Swiss BIS (Bank of International Settlements, the central bank for all central banks, including US and UK) Director Carstens on CBDCs at an IMF meeting in 2020, https://www.youtube.com/watch?v=mVmKN4DSu3g&t=1451s

> With cash, we don't know who is using the 100 dollar bill today ... a key difference with CBDC is that the central bank will have absolute control on the rules and regulations that determine the expression of that central bank liability .. also we will have the technology to enforce that ... if an advanced economy issues a CBDC, and someone in a 3rd country wants to use it, it will require the consent of the central bank of the residence of that person, therefore the degree of control will be far bigger.

June 2021 in the UK, https://www.msn.com/en-gb/money/other/bank-of-england-tells-...

> Tom Mutton, a director at the Bank of England, said during a conference on Monday that programming could become a key feature of any future central bank digital currency ... what happens if one of the participants in a transaction puts a restriction on [future use of the money]? ... Sir Jon Cunliffe, a deputy Governor at the Bank, said digital currencies could be programmed for commercial or social purposes ... “You could think of giving your children pocket money, but programming the money so that it couldn’t be used for sweets. There is a whole range of things that money could do, programmable money, which we cannot do with the current technology.”

> if an advanced economy issues a CBDC, and someone in a 3rd country wants to use it, it will require the consent of the central bank of the residence of that person

This is so terrible.

There are countries who try really hard to control the USD exchange rate of their own currency. In practice, it means anyone getting paid in USD has their money confiscated and forcibly exchanged for their own nearly worthless local currency at absolutely terrible rates.

I've seen people posting about it here on HN: they claimed the government was pocketing about 50% of their earnings through this process and that bitcoin is a better proposition.

https://news.ycombinator.com/item?id=30141563

These CBDCs would empower governments to do so much worse.

(Disclaimer: not an expert, I read patio11 and Money Stuff when I'm pooping and that's about it)

This is, by and large, how it currently works today. Not that often do actual pallets of cash get moved from one bank to another; a lot more often, some centralized bank has a big ol' ledger, where various banks move money from one column to another. One of those centralized banks is The Fed, that's how the US was able to freeze so much of Russia's money; there is a bank account at The Fed, and that account is where Russia keeps its US dollars (or the bank that Russia works with keeps its dollars, some of which are Russian, or the bank that the bank that Russia works with... you get the idea).

The biggest difference between a CBDC is that there wouldn't need to be a printed dollar to back that ledger, so instead of rare pallets-of-cash movements, it would be entirely digital. Printing money would be an UPDATE statement rather than through a printing press.

It'll be interesting to see how quickly it gets bought in. The experience over the years with the political flow of things like the surveillance state or financial repression, etc, is that when these systems for controlling people are bought in they are effective enough at hiding what they do, so they never really generate the outrage they deserve. It seems like it will be a routine thing for presidential candidates to be accused of corruption and investigated by the spooks during campaigns for example. It doesn't seem important enough to people that it would bridge the partisan debate.

CBDCs will probably happen in a similar way. Cheap and easy to implement. No room to make noise about the abuses because the people targeted won't have the money to defend themselves, let alone speak out in an unfavourable media environment being paid/given incentives/on board with the plan to Think of The Children. A lot like the how surveillance ended up the abuses are fairly quiet so people aren't really sure what specifically they need to fight.

>programming the money so that it couldn’t be used for sweets

That's stretching the concept 'money' a bit, is it still money if it's non-fungible? What on earth happens if the money is paid to someone? Can you 'launder' the restriction away by swapping money with a friend? Does the restriction remain indefinitely, making it completely non-fungible?

These are good questions to be asking, and they are all theoretical possibilities. Some people see this as an opportunity for improvement, others find it deeply concerning. Central banks do not necessarily need to abide by the old definition of money.

> Swiss BIS

It's weird to call it swiss BIS, the place where international institutions are headquartered is not usually relevant :) We don't say Swiss FIFA, or Swiss WHO.

The explanation of a digital currency, when you get past the paranoia about an increase in tracking you[1], sounds exactly like a "narrow bank". But the Fed has always been against those, because they think customer banks will be too poorly capitalized if everyone uses a government bank directly. That seems like the best reason we wouldn't get one.

A good reason to have them would be that it'd be really easy for the government to pay you, for instance if we had a UBI or one of those things everyone on here loves. Right now they're surprisingly bad at it. A lot of government agencies have to pay people with prepaid debit cards, and there's people who never got their stimulus checks still.

[1] mainly unjustified because they're already tracking you in regular bank accounts so it can't even be any worse…

> mainly unjustified because they're already tracking you in regular bank accounts so it can't even be any worse…

That's one way to look at it. Another way is to see that tracking will be backed up by efficient enforcement and control. That's more than a step further, that's something that completely re-organizes society.

You could argue that something like that is necessary in the 21st century, but besides the paranoia there's concern about who controls a system like that.

> A good reason to have them would be that it'd be really easy for the government to pay you, for instance if we had a UBI or one of those things everyone on here loves. Right now they're surprisingly bad at it. A lot of government agencies have to pay people with prepaid debit cards, and there's people who never got their stimulus checks still.

That seems like a good reason to not have them. Sending people checks is profoundly simple 17th century technology. Putting people who can't even master that in charge of securing against stealing an arbitrarily large amount of money over the internet is like that xkcd about voting software:

https://xkcd.com/2030/

Just no.

The issue isn't the inability to send checks. Many Americans can't get bank accounts to deposit checks into.

That's literally an American problem. Here in the UK, it's extremely easy to set up a bank account even if you don't earn very much, or if you recently declared bankruptcy. If America wanted to help the unbanked, they have every opportunity to do so.

There are plenty of ways for the unbanked to get an account. From online banks with $0 deposit requirements, to local banks with $25minimums. While there certainly are literacy or accessibility issues, the number one cause of not having a bank account, according to FDIC surveys is not trusting banks.

The first time I tried to get a bank account as a mostly broke college student, I walked into a branch of the bank that had an agreement with my university to supply ATMs on campus. I said I wanted an account. They did everything in their power to not give me an account. Eventually, they rejected me because I had a NYS non-driver's ID card instead of a license. "We've had problems with these," they said. This bank branch was in downtown Manhattan, where roughly no one drives.

A few years after I managed to get them to give me an account, I overdrafted my checking account by a few dollars and they disabled my ATM card. After my next deposit cleared, I went back to that bank branch to get my card reinstated. They did not want to do it. The manager eventually said he could help me if I "promised I wouldn't do it again". I asked for my account to be closed instead, and I will always remember how pleased the guy seemed to be losing me as a customer.

It is not easy for everyone to get and maintain a bank account.

If you don't mind me asking - why?

I just looked like someone who was not worth their time. I never did have more than $100 in the account, and dealing with me might have cost them more than they made on me since I didn't pay any fees except for the one time I overdrafted.

It's literally illegal in my country to be unbanked. The government wants to know exactly where your money comes from and where it goes to.

Inability to send you a check is a sign of privacy. It means they don't know your address or bank account number.

I still think (hope!) the real reason central banks (and governments) want a digital currency is that they're not sure completely replacing cash-infrastructure with one or more privately-owned, possibly foreign-owned, alternatives is such a great idea.

> The explanation of a digital currency, when you get past the paranoia about an increase in tracking you[1], sounds exactly like a "narrow bank". But the Fed has always been against those, because they think customer banks will be too poorly capitalized if everyone uses a government bank directly.

This sounds uncomfortably similar to the "reason" the IRS can't do our own taxes for us and send us the bill.

Sort of, but TurboTax actually lobbies for that. A lot of large banks don't even want you as a customer in the first place, but the government makes them do it.

Also, everyone here is arguing "the government shouldn't know about my finances", and I feel like "the government should do my taxes for me" conflicts with that?

Why is that paranoia? If you are OK with tracking, please put a live video feed into you washroom. You have nothing to hide there, do you?

Since I don't have any lawyers on hand, I'm not qualified to design a private system so I don't feel like making one up[1]. But since I remember how bank transfers work right now (hint: they go through the government), I can say people claiming they have some right now are wrong.

[1] for instance, I don't remember the legal status of mailing cash through USPS, but pretty sure it's different privacy-wise even though it's "the government"

Why is it not put your transaction history into a database that the government can subpoena if they want to know what you've been buying, which all of us have already been doing if you're not conducting transactions in cash? I have a lot of facts about myself I'd like to keep mostly hidden, but are not hidden from law enforcement officers who can get a warrant.

Why do you want to watch me take a dump so bad?

I have no doubt someone somewhere on the internet would pay money for such footage. Maybe it'll be a business rival seeking to publicly humiliate you.

Exactly this. We already have digital currencies. They are called US Dollar and Euro. They exist as numbers in bank accounts, transfers are safe and very efficient.

That's not what they're working on though. No one is dumb enough to try to make a central (and traditional) database/system for digital money. They could do it, and if they do it eventually will get hacked. They will use blockchain technology because of the security benefits (encryption, redundancy, validation). The part they're removing is the decentralized aspect.

> No one is dumb enough to try to make a central (and traditional) database/system for digital money.

Uhm, isn't that what literally every bank in the world is nowadays?...

Okay, I may have went too far there. I didn't properly think that through, but I still think it's a bad idea to not use a blockchain for a new currency.

What do you think the Federal Reserve Bank does? Every bank in the US has an account with the Federal Reserve. The Fed maintains a central database of the transactions between those accounts.

The only difference between a blockchain and a traditional database is that a blockchain has an inherit audit trail due to the use of crypto algorithms and digital signatures. A traditional database can have similarly immutable record keeping with digital signatures as well.