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A group of over 70 Japanese organisations have decided to create their own blockchain-backed digital currency. The Digital Currency Forum is the entity behind the currency, which has been provisionally dubbed DCJPY. The Forum's membership includes four private banks, telcos, railway operators, and industrial giants such as …
Mint or burn, ie transfer to or from a bank account into a digital wallet. No more mining and 1 Digital Yuan = 1 RL Yuan.
Make things interoperable ? Laudable goal, but that's just the plausible excuse.
In reality this is just another step forward to ensuring that the government gets to see all of our cash transactions. The end goal is to make sure the government gets its cut.
Nothing wrong with digital currency I think. Really, for significant amounts, in much of the world, those of us not in the drug trade rarely see much physical cash anymore. And we haven't for decades. We use credit cards, checks (in North America at least), and such.
But why blockchain? Blockchain wastes more energy than Las Vegas lightshows and seems necessary only if you don't trust your "bank". But Japan is one of the world's more honest countries. World Population Review (https://worldpopulationreview.com/country-rankings/least-corrupt-countries) ranks it number 19 between Ireland and Iceland. That's lower than the UK,Canada and Australia (tied for 11th place), but better than the US (25th place). Why would one not trust a consortium of Japanese banks? For that matter, why would one trust blockchain? It's extraordinarily complex and seems a good deal less transparent in practice than in theory. At least it appears that a significant amount of cryptocurrency has somehow found its way out of the pockets of those who thought they owned it and into the pockets of ... well, somehow that seems a bit unclear.
.. would be automatically giving every natural and legal person in a jurisdiction an account in the central bank. These days it shouldn't be too difficult as a technical matter either, although how exactly transfers between those accounts would be carried out in practice would require some thought for this to be useful (and not, among other concerns, a privacy disaster). This would, at least, solve the problem of the 'unbanked' and eliminate a bunch of inefficiencies currently manifesting themselves in in banking and card fees (which include monopoly rents, the underlying monopoly at least partly being the current privileged access to central banks). Also, it would seem that this would go a long way to eliminating the need to prop up too-big-to-fail financial institutions (deposit guarantees could be eliminated as the central bank is always good for what it owes).
Granted, this would also make it easy to trace payments, but then this is the case already with money going trough the banking system as it is, so I'm not sure this is really a huge problem (at least as long as physical cash isn't completely eliminated and/or the legislation concerning this is up to scratch). Also, this would have a cost, but this seems trivial and could be easily covered by a fraction of the new money central banks create as a matter of routine to keep up with inflation (or to create some, actually, as a part of their mandate).
An obvious extension to the scheme would be allowing existing account holders easily (automatically) opening an account in another central bank where their 'home' central bank would vouch for their identity; this could (should) be combined with some sort of an automated, competitive market for currency exchange available to the small time punter.
… if you don't play ball, you'll get your account canceled - already happening in GERMany. Journalists daring to question the official narrative had their accounts and apartments canceled. In the future they will then have no alternative. Play ball or starve in the woods (likely forbidden).
I don't know what the big furor over "privacy" is with digital currency. I already do 99% of my transactions using debit or credit cards, so it is all tracked and traceable should the authorities take an interest in me (though I can't imagine why they would.)
I get there are people who are worried about such things. I really do. But I don't think they're in the majority, and I think the majority of the things they're worried about are better managed through appropriate therapy and medication than through restricting the advances of technology.
Aside from criminals and the tinfoil brigade I do not see a compelling reason for using crypto currencies. They all seem very fragile, the value of any "coin" seems to move around so much how can you know what you are paying.
Eventually they all have to resolve to a normal currency, just more complication.