The Federal Reserve took a key step in weighing the creation of its own digital currency, a move it said could help ensure the U.S. dollar’s dominance as the central bank grapples with fast-growing private cryptocurrencies and coins issued by other nations.The central bank made no firm conclusions on whether issuing such a currency was prudent and in any case said it doesn’t intend to proceed without support from the White House and Congress -- so it’s not likely a U.S. digital dollar will be issued anytime soon. But the 35-page discussion paper issued Thursday on a government-backed coin, known as a central bank digital currency or CBDC, marks the Fed’s most significant action yet as it seeks to dive deeper into digital assets.“The introduction of a CBDC would represent a highly significant innovation in American money,” the Fed said in the paper.
More at Bloomberg.
indeed..
ReplyDeletehttps://edwardsnowden.substack.com/p/cbdcs
Thank you. I've appended the link to the body of the post.
DeleteAs much as I respect the service Ed Snowden did to our country as a whistleblower, his experience since has clearly scarred him irreparably. This blog was delusional, and also incoherent.
DeleteHe dumps on digital dollars as useless when the power grid fails, and then promotes crypto over fiat currency. Huh? Did I miss where they issue solid gold Bitcoin?
He claims that banks are now useless due to crypto. "credit and investment were unavailable, and perhaps even unimaginable, without it. Today you can enjoy any of these in three clicks." I'd like to see where crypto enables lending, besides using it as collateral for a loan, which just saves you from selling the crypto. (This is called leverage, and is precisely the type of risk that caused the big banks to need a bailout, which he rightly attacks them for.) But can you get a home or auto loan, or an unsecured credit line, via ETH? Nope. This is what we pay banks for: to find borrowers of reasonable reliability to pay for the use of our excess savings (or cheaper sources of funds). They have to have levers to allow them to collect, such as liens on property, a government function.
The sort of changes he fears in our financial system are so absurd, and these systems so baked into the fabric of our economy, that it's impossible to imagine they could happen here, or in any Western democracy. It's more plausible, but still hard to imagine, even in the authoritarian nightmares that are modern Russia and China. The only place I can imagine this being truly plausible is North Korea. If you think we're on that path, you're probably already living in a bunker anyway. This is tinfoil hat territory, folks.
Digital currencies are all snake oil. Presented as a way to pay stuff while cutting out banks, they are now advertised as investments mostly because the value keep fluctuating. You can't be both.
ReplyDeleteI'm not sure why we need this. My house is the most expensive physical asset I own, but I have many more times that value in assets that I cannot physically touch, in bank and brokerage accounts. Is this intangible wealth in some way deficient? Why do we need another currency to manage or account for these assets? A password to define my ownership seems a step backwards.
ReplyDeletePlaying digital currency musical chairs to increase your perceived wealth leads to a capital gains tax nightmare on your imaginary hoard you can't buy groceries with..
ReplyDeletePhooey, don't tell the government about it. Nope, they already know... your farmville crop too.
I dont see the problem. It means three things . 1) visa and master card go out of businesses. 2) banks will have to pay higher deposit interest rates or people will just keep their money on their own computers. 3) if you are not careful a hacker could steal all you own in the blink of an eye.
ReplyDeleteLove Edward Snowden, but his history of money is just dead wrong. he should stick to things he knows about like computers.
ReplyDelete