But why is this necessary?
99% of my money has been digital for years now. Why does it need to be centralised?
The Bank of England and HM Treasury have declared the UK will probably need a digital version of the pound at some point, and commenced a consultation process to advance plans for the currency so the nation is prepared if a decision is taken to greenlight what's jokingly been called "Britcoin". A consultation paper describing …
I can just imagine the look of glee on Mad Vlad Putin's face as he imagines how much he could disrupt UK society if it were switched over completely to "Digital Cash" ...
The nice thing about real, actual hard cash is, it's resilient to things like power outages, exploding undersea internet/power cables, cyberattacks, etc. The UK infrastructure is already creaking, without any/much enemy action at all. It may fall over on its own without anyone pushing it. Therefore we should expect severe outages. But instead we seem to be piling more and more "digital" / "smart" infrastructure on top of the creaking old physical infrastructure, with little maintenance never mind expansion of the latter.
The other nice thing about real cash is: It's also private and frictionless - There's a lot of people who, if they were worried that they might have to explain to HMRC about that gold watch they wanted to sell, just wouldn't bother. But maybe they were a criminal who had just nicked the gold watch, so getting rid of hard cash would stop them and that's all good then ? Yeah, right. Of course the real criminals will always find other means of doing their dodgy business, and it's just the honest rest of us who will have to suffer.
But I expect that cracking down on privacy is the real objective here, whatever damage it may do. This government is utterly in bed with technocrats who want to make a killing at the expense of everyone else, and they don't really seem to give a hoot about the long-term future prosperity / survival of the country.
As Scotty said: "the more complex the plumbing the easier it is to block up the drain".
Just look at the crisis that happens when ONE UK bank goes wonky for a day or two. People basically can't function.
I have ZERO faith in anything created or managed by the government. This is just going to speed up the creation of a parallel economy and move more transactions out of sight.
Put another $ in the 'Alex Jones was right' jar.
Exactly. If digital cash is decentralised, one bank going wonky stops being a threat. Centralisation is what causes a lot of problems with banks. If one bank wobbles, it takes millions of customers with it...if everyone is their own bank no one central entity can disrupt the banking of millions.
"Just look at the crisis that happens when ONE UK bank goes wonky for a day or two. People basically can't function."
I recall when Tesco's computer system went Tango Uniform and they were dead in the water. I believe they put local functionality in each store so they could continue to run the registers even if they couldn't take plastic due to a network outage.
A chain is only as strong as the weakest link and the best place to attack something is at that juncture. State actors are bad enough, but it could be highly profitable for a non-state actor to develop the means to disable a digital currency even for a short period of time.
Yes you are right. There'd be riots if the Internet went off for a week. Shops like Tesco with an EPOS/ERP system can't even take cash payments without the internet because they can't log the transaction in their stock-keeping database.. And certainly larger businesses wouldn't be able to function on cash. Those poor, poor bankers.
So the solution is.. To get rid of what little hard cash we have left, so that when the power/internet does go off, the peasants will be unable to barter with their local shopkeeper or even each other for a loaf of bread?? Oh yes what a great idea, what could Possibly go wrong??
Personally I think what needs to happen is the power/internet ought to go down for a few days, just to demonstrate how bloody vulnerable we've made ourselves. Then maybe we wouldn't be forgetting about all the old manual stock-keeping that corner shops had to do, we might stop shoving everything into the Cloud, and perhaps the kids would discover the Joy of Logging Off, or something..
> Shops like Tesco with an EPOS/ERP system can't even take cash payments without the internet because they can't log the transaction in their stock-keeping database.
Is this an assumption or do you know it to be true?
Certainly when I worked on supermarket EPOS the store -> HQ was a batch link. It could go down for several days without severe implications. Obviously no new offers, central pricing changes, but things could be managed locally and the tills would keep taking cash. Local failover was tested weekly and comms failure was tested monthly.
I can believe that at least some of that resilience is no longer there as we've moved to a more connected system. Loss of connection to the payment system would be the biggest pain - I wonder if they still have the card imprint machines? Probably not since card providers are now issuing cards that are not embossed (Which is for improved security and nothing to do with the embossing costing money)
You aren't spending enough time at dealers' rooms in conventions, where the hotel WiFi is overloaded or craft markets where "we never get a good phone signal at this market", held inside the picturesque four foot deep walls of the castle.
The dealer who remembers to dig out the card swipe and foils is the one going home with a smile.
> Is this an assumption or do you know it to be true?
I know it to be true in some cases, though obviously I can't say that it's true in all cases.
A firm that I used to work for had all of its EPOS systems on remote-desktop terminals connected to central office - so if the internet went down, we couldn't use the tills at all.
I've never worked for Tesco, but they have occasionally closed stores when their IT systems fail, e.g. https://www.itpro.co.uk/610797/tesco-it-crash-takes-down-tills
But nervertheless, "making cash digital" is guaranteed to only make this problem worse. Especially if we have a really severe outage, such as an outage of the UK power system. That system has been a single trip away from failure far too many times to mention.
Just look up "black start" to see how difficult it will be to restart the UK grid if multiple power stations lost sync, which is something that could happen if a main substation / transmission line were to trip during a high-frequency, low-inertia event.
VISA/Mastercard are not decentralised. They are central points of failure.
What is being proposed removes them from the equation, a proper digital "cash" will allow for a peer to peer digital transaction. I.e. when you go and buy something and you use your "digital cash", the cash will go straight to the place you're shopping in without bouncing through a third party. That is the key difference between digital banking now as we know it and what a decentralised digital currency could bring.
No banks to deal with, no monolithic payment gateways taking a percentage...just peer to peer digital cash.
It's a wonder nobody has thought about this sort of thing before. /s
Another way of looking at is is that we have a perfectly fine private industry processing card payments and the socialist government has decided that it must nationalise this service in order to make it more expensive, less reliable and generally worse in every way.
I can honestly say since COVID I haven't touched any physical cash. So as you say it's all digital now. These transactions are taken out of an account that is funded digitally by my employer. They don't walk down and pay cash in over the counter. So we are already heading towards a physically cashless society, calling it a digital pound .. is still a pound. Personally I don't want to have to think which account to use my digital cash or my digital pound !!
"I can honestly say since COVID I haven't touched any physical cash."
Where I live, a couple of times a year (at least) just about every shop on the high street can't take plastic. There is one main internet provider and when they are down, like in the summer when amplifiers shut down due to the heat, nothing goes through. Why do they think that putting line amps on the poles in sealed black boxes (literally painted black) is a good idea in the desert? While your town may not have these issues, you might be needing petrol and the village where you might stop is down. It could even be a major motorway services location. It might also be that your bank detected fraud on your account and deactivated your card which has happened to me. Somebody in South Africa tried to charge a plane ticket to my account and the bank could see there was no way I could be in SA so declined the charge and burnt my card (figuratively). They also very not nicely declined to help me when I was in another state with my hotel pinned to the card and would need petrol to get back home. I couldn't even visit a local branch, provide every bit of ID I had on me to withdrawal some money. When my replacement card showed up over a week later, I promptly emptied the account and the next day closed the account. Always clear the money from an account before closing it so they don't put a hold on it. Any number of things can happen that prevent you from accessing your money digitally. I keep cash on me and some squirreled away at the house to cover expenses for a period of time. Even if a big Earthquake knocks everything out, the bank will charge you a late fee if you don't make a payment on time. The only people that will be able to get petrol will be the ones that pay cash if the internet is down. The same goes for other supplies you suddenly find you should have had stockpiled in advance.
There's a big difference between using cash, and using a Visa / Master / Maestro / Amex debit or credit card. The former is largely anonymous (notes do have serial numbers) and free-to-use for all, whereas to use the latter you have to have a bank account, be credit worthy, etc. A £10 note is always a £10 note, but a Visa card is only good so long as Visa says it is.
So the real question is, should government provide the kind of convenient functionality one gets from a Visa, but with the usage properties of paper cash?
It's a tough question: so many of us use commercial solutions for our "money" purposes that a state-owned alternative struggles to be justified; it could be cheaper to just give everyone who can't afford to use a commercial card enough money so that they then can <insert as many arguments about social justice as one wishes here at this point>.
The "centralised" argument is about how to administer the ledger. BitCoin is a terrible way to run a ledger, having none of the properties one gets from an exchange of paper money. Ethereum has got a bit better, at least taking the vast amount of energy required out of an exchange, but otherwise suffers all the same problems as any other public ledger. Centralising it in the way that a bank does solves most of those problems, it's then a matter of how far does one go to make it "anonymous". Being able to track money through digital exchange is probably quite a useful crime fighting tool, which is partly why dodgy deals involve suitcases of used notes to hide the exchange from the Police / authorities. Does a government continue enable such anonymous exchanges, or does it take the opportunity to be able to see all of the exchanges if, for example, a warrant is granted?
Yes, "they" will be able to see that I shop at a given supermarket, but "they" won't know what I've bought. The shopping list is not sent to the VISA card handler, only the amount paid.
Which is basically no different from "they" being able to see that I connected to The Register, or that my smartphone is connected to a given cell.
We live connected lives and we have only ourselves to blame for that. Stop referring to some shadowy "they" as an excuse for protecting your privacy. Give some real problems.
AIUI, that's why the Big Stores have "loyalty card" schemes like Nectar. Then they do get to see exactly what you've bought. They'll please you by sending targeted discount vouchers, but mostly it's for their benefit. Nectar particularly interesting as it is a system shared by several Big Stores.
the big stores get to see exactly what I bought anyway - I will probably pay by credit/debit card. So they can put all the transactions on that card together to get some sort of profile.
OK: the loyalty card gives them a bit more, mainly email address for spam purposes. Address and, to a lesser extent name, lets them work out who I live with and thus further profiling.
I suspect that card number does often give them the address by seeing were the same card is used to buy something over the Internet. A bit harder in my case as I have one card that I use for all Internet purchases and use for nothing else.
It is useful for them, clubcard saved Tesco money and enable them to plan better.
You are paid for your data in vouchers.
And to be honest the stuff we buy there is not an issue, and you are in a contract with them.
May as well get paid for it, especially when the discount vouchers come in for stuff we already buy.
They are if they comply with certain regulations. Otherwise how would an online store be able to store your credit/debit card details for future purchases to save you time?
It's bloody hard to comply with those regulations and you have to be audited once a year, which is why a lot of places don't bother. It's simply easier and less risky to avoid storing payment details. This is why a lot places prefer third party payment providers like VISA/Mastercard/Paypal/Stripe etc...you can take a payment without having to be PII compliant. Make storing that data some other organisation's problem.
They can't rely on the accuracy of that data though. My "loyalty" cards are all registered at different addresses, most of which I don't live at. Which means at least 3 households on their records don't match reality.
If Tesco et al really does try to infer what a household comprises then my parents 1 bedroom flat in a senior complex looks like an 8 bedroom mansion to them with relatively high spenders. I very much doubt that Tesco or any other data slurping organisation would lend much weight to profiling in this way. It's useless.
As I recall, Tesco mostly uses it's loyalty card data for working out other things. For example, Tesco knows based on it's loyalty data that if the weather is overcast, people buy more bananas. Therefore, if the weather is forecast to be gloomy, they will stock more bananas. Rather than getting you to buy more, they probably use the data to ensure you can always buy what you're looking for to prevent you walking away without it. Which is probably more profitable than just stocking up on crap and forcing it on you.
They will know how you responded to a particular price increase/decrease in terms of purchasing decisions even if they don't know what sort of house you live in. And they will be able to correlate that to your other purchasing habits.
Sainsburys Nectar offers seem to be a bit off.
For example, I bought a particular type of sauce. Two weeks later they offered me a discount on it.
I didn't particularly like the sauce, obviously they won't know that; but even if I did, I wouldn't be repurchasing it that quickly. If the offer had shown up in maybe 3 or 4 months time, then had I liked the sauce, then I would have been more likely to respond to the offer.
Some succeed in bypassing "loyalty card" registration. One UK 'super'market I have to use lists a persistent "registered acount number" at the bottom of every receipt despite my not engaging with any "loyalty" arrangement. It seems to be tied to the payment card, so clearly they can tie all my purchases to a single record.
"Nectar particularly interesting as it is a system shared by several Big Stores."
So they all get to share in that shopping information under the pretense of giving the user a single discount card to "manage". There are plenty of stories regarding the sorts of information that can be gleaned about a person from their shopping. The discounts given, which used to be sales when the store got a good buy on something, are a drop in the bucket compared to the value of the information they pull in. It's bad enough to use one loyalty card per store, but to give a bunch of stores insight into your purchasing habits is really scary.
but "they" won't know what I've bought. The shopping list is not sent to the VISA card handler, only the amount paid.
That entirely depends on the country, the merchant's bank and the bank of the owner of the card.
The visa and mastercard protocols provide provision for sending the contents of the 'basket' alongside the payment data. It's actually mandatory for certain types of card.
That all depends on whether they build an actual cryptocurrency based on a distributed blockchain ledger, or just a database. I suspect the latter, but hope for the former.
Based on COVID-19 shenanigans, we can expect it to be an Excel 97 macro and cost £50bn+.
Done right, we could end up with a transparent ledger that contains all transactions that anyone can view (akin to Bitcoin) but still anonymous (unless you're daft enough to tell someone your wallet addresses or link them to a public facing service that requires you to register).
What I think will happen:
1. You will get a government issued "wallet" linked to your NI number / UTR.
2. The ledger will be open, but there will be special cases where transactions will be masked (MPs, Government Officials, Celebrities that have bribed officials, The Royals etc).
3. It will be possible to seize / freeze a wallet.
4. You will be issued a mag strip / chip and pin / NFC card to use in shops.
5. The Post office will be the public facing administrative front end.
6. If you want to put existing money in to your wallet, you will have to prove where every penny came from and if you can't it will be a massive pain in the arse to resolve because everything will get frozen.
7. You "wallet" keys will be held by a bank, not by you.
8. You won't even realise it exists because you'll still be using a VISA/Mastercard at point of sale and transaction to and from the wallet will be handled by the bank "for a fee".
9. It will be billed as a move towards "greater transparency", even though being able to view the ledger will require some sort of official government form and will take 2-3 weeks to process and have a fee attached. Also, there will be no guarantee that you will get the information you have requested for "security" reasons.
If you look at documents about CBDC - what they peddle as digital cash is nothing of sorts - it's not private nor anonymous and its history can be tracked with fine detail.
Being able to track money through digital exchange is probably quite a useful crime fighting tool, which is partly why dodgy deals involve suitcases of used notes to hide the exchange from the Police / authorities
Such system is surely going to have a feature to hide transaction trees and it means it will work both ways - government and associated organisations will be able to hide their criminal enterprises, but they will be able to crush anyone going against them with ease.
It's not about fighting the crime or making people lives easier. They just crave that power and wealth and they will be able to steal our money with a press of a mouse button.
Bitcoin is a very good way of running a ledger. It is a bearer asset and really the only digital equivalent of handing over cash. The ledger is fully descentralised and requires very little hardware to run; a Raspbery Pi is sufficient. The ledger does use a lot of energy for securing transactions via proof of work mining but this ensures that no one can manipulate the supply, which a central bank can so. Ethereum wth its more energy efficient proof of stake sacrifices this. There is also the lightning network which runs as a layer on top of the Bitcoin protocol allows much faster and cheaper transactions.
Britcoin (digital pound) may not be as volalite as Bitcoin but it also has no intinsic value and is not backed by anything other than trust in the Bank of England and the Government.
A VISA card is only convenient if you can actually get one.
Bad credit history?
Bank doesn't offer Visa? Offers Mastercard instead?
No fixed address?
None of this matters with Bitcoin. Anyone, and I mean literally anyone...can have a Bitcoin wallet. You don't even need a computer or an internet connection these days. A phone with SMS will. Heck, you can even hold a "paper" wallet.
I could give a homeless person a Bitcoin wallet with some crypto in it, and teach them how to spend it in under an hour.
I can't issue them with a VISA or an account behind it to put money in. I would have to use a third party bank for that, and they would need a home address.
Crime fighting is an illusion...a lot of crime only exists because laws were set to make it so. You can eradicate crime, raise revenue and have better control by legalising and taxing things. Like certain drugs for example. Or, you can make something illegal, spend millions upon millions trying to clamp down on it and never have any control over it.
Since COVID I have touched physical money maybe three times. Everything else has been done via VISA or bank transfer.
The digital Euro already exists, so does the digital pound. There is no need to pontificate about a new currency, just create a plastic card with proper security and contactless tech, call it a wallet and let everyone put their money on it like cash at the distributor.
Maybe limit it to €200 max, to avoid the bigger issues.
Get terminals in the hands of stores everywhere, or allow the existing card terminals to deal with the wallet, and you're done.
Such prepay owned-by-the-bearer cards already exist.
They're called "gift cards".
The only plausible existing problem or slight annoyance that a "digital pound" could solve is that it's difficult for some people to get a bank account due to ID requirements - eg if you're homeless.
Except that could be far better solved by requiring high street banks to permit people to open "basic" bank accounts that have debit cards and cannot go into debt.
Hang on, they already did that.
Since COVID I have touched physical money maybe three times
I have the opposite experience.
The Covid-19 coronavirus, SARS-CoV-2, is inactivated much faster on paper than on plastic: Three hours after being laid on paper, no virus can be detected. In contrast, the virus can still infect cells seven days after being laid on plastic.
Using cards is not hygienic and then you have that moronic rule from the EU that if your five consecutive transactions go over £125 or something then you need to authenticate with a pin (not all banks enforce this) - which means touch plastic that other people have touched.
Using cash means frequently handling multiple objects that have been recently handled by multiple other people. No-one else has ever touched my card since it was posted to me a few years ago. It doesn't matter how long a virus might be able to survive on a card if you don't wipe it on other people in the first place. Having to touch a keypad maybe once a month provides far less opportunity for transferring viruses than handling piles of cash for every transaction. And of course, neither the UK or EU have paper cash, so how long a virus might survive on paper is utterly irrelevant.
You are aware that viruses existed prior to 2020?
Shopping trolley handles are pretty bad. Do you use public transport? Do you have kids that go to school or nursery?
Back in the early days of the pandemic I witnessed someone wearing blue 'surgical' gloves waiting for the checkout and picking at their teeth. More recently I saw a guy with a kid pull down his mask, lick his finger and wipe some smudge of his kids face, then go back to picking food of the shelf in the supermarket.
You are aware that viruses existed prior to 2020?
Yes, this particular one in a Chinese lab and should have stayed there.
Shopping trolley handles are pretty bad. Do you use public transport? Do you have kids that go to school or nursery?
There was no COVID before 2019, so apples to oranges.
> shopping trolley handles are known to have nasties like e-coli and salmonella on them.
Always have, always will do. There are those and loads of other microscopic bacteria on everything. Including me and you. Crawling up our legs, dropping from the sky.
"Hmm.. appears that people around here do not like the lab leak theory!"
Off topic, and at risk of poking the bears.... but a simple application of Occam's razor points squarely to lab leak as the most likely explanation.
We can safely ignore whatever the Chinese Government says, but we DO know:
- the virus was most closely related to a bat virus found hundreds of miles away
- it's known that this bat virus was being studied at the Wuhan lab
So, what's more likely:
that the virus travelled hundreds of miles and happened to mutate to the final form in Wuhan, without leaving any trace anywhere along the way nor appearing anywhere else except Wuhan
someone at the Wuhan lab made a very small mistake in safety procedures
Did you reply to the wrong post? I'm not sure how any of this would be relevant to anything I said. Using a card, especially contactless, is much less likely to transfer any virus, covid or otherwise, than handling cash. That there are other ways to transfer viruses, and that viruses have existed for more than three years, are not in any way relevant to that simple fact. Note that this thread of the conversation was started by someone claiming that using cards in unhygienic and that cash is better. Personally I very much doubt that either is a significant vector for viral transfer, so the idea that someone would go to great lengths to avoid either in an effort to stay clean sounds rather silly. But, again, that is not in any way relevant to claims about how the two compare to each other. Unless you wipe your card on a stranger and then lick it after every transaction, cards are more hygienic than cash, however little benefit that may bring in the real world.
Because it makes it easier to switch to a multi currency system which has clear economic advantages and has been something the central banks have been salivating over for years.
The BoE issues currency A and currency B.
You can only get paid in A and store A in your bank account but it can't be used to purchase things.
You can't get paid in currency B or store it in your bank but you can use it to purchase things.
The BoE controls the exchange rate between the two currencies, when you go to buy something the exchange is done using the current rate.
So with this system when the BoE wants people to reduce spending instead of using crude systems like adjusting interest rates, they can directly change the exchange rate between the two currencies and lower how much B you get for your A, and vice versa when they want to increase spending..
I think I'd call that "theft" and I'd be looking to see if anything in my legal system forbade the government from arbitrary seizures of property. Failing that, I'd be looking at ways f ensuring that said government ceased to exist at the earliest opportunity. I wouldn't be the only one.
Control. CBDCs can do all sorts of things that make certain people excited. Tokens can be set with an inbuilt expiry date, they can be coded to only be exchanged for certain items and they inherently record their precise progress through wallets. All of this control can potentially be turned on or off entirely in secret and only discovered by end users when they try to break a particular rule that's imposed upon their tokens. Among a great many other models, it finally makes Gesell economics possible without the implementation issues associated with standard currency.
Imagine if welfare payments or even private salaries were paid in a form where a certain portion could only be spent on food/housing/energy and another percentage (potentially zero) were permitted to be saved or spent on discretionary items. Imagine a group of political undesirables being identified and being able to instantly turn off their ability to accept funds or purchase travel tickets (or even fuel/EV recharging); as well as identify and question everyone with any financial association with them. The total control offered by CBDCs allows this and prevents the usual workarounds associated with systems like EBT; there's no longer a great interest in bartering (buying items with welfare and selling them at a reduced price for currency) when everyone has tokens they can only spend on the same barterable goods and algorithms can identify any crooked dealings by merchants (for example, an automatic flag if a merchant accepts a lot of payments for 'food items' without the corresponding prior purchases from suppliers) and individuals (picking up that a welfare recipient paid x for an item then was paid x/y by someone not tagged as a merchant).
Essentially, through all the extra levers that can be pulled, the issuer of CBDCs gains control, in time, over all private property, individuals and commerce without the messy business of physically seizing anything.
To a certain point: as soon as bartering is better than using money, the CBDCs start to lose control again. Worse, they lose visibility of transactions, making taxation very difficult.
I can't think of a way to stop people swapping goods as an alternative to using money. Or to stop unofficial alternative currencies or systems (e.g. swapping a certain number of hours' work for goods) taking over from using money.
This disobedience will eventually lead to concentration camps.
It's always like that when any government goes against human nature and they don't like that humans don't match their vision of the world order.
The easiest way then is to get rid of people who disagree - as it has been throughout history.
That might sound tinfoil-hattish in western Europe but is the reality in some places
The topic of the article is the Bank of England introducing a digital currency in the UK. That isn't relevant to anywhere else, though some other governments undoubtedly are authoritarian bastards. The idea that we're going to get concentration camps in the UK because Mrs Trellis of North Wales refuses to use digital pounds is ridiculous tinfoil-hattery.
I agree with the principle but what can the average person barter these days and what can they use as a non-decaying store of wealth? Very few people actually produce things themselves these days and the few that do are usually so niche that they rely on remote sales to stay afloat.
"To a certain point: as soon as bartering is better than using money,"
I am putting some things up for sale or barter in a bit. I have things I don't need and have a list (long) of things I would like to get. I'm more than happy to work out a trade with somebody if that gets me what I want more quickly. I don't have a burning need to moderate both transactions with cash. I'm hoping to come out of the weekend with a small welder if possible.
Imagine if welfare payments or even private salaries were paid in a form where a certain portion could only be spent on food/housing/energy and another percentage (potentially zero) were permitted to be saved or spent on discretionary items.
These tokens wouldn't be a currency then, money, currency, is fungible, whatever this is supposed to be, is clearly not.
The agencies responsible for CBDC development in China and India have already publicly (but quietly) mentioned token use restrictions as CBDC features. It's semantics whether it meets the dictionary definition of a currency if it becomes the default or enforced means of exchange.
Same reason we're all "encouraged" to get smart meters: control. A centralised, digital currency can be locked and blocked, and restricted in where it can be spent, or how much, or by whom. Like a credit card, but with greater granularity, and now the state is cutting out the middle man and taking all the control (and profit) for itself.
The one saving grace of this mad world we inhabit, is that our rulers are so incompetent with any sort it technology that it's unlikely to be implemented in a working state, and may never be finished at all.
Not personally, no. In aggregate, yes. It's one of the touted "benefits" of the smart meter, that it can be used as part of a more responsive load-shedding regime by managing demand at the meter level. All the power company/government/crazy rich island guy has to do is set upper limits on consumption and have the meter manage demand automatically. This already happens.
I think the difference is that, when "created" by banks, the money is balanced by debt in a double-entry (oo-er missus, etc. etc.) ledger. That debt theoretically exists and in theory becomes due at some point (but is "paid" by "selling" it on)
When created by a central bank, it is a number that is generated from thin-air ("quantitative easing") and usually ends up in the exchequer, and thus drives inflation, because it devalues all the other currency by a tiny amount each time you do it.
"The only scenario I can think of is the payment of cash welfare benefits to those without bank accounts"
But with a computer or the other tech required to turn the "digital" into real cash? Once again, the planners have no conception of the realities faced by the poor.
"Why does it need to be centralised?"
Muddled thinking, that's why. "the need for a central ledger to store user balances" is EXACTLY what happens now, except that each bank keeps it's own central ledger, there isn't one central ledger held by the central bank. The idea of cryptocurrency isn't that of digital *money* (which as you say has existed for decades now), but of digital *cash*. For some people the benefit of cash is that it changes hands immediately and is immediately available.... but the new banking technologies already provide this - immediate person to person (account to account) transfer with zero delay. (To be fair, AFAIK these systems are national-only, I'm not sure if international and/or cross-currency ones exist - having said that cash is by definition single-currency). The second benefit of cash is anonymity, which is prized by criminals, money-launderers and tax evaders, but also by people who value privacy and don't want governments poking around in their business *. Which brings me to....
"...great care will be required to ensure the public understands that the currency affords the same privacy as cash."
There is simply no way that any government-issued cryptocurrency could offer the same privacy as cash. The key is in this phrase... "Centrally governed, distributed database technologies might achieve the ledger requirements". In this sense, they are using "distributed database" as a technical term, meaning data is physically stored and processed in diverse locations, but it is still "Centrally governed" ie there is a central authority, the bank, that can see all transactions AND knows the identities of the transacting parties. Allowing people to open accounts anonymously or pseudonymously would completely go against banking regulations like "know your client" - it's never going to happen.
Final nail in the coffin of this terrible idea - the value that people see in Bitcoin is that it is not possible to arbitrarily create more and inflate away the value. A central bank digital currency would almost certainly allow the central bank to issue as many as they want whenever they want, just as they do currently.
* And depending on the level of trust you have in a government, this can be a primary and very legitimate consideration. Would you trust the banks and/or government to have full oversight of all your earnings and spendings if you were living in the Arabian Gulf, Iran, Afghanistan etc etc???
"but the new banking technologies already provide this - immediate person to person (account to account) transfer with zero delay. "
And there isn't a week that goes by without a news report of somebody being scammed of the money and nothing the banks will do about it. They set it up to be just like cash so if you are mugged digitally, it's just like being mugged on the street except that you likely have more "cash" in your bank account than you would in your pocket. Report it to the police and get a nice shiny new case number in exchange and naught else.
Ah, just because the cost of running the blockchain is farmed out to everyone (want to use Britcoin? Run a miner on your electric bill! Proof of Stake!) doesn't mean you get to read it - govt spending kept under a different encryption key.
Until that gets leaked, of course.
"This ledger entry says... "Procurement, £6.3Bn"
Does that tell you anything?"
Yeah, some military aid for a dodgy third world general to get them into the presidency so the "leadership" is more friendly towards businesses in that country along with some kickbacks.
> the way we pay for things becomes more digitalised
From the tap-to-pay token in my pocket through to the PDF monthly statements, how much more digital can it get?
> the potential for large and rapid outflows from banking deposits into digital pounds
> including the need for a central ledger to store user balances.
Ah ha - this is really just an attempt to create one single place to hold (ultimately) everyone's basic "chequing account", taking them all away from the high-street banks. That can't possibly have any down-sides.
Transaction fees, including conversions to and from BritCoin (you know it'll end up being called that, or worse - Coiny McCoinface!)? No risk of creating an effective split in who uses which (if bonk-to-pay works equally well for the customer, why would customers want to pay to convert?) so traders have to provide both services and absorb those fees as well, making for an expensive and confusing transition period.
Sorry, what was the point of this again?
> UK can't dismiss CBDCs, because its trading partners and allies are already working on their own equivalents
Well, we already pay conversion fees for cross-currency trading, so what does it matter to anyone if we're spending Sterling to buy Rupees or ERupees? We just get whichever our trading partner wants and take the conversion fees into account when deciding if the trade is effective.
How about if the two Ecurrencies were mutually convertable without any fees, that would help. They could peg them together as well, get rid of all those arbitrage costs and uncertainties as well.
One World Currency?
(you know it'll end up being called that, or worse - Coiny McCoinface!)
It'll be the GBP still. Great British Pwnd.
But I don't get it. Most of my Pounds are digital already and already vulnerable to pwnage from people who might demand my wallet, watch and phone. I realise there are efficiency gains here when those functions are collapsed into one frequently lost/stolen 'smart' gizmo. I guess it'll make tracking and controlling how we spend our money, along with the ability to 'influence' that by linking the currency to our Individual Carbon Allowance.
When the government is going to do something you don't like and you go to protest, they may flag you and restrict your money. Since cash will not exist, you will not be able to buy anything. They may put restrictions so that you can only buy beans and toast and pay rent, but still - they can limit your freedom with ease not seen before.
Something like this was trialled in Canada - remember trucker protests?
Now, you may say fine, I'll get someone to buy me stuff. But that someone will be connected to you and it will be easy to spot an anomaly in their spend pattern and yourself stopping buying beans and toast. Furthermore something like this can be automated with the use of AI - basically anyone willing to help you will be financially excluded too.
"Most of my Pounds are digital already and already vulnerable to pwnage from people who might demand my wallet, watch and phone."
At least the rest of us can laugh and make fun of you when you get ripped off due to putting major financial things on your phone, watch and in your wallet. Do you really need to walk around with full access to your retirement account "just in case". I've never come up with a need to have my full paycheck instantly available via a small piece of plastic. I even set my mother up with a separate bank account for day to day use so she isn't exposing her savings. The bank serves a lot of retirees and knows about not linking accounts.
I can be held up for my cash on hand, but IRL, that's about it. My debit card in my wallet is only good for a couple of hundred and I replenish that account as needed. My main account's card is locked away at home. Perhaps I'm a bit more paranoid than many, but I've structured things so I have less of a chance of getting hurt really bad if I get skimmed/scammed.
Cash is "worth" it's face value - eg a £5 note
If that cash is used 100 times in exchange for goods and services it is still worth £5.
If I use current "digital" technologies the "money companies" take a slice at each transaction - eg 1.5% - so after only 67 transactions the cash has earned more for the "money companies" than the face value of the cash. That is why they love digital transactions so much and quietly made lots of money off the back of Covid and the reduction in physical cash spending.
If this new digital currency came in, would there be a transaction charge to a provider at the point of purchase (stupid question!) and who would this fee go to as the blockchain presumably run by the Government would become involved ...? Would there be transaction fees and government blockchain fees? Is it potentially another hidden tax on spending?
Can we hear the bankers wringing their hands in glee?
"If that cash is used 100 times in exchange for goods and services it is still worth £5."
Well it isn't really - if you spend it at a retailer who then pays it into their bank then they'll pay a service charge for depositing that cash - it might be a lower % than they'd pay for a credit card transaction, but the bank will still take their cut. Only if the cash never touches a retailers bank will it not incur any fees.
Find a bank a retailer can use to deposit cash ... they are expressly avoiding as much cash handling as they can (eg early closing, no night safes, complaining about cash deposits at "busy times", charges for cash handling, even arguing the toss about issuing coin bags!)
The whole point is if you choose to avoid cash going via the bank there are no charges but by digitising the system, and eliminating the cash option, you are forced to join a monopolistic system that enforces payment.
"Well it isn't really - if you spend it at a retailer who then pays it into their bank then they'll pay a service charge for depositing that cash - it might be a lower % than they'd pay for a credit card transaction, but the bank will still take their cut. "
I had a chat with the owner of the local corner shop about this and it's why he doesn't charge for cash back if somebody uses a card. He moves the cash along without having to pay a currency fee at the bank. He also doesn't need to visit the bank that often and enough poorer people bring in coins that he rarely has to "buy" coins from the bank for which there is also a charge. I'd have to agree that it would be harder to do things this way for larger stores.
"If that cash is used 100 times in exchange for goods and services it is still worth £5."
I love Terry Pratchett for pointing out in "Making Money" that while some coins cost more to produce than their face value, they keep on being worth that for decades in most cases. In comparison to digital bux, it takes no further energy for that coin to continue being worth its face value for as long as the engraving is visible. The oldest coin currently in my collection is from 1835 and is completely legible. There might be one older, but I'd have to look. The numismatic value is much greater than its face value at this point and I expect that the metallic value is more as well.
A while ago, people saying that this is coming were called conspiracy theorists.
If you are curious where this is going, just look at new BoE logo - you will notice there is no more cash on it.
Combine this with online safety bill, public order bill and few others in the works and you'll see we are very close to having one day wake up in a total dictatorship.
Now imagine that properly evil government gets elected and they get all those powers.
Every person should oppose this, but in reality there is nothing anyone can do as this is mandated by Davos.
Every country that has been infiltrated by Davos people is working on this.
The warnings have been obvious for quite a while but too many people want to live insulated lives being fed outrage by their favourite news channel. It is interesting how in the USA some of the most vocal opposers of the patriot act in 2001 are now some of the most supportive.
Once you have the power it is very hard to let go!
Well, I can confidently predict that none of the current government have the wit or wherewithal to get off before it's way too late*. Of course, it'll be our money, out of general taxation, that pays for the think-tanks and implementation boards, and for any pilot programme if it ever takes place before failing abjectly.
Meanwhile, in the real world, "digitalisation" is driven by identifiable needs, benefits, and written use-cases.
*This is easily demonstrated by pointing out that they were all pretty much hand-selected at the last election under two criteria: a slavish loyalty towards Boris Johnson, and an unerring belief in the brexit unicorn, both of which are things that have demonstrably contributed to the current execrable state of this country and its economy.
Yep, would definitely use it if unspecified 3rd parties were able to add unspecified "functionality" to my money. Like Amazon spamming me constantly based on everything I buy ever. Palantir being informed of any medicine I buy. Government being able to limit payment to 3 beers per evening on a night out..........
As far as I can tell, it is a crypto currency with a centrally governed ledger, and regulated wallet providers.
So... a bank account system.
If the wallets have to be regulated and only approved companies can run them, what's different to current bank accounts exactly?
The only difference I can see is that the transaction would be regulated and potentially fed via the BoE's systems, rather than just bank to bank, via one of the many existing money transfer systems - fast transfer, BACS, etc...
This is all about control. It will be abused by government; they can't resist the ultimate power of life and death this idea encapsulates. Having money that runs out in time, saying how you spend your money, breaking down your buying habits and saving you can only for example have 5 eggs and a certain amount of meat (if even meat is allowed in the future). This control system is all encompassing and will generate a future of human slavery. Well slavery for poor hardworking taxpayers at least. It will ultimately end in war, this amount of control belongs to no one, and no organisation and certainly no government.
Digital money as a replacement to money should be debated in parliament and if given the go ahead, we as a people of the UK should have a referendum on the proposal.
"It is a lot easier to board a plane for a tax haven with a digital wallet/USB stick with a few million on it than have to check in the necessary suitcases of notes and pay the excess luggage fee and hope all the cases make it to the other end..."
People still do travel with way over the currency limits without declaring it that it's amazing. Silly too. There are so many better ways to move value around so you can access money on the far end without being caught traveling with it, which can be seen as a crime in the US according to asset seizure laws.
"Something where the government can't freeze access to my money because I said something wrong."
But that's one of the few things the government can do very well. They're pants when it comes to finding stolen cars, but if you disparage this week's protected mob, you're banged up in the slammer right quick.
"great care will be required to ensure the public understands that the currency affords the same privacy as cash."
But it won't. It will have less privacy.
If I take cash from a cash machine or, more likely get it over the counter at the bank, its possible the serial numbers can be linked to me (assuming all new sequential notes used to fill the bank till / machine & they track each card and what notes should be dispensed to each user)
However once I make a series of small transactions, which could via serial no. trace me to using that shop, spending a twenty each time I end up with a stack of 10s, 5s and coins that are difficult to link to me, as although there potential serial no. linking me to being a user there, it's quite difficult to go much further in the "change notes" - e.g. quite likely the 10 I got in my change was never registered to the store, instead was from a previous customer.
I tend to use quite a lot of cash as I don't do online or phone banking & few places take cheques (& I don't use storecards despite the bribes e.g. I was in Tesco last week and some things were on offer as £s cheaper but only if you had a "clubcard" - not open to a non "loyalty card" user).
So tracking of my spending habits is fairly minimal, only tends to be big ticket items such as "white goods", holidays etc. that are non cash transactions.
.. Not that there's anything exciting about my spending (I wish I was having a misspent fun filled middle / old age of buying quarters of hash or bags of weed etc. but recent non food purchases have been decidedly dull such as tins of paint & brushes and rollers & similar DIY stuff to save a few quid)
..Just don't want to be tracked in my spending habits (& added benefit of no financial apps on my phone, so in unlikely event of being mugged for my budget android device, about the worst the thief could do is post some fake beer reviews on the untappd app.
"I tend to use a lot of cash as drug dealers, prostitutes and builders prefer it."
You can also negotiate a discount with a plumber that's come to unblock the drain. Small traders that only do business to business transactions will sometimes sell things wholesale for cash. The item you purchased gets recorded under "shrinkage, Damage and waste" on the accounting.
"I was in Tesco last week and some things were on offer as £s cheaper but only if you had a "clubcard""
Many stores will have a telephone number on file and you can use that if you've "forgotten" to bring your loyalty card with you. Just use phone numbers of family and friends until you find somebody that has one of those cards. Another good place to get those cards is at estate sales. I've come up with a few that way. If they have redeemable points, I don't use them just to stay on the right side of things, but just take the discount. A friend of mine that passed away a few months ago will live forever at the cheap tool store.
I lived through decimalisation. At that time the Sterling pound was subdivided into 100 parts instead of the 240 (or twelve, depending on your viewpoint) that had prevailed before.
Is this an update into two subdivisions, or does the digital part mean that you either have a whole pound or you don't?
My wife buys into (pun not intended) a lot of bollox....
When she saw this story it was immediately equated with the 'great reset' and governmental control. On the other hand she thinks she's saved 'at death'.... she's already controlled by the dog collar kiddie fondlers so she's a bit gullible.
> I've not used a pound note for decades.
I've not seen one for decades. They were phased out in favour of coins in 1983-8, at least in that part of the world where Sterling tokens are issued by the Bank of England.
> Even my window cleaner asks to be paid digitally nowadays.
So you show him a finger?
Just reminiscing, I stashed one of the last BoE pound notes in a pocket of my wallet, for nostalgia's sake.
Foolishly I left the wallet in my car.
The car was nicked. And a few days later discovered and reported to the Police.
My wallet was still in it! Emptied, of course, of anything valuable. Including my final pound note! Bastards.