Japan tests digital currency, because all the cool kids are doing it already

The Bank of Japan (BoJ) has announced it will study the feasibility of a Central Bank Digital Currency (CBDC). “In [proof-of-concept] Phase 1, the Bank plans to develop a test environment for the CBDC system and conduct experiments on the basic functions that are core to CBDC as a payment instrument such as issuance, …

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Crypto vs Banking

A bitcoin money transfer takes less then 30 seconds, a wire-transfer takes about 5-7 days ... but converting your bitcoin into bank cash can take a while. The banks are busy tell everyone to signup for an on-line account because that's "money" but the reality is that online banking and crypt-currency are just electrons running around on the Internet.

[Anonymous Coward]

Re: Crypto vs Banking

And banknotes are just pieces of paper. They only have value because everybody generally agrees they do and the government concurs. What's your point?

[Anonymous Coward]

Re: Crypto vs Banking

At least it's a piece of paper and not a hard drive in the recycle bin.

[Claptrap314]

Re: Crypto vs Banking

So there is no paper in your recycle bin?

Look, I'm a coin skeptic, but let's stick to actual problems.

[jmch]

Re: Crypto vs Banking

"A bitcoin money transfer takes less then 30 seconds, a wire-transfer takes about 5-7 days"

A bitcoin transfer costs a mint, not to mention the electricity requirements to 'prove' the next block. Also, takes far more than 30 sec in practice. A SEPA payment takes 2 days and is free, or 1 day at a small cost

[Adelio]

China, a totalitarian state that does NOT care for it's population, except for requiring absolute control.

I do not see any reason for "crypto currencies" most of them seem to have large flutuations in value by the second. Not a good risk.

Any why do we need them? Ignoring criminals of course!

[Anonymous Coward]

It's not Bitcoin

When the public hears cryptocurrency, they think Bitcoin and state issued crypto is not that. It will, presumably, be backed by the full faith and credit of the issuing government. It shouldn't fluctuate more than the underlying currency.

As to why, it might facilitate the movement of funds and it would definitely allow for more control and tracking, for better or worse, but in most cases probably for taxes .

[jmch]

Re: It's not Bitcoin

I'm not sure I understand the point of a state-owned crypto-currency. After all, most 'real' currency is anyway "stored" as electronic records and transferred as an electric signal. It just so happens that it's also easily convertible to bits of paper.

What's the difference between 'real' yuan and crypto-yuan?

The main "raisons d'etre" for cryptocurrency are

a) to have a non-falsifiable transaction record that is not under central (bank) control - this is negated if it's centrally controlled by government

b) to have faster transfers with minimal transaction costs - this is not the case with current fiat currences just because banks act as gatekeepers with high costs, and their legacy systems are based on daily batch transfers. Modern online banks are already showing that with the right IT systems you can get faster transfers with minimal cost, it doesn't require a cryptocurrency

So... what's the point of the cyber-yuan, then??

[Michael Wojcik]

Re: It's not Bitcoin

There are other variants of cryptocurrency. Ether is tied to the Ethereum smart-contract platform. There are various types of proof-of-stake cryptocurrencies. There are various forms of stabilized cryptocurrencies. There are NFTs, and there are other potential new types of derivatives.

So not all cryptocurrencies are equivalent to Bitcoin; some have other affordances and properties that are of interest to certain potential users.

That said, the only advantage for the central banks that I'm seeing is the potential for increased surveillance. Otherwise you'd get more benefit from just streamlining electronic transactions using your existing currency.

I find cryptocurrency interesting from the technical and economic standpoints, but I have no interest in using or investing in it. (And non-cryptocurrency use of Blockchain is generally just a poor application or the wrong choice of tool. Nagle graphs and append-only data structures are useful; Blockchain is a pretty dumb variant of both.)

[Yet Another Anonymous coward]

>Any why do we need them? Ignoring criminals of course!

Why do you need banks and stockexchanges?

To transfer numbers in a ledger from one person to another - only taking 3days and charging you a %

[Pen-y-gors]

Pah. Old news.

I've been 'trialling' a digital currency for years. It's called the 'POUND STERLING' - holdings are recorded on a computer at Barclays Bank, and they get transferred between accounts digitally when I wave a piece of plastic, or type things on a computer. Damn clever. And people can transfer digital cash to my account as well.

And, as a bonus, you can even swap some of the digital cash for tokens that you can use when you are away from an internet connection. Miraculous.

[Anonymous Coward]

The problem with US digital sales transactions is that they are mostly credit card transactions taking on average a %2 fee. (Not sure about what the average fee in the UK). That's a huge drag on the economy, all going into the pockets of a cartel of banks. And to top it off it's terribly insecure - and no way to opt out of that insecurity except by using cash. Also, personal data from every purchase is going to be mined for whatever it is worth.

Nevertheless, in January US "won" consessions from China to allow US credit cards.

https://www.wsj.com/articles/u-s-banks-card-companies-catch-a-break-in-china-trade-deal-11579131591

This was the second big win (actually the same win) for US credit cards in China

https://www.wsj.com/articles/china-opens-market-access-to-u-s-credit-card-networks-1494613681

Because, yeah, the Chinese populace is just screaming for access to US credit cards.

[julian.smith]

First things first

"Bank of Japan (BoJ) has announced it will study the feasibility of a Central Bank Digital Currency (CBDC)"

They would be better off developing a modern banking system.

Anyone who has lived in Japan knows the that the Japanese retail banking "system" is an expensive, backward, inconvenient shambles.

Similarly, the BOJ could sort out the existing mess - most of the Japanese retail banks are "zombie", bankrupt leftovers from the Bubble Time.

Learn to walk before trying to run

LMAO