Edit: grammar
What do you mean by "absorbed from the top private banks"?
If they solve the anonymity problem (such that they can replace paper currency, which can also be entirely anonymous), then I'd expect that you could buy anything you want with it.
Subject to anti-money-laundering rules, of course, which usually apply to larger transactions.
> it won't triple in value in one year
That doesn't have much to do with the currency, but with the market, and volatility works both ways.
...and 15bn EUR banknotes. If you think about it, they all have a serial number and it's easy to track them with a mere bigdata database. Most banknotes change hands only once before being registered in a bank again. The others are all suspicious. Keeping your money for a few months? Not a crime by itself but in most situations it's linked with laundering. Withdrawing every week from your ATM and cashed by the same drug dealer? They probably won't scream it over the roofs, but the FBI probably already uses this technique to track criminals.
If you think it's hard to track patterns in banknotes, it's ok, but it's less hard than tracking every single CB transaction across the world.
> As a risk-free, interest-bearing asset, CBcoin would be preferable to bank deposits (and even paper currency, presuming anonymity concerns were addressed), encouraging households and firms to convert their bank deposits into CBcoin deposits.
While governments might not prefer anonymous payment methods to exist, they can still recognize that much of the money-using public appreciates anonymous payments at least some of the time.
To the extent that "governments" don't like anonymous payment methods, that's mostly law enforcement/security agencies.
Central banks basically recognize that anonymous payments mechanisms will exist, and prefer that central bank currency fill that role, since the more non-central-bank money is used in practice, the less predictable effect central bank monetary policy has.
Edit: Fractional reserve banking is generally seen as a good thing by many economists. Many believe this allows central banks to stimulate and throttle the economy, ending recessions and leveling off bubbles. Why would central banks do anything to undermine this?
From an economics point of view, what they are essentially proposing is to modify the banking system so that it resembles their models.
Their models are stylised, highly simplified, and have to be massively "callibrated" in order to match economic observations at all, and even then can only usually do so between financial crashes. (The part of economics that analyses business cycles hasn't discovered the Nyquist theorem yet.)
The best guess at what would result of this, is all the problems of centralised control, and none of the advantages of the existing system. Another way to think about it is a bunch of complete maniacs being allowed to run experiments on the live production system without any testing.
Although hopefully it won't come to that.
You mean like NIRP and QE? -_-' Like you said, these guys live in an textbook economic fantasy world.
The problem is that the normal "transmission mechanism" of monetary policy is to encourage credit, and both the commercial world and consumers are in a state where they either don't want or don't need credit.
(anonymity is a primarily utility for criminals/tax evaders)
I don't expect central governments to jump ship primarily because of the arbitrary authority that tax auditing, among other powers, that it gives them, though
And terrorist and child predators, right?
If households and firms were given access to CBcoin accounts at the CB, banks’ dominant role as providers of payment services would be called into question. As a risk-free, interest-bearing asset, CBcoin would be preferable to bank deposits (and even paper currency, presuming anonymity concerns were addressed), encouraging households and firms to convert their bank deposits into CBcoin deposits.
In effect, retail payments (and securities transactions) would no longer have to be mediated by banks, as the funds would be transferred directly from one party’s CBcoin account to another’s. A disintermediated payment system could gradually replace the current centralised system and its associated credit and liquidity risks (see BIS (2003)). The main benefit to CBcoin account holders would be access to cheap and fast peer-to-peer transactions.
This sounds like all of the benefits of a centralized currency -- most importantly, stability and regulation -- with all of the benefits of current decentralized currency endeavours (Bitcoin, etc.). Assuming anonymity concerns are addressed, as they highlight.
The impact on the banking system, however, would indeed be substantial. Providing payment services is a significant source of revenue for banks.