Pill approach. 

[leadeater]

Just a reminder to dial back on the politicized type comments

[Sauron]

15 hours ago, poochyena said:

Why was this not done 20+ years ago? I never understood this. Why does the government manage paper money, but not digital money too?

Private interest, mostly.

[05032-Mendicant-Bias]

10 hours ago, Arika S said:

A digital USD? its called USD......Fiat currency is not exactly backed like it used to and can already be used for digital purchases...so what's the difference?

 

I speculate a digital dollar would serve the same role of a digital yuan
https://www.db.com/news/detail/20210714-digital-yuan-what-is-it-and-how-does-it-work

 

The market wants cheaper and faster money. Rather than letting private companies run an alternate unsafe froud ripe alternative money system, the government can step in and make its own money faster. The digital yuan only requires a mobile phone number to be used and is not considered a bank account, by itself there are no intrests on deposits. Only banks are allowed to convert from digital yuan to bank account yuan.

This way, there is a fast circuit to exchange digital money, and a legitimate government backed system to convert digital money to and from real money.

It's a vastly more performant, efficient and safe alternative to using e.g. BTC with Coinbase. You lose decentralization, but as long as you aren't an anarchist, you are not going to care.

[mr moose]

Interesting proposal,  a way to bypass the banking sector for basic currency stuff.   However,   If your banking sector is at least semi properly regulated you shouldn't need an alternative.

[Brooksie359]

15 hours ago, GhostRoadieBL said:

this is a very complex issue, how do you fully digitize something which requires a physical value backing to have a "value"?

if you link the digital currency to physical resources (gold being the standard) the value will change based on the physical resource value on the world market which is what we have now, just cutting out the processing fee (which is what blockchain currencies did, not fully but better than anyone else)

 

if you are just replacing paper currency (being a physical representation of,effectively, what is a loan the government or bank gives you with gold reserves holding the original physical value) then it may be fine. It will absolutely save the government money from printing physical currency since running a centralized server would be cheaper for gaining and losing the same volume/value of currency (1's&0's instead of physical $)

 

the replacement of credit card companies becomes more of a challenge since the loan would come from and fees set by the Central Bank compared to private sector banks which have competition for better interest and lower fees when the market moves.

 

I believe the more ideal policy is 2 fold, centralize digital currency while removing the link between investment and trading private sector banks.

Investments become translated to digital currency reducing the paper/resource holdings forcing private sector banks to compete and be regulated by the central bank's oversight (digital currency means digital tracking of transactions through the central bank)

 

Trading becomes a "backed by physical value" transaction where private sector trading can happen but is backed by gold or other proof of value currency. This reduces the run away trading we've seen in the recent past where trading houses didn't hold the equity to cover the trades being made and values being inflated/deflated rapidly. This also becomes easily regulated since it's a proof of value situation not allowing trading houses to have loans from the same banks which people have their accounts in. The layers to that start getting too complex for a forum conversation though.

 

The USD hasn't been backed by gold since long ago. Also we already run off of digital versions of the USD for the most part already. The value of the USD is now tied to the economy in a certain sense and to basically all forms of debt in another sense (as legal tender it has to be accepted as payment of debt). A big one would be housing as most people who own a house have a mortgage which can be paid for by a certain amount of USD which in turns ties to the value of the house to the value of the USD. Anyways this changes basically nothing other than who is dealing with the digital currency. 

[Brooksie359]

9 hours ago, EdgeOfSanity said:

You guys really want governments to have total control over infinitely programmable money? Think about that one for a minute. Nothing good will come of this and it should actively be fought against.

What are you talking about? Do you seriously think that this isn't already the case? 

[Brooksie359]

56 minutes ago, Taf the Ghost said:

Upside: functionally allows a fairly easy "Back Audit" of the Fed's activities.

Downside: Fed will realize this and kill off any bills that go that direction.

Upside: much easier to target, isolate and remove anyone that falls afoul of the Regime.

Donwside: Strong basis for the systematic elimination of the current Regime.

 

The US is already rolling head-long into a massive civil conflict in a few decades, this would basically lock in a future civil war. Monetary Systems really matter. They drive nearly all global conflicts since the Age of Exploration and the Naval exploration. (Monetary Systems allow for expanded Navies, it all follows from that.) Distance (or Decentralized) Arbitrage is important in a lot of things because is prevent centralization of information. Yes, it opens up scams and other issues, but pure centralization always runs into the same "Who Watches the Watchman?" issue. 

 

There's not a lot more to say about the topic that doesn't get way out of bounds of forum rules. It's not conflicts in the ancient past that were caused by conflicts about monetary systems. It's currently active military conflicts. But, at the same time, it might be hilarious to track the Graft among the political class. That's actually the angle I'd push for the "adoption" in the Poison Pill approach. 

You would be kidding yourself if you think that this would actually effect credit card companies all that much. Good luck trying to get a loan without a credit card to build your credit. Sure this would be a good replacement for debt cards but honestly I still feel like debt cards might be more convenient than these. Anyways credit cards aren't going away with this for sure. 

[05032-Mendicant-Bias]

9 hours ago, EdgeOfSanity said:

You guys really want governments to have total control over infinitely programmable money? Think about that one for a minute. Nothing good will come of this and it should actively be fought against.

Yes. I want elected officials to handle monetary policy.

 

I would choose corrupt elected official over anonymous internet scammer any day of the week.

[suicidalfranco]

Government gets full control of the money flow

Corps got their own version of a social point system

Just need to start see them work tightly and closely together and I can envision a rossy future for the US

[leadeater]

18 minutes ago, Brooksie359 said:

Good luck trying to get a loan without a credit card to build your credit.

Suspect this is much more important in the US where credit score actually means something at all. Here it's irrelevant so nobody knows or uses it, it exists in background by financial institutions however there are many things they are legally not allowed to discriminate on based on credit score so it's purpose is extremely small here. 

 

All bank loans for home mortgages have to be means tested to ensure it's affordability along with maximum allowed loan to value ratio and maximum loan to income ratio. Basically no matter how bad your credit score is if you pass the means test then the bank must offer you the loan. To further protect the banks and also consumers from predatory or unfair lending terms first home buyers are entitled to a government secured Welcome Home Loan facilitated through the banks so there is no risk to the bank and allows a minimum 10% deposit instead of 20%, or 40% if it's an investment property purchase. As the name suggest you are only entitled to this loan once and you must reside in this property.

 

Not that what is being proposed here will change any of this situation in the US though, hearing about the whole credit score thing to me is weird because of how not a thing it is here 

 

I owned a house before a Credit Card, in fact I still don't have a bank issued Credit Card at all and never have. I technically do have a Credit Card though, it's a store card that is a Visa and in the background it's just a finance company, any case I need these to purchase on the interest free terms periods etc.

[Fasterthannothing]

What's wrong with some of you guys? Getting rid of physical cash is the dumbest thing ever. Heck we never should have gotten off the gold standard. Do you just love handing the government all your information? Cash is one of the last anonymous things in an ever digital privacy stealing world.