Britons face 20k digital pound cap under Bank of England plan(reuters.com)
reuters.com
Britons face 20k digital pound cap under Bank of England plan
https://www.reuters.com/markets/currencies/consumers-face-20000-pound-limit-digital-pound-bank-england-says-2023-02-07/
34 comments
That’s the point, us serfs are supposed to own nothing and be happy. That should be just enough money to pay for leases, rents, and subscriptions.
Only the elite wealthy overlords are supposed to own things and store wealth.
Only the elite wealthy overlords are supposed to own things and store wealth.
I did not notice anything being destroyed, can you elaborate?
DCBC can be used to protect those with low income/wealth from inflation, offering tiered interest rates. It can be a tool for direct government subsidies & taxation.
DCBC can be used to protect those with low income/wealth from inflation, offering tiered interest rates. It can be a tool for direct government subsidies & taxation.
why cant those all "features" be implemented to your savings bank account?
This project seems like a huge mess.
What exactly is the "risk" to individuals that needs to be managed if the currency is backed by the BoE and Stable?
Also, no anonymity.
Also, not decentralised.
Also, the central bank can create and destroy or freeze money at any point including just your account.
Also, total access to the police and 101 other orgs without any need for warrants etc.
Also, you will need a bank to access this (so what's the point at all really?)
So after all this time and energy, the bank of england has invented... bank accounts. Only with more latency and no interest and a cap on balances.
What exactly is the "risk" to individuals that needs to be managed if the currency is backed by the BoE and Stable?
Also, no anonymity.
Also, not decentralised.
Also, the central bank can create and destroy or freeze money at any point including just your account.
Also, total access to the police and 101 other orgs without any need for warrants etc.
Also, you will need a bank to access this (so what's the point at all really?)
So after all this time and energy, the bank of england has invented... bank accounts. Only with more latency and no interest and a cap on balances.
>So after all this time and energy, the bank of england has invented... bank accounts. Only with more latency and no interest and a cap on balances.
same with india as well for their CBDC.
the reason for crypto and blockchain was to AVOID the conventional banking chanels that are regulated, that are monitored, modifiable at the whims of someone, cross border, cross platform, decentralized, across geographies.
its like CBDC took the best of cryto/blockchain and shoved themselves inbetween just to remain relevant because otherwise they certainly would've been.
if all my money is on BTC, there is no way a court or a government could order someone to take that from me.
before someone says "Abuse", well you are talking as if HSBC, DW, etc etc and all the banks in the world haven't engaged in money laundering so why is this difficult to understand?
same with india as well for their CBDC.
the reason for crypto and blockchain was to AVOID the conventional banking chanels that are regulated, that are monitored, modifiable at the whims of someone, cross border, cross platform, decentralized, across geographies.
its like CBDC took the best of cryto/blockchain and shoved themselves inbetween just to remain relevant because otherwise they certainly would've been.
if all my money is on BTC, there is no way a court or a government could order someone to take that from me.
before someone says "Abuse", well you are talking as if HSBC, DW, etc etc and all the banks in the world haven't engaged in money laundering so why is this difficult to understand?
I am not a crypto fan boy, and I don't really care about (folding) cash vs cards etc. But there is a part of me that worries a bit about some future government/central-bank deciding to implement things like haircuts and negative interest rates. Actual cash / crypto is a nice way to actually prevent that at least.
Interestingly one of the sections of Cloud Atlas is set in a future where the government REQUIRE that citizens spend all their cash by the end of the payment period. You need a special license to "save" or invest. I could see that being a policy to "stimulate demand" or whatever...
Interestingly one of the sections of Cloud Atlas is set in a future where the government REQUIRE that citizens spend all their cash by the end of the payment period. You need a special license to "save" or invest. I could see that being a policy to "stimulate demand" or whatever...
sure. i was part of the 2012-14 crowd so i've seen a lot. anyway, the point here is, these governments are taking big brother steps because that is what seems reasonable to them. Remember facebook libra? it wanted piece of crypto pie by needlessly being a part of it "just because".
These are yet another attempts. I am pretty sure it will be forced.
No one has been able to sell me this one idea.
Conventional banking already has all the surveilance, account freezing, spending limits, interest rates, collateral, instant use so why bring blockchain?
These are yet another attempts. I am pretty sure it will be forced.
No one has been able to sell me this one idea.
Conventional banking already has all the surveilance, account freezing, spending limits, interest rates, collateral, instant use so why bring blockchain?
Maybe they're just looking at a completely different audience/value proposition.
A lot of the problems in finance, for ordinary "happy path" consumers-- are still begging for "faster horses" solutions. Not everyone is on some grand philosophical argument about the nature of money and the relative power of individual, the state, and the bank.
There are at least two obvious pain points even a janky MVP CBDC has the potential to solve:
* International transfers are expensive and complicated, which makes them impractical for small transactions. The fact there's no good answer for "how does someone in Arizona send 10 GBP to someone in Manchester" seems to demand a solution. Something like PayPal is probably the least objectionable option, and I believe even their 'no guarantees, intended for family only' modes have fees for international these days.
* A state entity can service all legal players, while private banks are keen to avoid risky/expensive customers. If you know everyone in the country has some form of deposit account, you can eliminate a lot of hassle for payroll and payment processing by using that as the least common denominator.
Perhaps the "sweep to commercial banks" angle is less about making the BoE relevant, and more about avoiding appearing as a threat to commercial banks, that there won't be large balances piling up representing untapped business for them.
A lot of the problems in finance, for ordinary "happy path" consumers-- are still begging for "faster horses" solutions. Not everyone is on some grand philosophical argument about the nature of money and the relative power of individual, the state, and the bank.
There are at least two obvious pain points even a janky MVP CBDC has the potential to solve:
* International transfers are expensive and complicated, which makes them impractical for small transactions. The fact there's no good answer for "how does someone in Arizona send 10 GBP to someone in Manchester" seems to demand a solution. Something like PayPal is probably the least objectionable option, and I believe even their 'no guarantees, intended for family only' modes have fees for international these days.
* A state entity can service all legal players, while private banks are keen to avoid risky/expensive customers. If you know everyone in the country has some form of deposit account, you can eliminate a lot of hassle for payroll and payment processing by using that as the least common denominator.
Perhaps the "sweep to commercial banks" angle is less about making the BoE relevant, and more about avoiding appearing as a threat to commercial banks, that there won't be large balances piling up representing untapped business for them.
look up "UPI" a model of payment transfer made out of india. This is currently being exported to many countries around the world. It works like magic ON TOP of existing banking infra and all you need is an app. Nothing else.
Once you see and use UPI, everything else just feels stupid like a tesla racing a horse cart
Once you see and use UPI, everything else just feels stupid like a tesla racing a horse cart
I'm surprised how forward-thinking India is with their financial regulations. Working in a peripherally related field, I had to go down the rabbit-hole with their E-Mandate concepts and it seemed like a feature that prioritized user consent over making it easy to transact-- in other words, something that would never get traction in the US.
What is giving them an edge there? Is it a "we're late to market, so we don't have to repeat the mistakes we saw everyone else doing" thing? Is it a "let's throw up intentional hoops to make domestic products more competitive" play?
What is giving them an edge there? Is it a "we're late to market, so we don't have to repeat the mistakes we saw everyone else doing" thing? Is it a "let's throw up intentional hoops to make domestic products more competitive" play?
>seemed like a feature that prioritized user consent over making it easy to transact--
yes. the OTP/PIN concept has been firmly ingrained in everyone. It works fine and people are taught to not proceed if there isn't one or report if you saw a transaction that went without your approval.
edge i would say the competition. Plus, the government is making the infra so companies can develop ON TOP of existing infra and create value.
i am pretty sure you can have UPI across USA/EU in a matter of 2-3 years if people want that. That would also mean VISA/MC and PAYPAL would have to die an instant death but that would be the good thing
yes. the OTP/PIN concept has been firmly ingrained in everyone. It works fine and people are taught to not proceed if there isn't one or report if you saw a transaction that went without your approval.
edge i would say the competition. Plus, the government is making the infra so companies can develop ON TOP of existing infra and create value.
i am pretty sure you can have UPI across USA/EU in a matter of 2-3 years if people want that. That would also mean VISA/MC and PAYPAL would have to die an instant death but that would be the good thing
yeah. 2nd most likely.
there isn't much of "lobbying" that you see in USA, say in turbotax or visa/MC or paypal.
you have payment gateways fighting in terms of functionality and features, the standard is 2% across the board for "most" payments at retail. In volume, that % can go much much lower.
Because of competition, the best bet of any org is to be as open as possible. If amazon implemented their own wallet system, why would i use that when someone else's works ACROSS the board?
there is a victim to this "openness" also. Look up "paytm". a fincorp that made headlines with "Cashback" and stuff but when UPI turned up, their wallet essentially dried up. Earlier, they would PAY users with cashback to use their own wallet but now they CHARGE EXTRA for the privilege of using their services. plus, they went public and lost a lot of money.
>"we're late to market, so we don't have to repeat the mistakes we saw everyone else doing" thing?
i think USA gives too much credit and puts too much reliance on credit cards and "fraud protection". There used to be no autopay until last year i think so EVERY payment had to be a conscious effort. If i paid to amazon and i did not get the goods, well "contact amazon". there is no recourse from banks or cards or gateways. That is not a bad deal.
say you do buying/selling on facebok marketplace, well since you are paying directly to the seller, or recieving funds, there is no one to blame.
then there is actual fraud, like someone takes your ATM card and withdrawls money or takes your password and siphons off funds. In that case, you have to approach the police and have them fix that or contact the bank and have them try to revert the entry. Why should the intermediary "card" be in the middle? why should they earn that much for one-off chance of fraud?
there isn't much of "lobbying" that you see in USA, say in turbotax or visa/MC or paypal.
you have payment gateways fighting in terms of functionality and features, the standard is 2% across the board for "most" payments at retail. In volume, that % can go much much lower.
Because of competition, the best bet of any org is to be as open as possible. If amazon implemented their own wallet system, why would i use that when someone else's works ACROSS the board?
there is a victim to this "openness" also. Look up "paytm". a fincorp that made headlines with "Cashback" and stuff but when UPI turned up, their wallet essentially dried up. Earlier, they would PAY users with cashback to use their own wallet but now they CHARGE EXTRA for the privilege of using their services. plus, they went public and lost a lot of money.
>"we're late to market, so we don't have to repeat the mistakes we saw everyone else doing" thing?
i think USA gives too much credit and puts too much reliance on credit cards and "fraud protection". There used to be no autopay until last year i think so EVERY payment had to be a conscious effort. If i paid to amazon and i did not get the goods, well "contact amazon". there is no recourse from banks or cards or gateways. That is not a bad deal.
say you do buying/selling on facebok marketplace, well since you are paying directly to the seller, or recieving funds, there is no one to blame.
then there is actual fraud, like someone takes your ATM card and withdrawls money or takes your password and siphons off funds. In that case, you have to approach the police and have them fix that or contact the bank and have them try to revert the entry. Why should the intermediary "card" be in the middle? why should they earn that much for one-off chance of fraud?
IIUC, this actually seems very reasonable despite what the rest of the commenters seem to indicate.
BoE wants to have their own system to allow people to pay/receive money electronically. Certainly useful. BoE also doesn't want to have a ton of risk by storing people's life savings so they're limiting it to 10~20k pounds. The expressed goal is to facilitate day-to-day spending so this seems well above what an average person spends day-to-day.
BoE wants to have their own system to allow people to pay/receive money electronically. Certainly useful. BoE also doesn't want to have a ton of risk by storing people's life savings so they're limiting it to 10~20k pounds. The expressed goal is to facilitate day-to-day spending so this seems well above what an average person spends day-to-day.
My bank currently gives me a debit card, supports online account to account transfers, direct debits, standing orders. Presumably with crypto they will offer just the same. How will my life change?
It's always wild to me people think the current system is good. When you deposit money is a bank, you no longer own the money directly. You own an IOU from the bank (i.e., you're extending the bank a loan) and then they are free to loan out your money in the form of mortgages, car loans, whatever.
The key point is that under the current system, it's impossible to just own digital money directly! You can only be a creditor to a mortgage-lending company! This is completely crazy. What if I don't want my digital money to be loaned out to mortgages of various risk levels? FDIC insurance (in the US at least) is an attempt to fix this janky system with even more confusing jankiness (better not exceed 250k of digital money in the same account, e.g.). If I could just own digital money directly, FDIC insurance wouldn't make any sense. What am I being insured against??
Blockchains finally make it so everyone can just own their digital money directly, without being forced to instead be creditors to mortgage-lending companies.
The key point is that under the current system, it's impossible to just own digital money directly! You can only be a creditor to a mortgage-lending company! This is completely crazy. What if I don't want my digital money to be loaned out to mortgages of various risk levels? FDIC insurance (in the US at least) is an attempt to fix this janky system with even more confusing jankiness (better not exceed 250k of digital money in the same account, e.g.). If I could just own digital money directly, FDIC insurance wouldn't make any sense. What am I being insured against??
Blockchains finally make it so everyone can just own their digital money directly, without being forced to instead be creditors to mortgage-lending companies.
> If I could just own digital money directly, FDIC insurance wouldn't make any sense. What am I being insured against??
Somebody transferring your coins without your authorization/desire?
The existing system also has reversible transactions which is actually very desirable if you've ever bought anything online.
Somebody transferring your coins without your authorization/desire?
The existing system also has reversible transactions which is actually very desirable if you've ever bought anything online.
You can always keep your FIAT in a safe box at home? Or rent a box in, you know, a Bank?
Why do you want an organization to keep your money if that’s an issue for you?
Banks cost a lot to run. They make money loaning money. If you can afford it, open a Swiss or Lux account in a private Bank (private as in high end clients). Expect to pay through the nose in fees unless you give them 3-4M euros. They won’t loan your money out.
Why do you want an organization to keep your money if that’s an issue for you?
Banks cost a lot to run. They make money loaning money. If you can afford it, open a Swiss or Lux account in a private Bank (private as in high end clients). Expect to pay through the nose in fees unless you give them 3-4M euros. They won’t loan your money out.
I don't want to manage physical money, and would prefer to not pay any fees.
Crypto is perfect for this in a of ways, but has the downside of price volatility.
Stablecoins like USDC have some of these advantages, but huge downside in having to trust an org to back the coin and manage that. A CBDC would be like a stablecoin without any of that risk.
Crypto is perfect for this in a of ways, but has the downside of price volatility.
Stablecoins like USDC have some of these advantages, but huge downside in having to trust an org to back the coin and manage that. A CBDC would be like a stablecoin without any of that risk.
Well if you are the governor or a senior manager at the BoE your life has already been changed by all the trips to the Bahamas to "fact find". But if not, it won't change your life at all...
What's a digital pound, as opposed to a pound that exists digitally....I feel like this article isn't talking about unprinted currency?
This sloppy language sounds like it's concealing some critical flaw in a new currency scheme..
This sloppy language sounds like it's concealing some critical flaw in a new currency scheme..
They don't bother explaining that it is a CBDC (Central Bank Digital Currency) which is essentially just a ledger built on a blockchain but fully centralized. So instead of using some independent bank's ledger which settles with other banks or gives out cash you have a single system with complete oversight. This is only useful if it eventually replaces the other options. My question is, if there are balance limits from the beginning causing overages to be "swept" out of the system and into a bank account, what happens when there's no longer an external bank account to sweep the funds into?
Individuals cannot hold DCBC assets except through a commercial bank. For the cash sweep the commercial bank could mail you a check? Or hold cash in a simple escrow account?
Thanks so much for this!
Honestly, I posted this because I cannot find any detailed articles about it, and was hoping SOMEONE on HN might have more information they could comment.
The article links out to BoE's own paper.
https://assets.publishing.service.gov.uk/government/uploads/...
https://assets.publishing.service.gov.uk/government/uploads/...
Alternate title: "British government wants to decide who is rich and who is poor."
CBDCs such as the proposed BritCoin, which implement programmable suicide pacts (holding caps, limits on what can be purchased/sold) must be rejected.
You have 2 choices — and one of them isn’t to not use “Crypto”.
Your choices are:
- do I hold only government controlled Cryptocurrencies, or
- do I hold Cryptocurrency that I control, and cannot be destroyed by my government at their whim?
You have 2 choices — and one of them isn’t to not use “Crypto”.
Your choices are:
- do I hold only government controlled Cryptocurrencies, or
- do I hold Cryptocurrency that I control, and cannot be destroyed by my government at their whim?
You are a fool if you think the government will allow any other cryptocurrency that they do not control.
Well, I’d rather be considered a fool and give my children a chance to be free, than be considered wise and force them to live as slaves.
If you want your children to be free, then the solution is to eliminate direct taxation. "No taxation without representation" was one of the slogans of the American Revolution.
The problem is taxation. A digital currency allows the government to tax everything you do. Government will simply confiscate any digital currency that competes with theirs.
The problem is taxation. A digital currency allows the government to tax everything you do. Government will simply confiscate any digital currency that competes with theirs.
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So digital money that can be destroyed at-will by the central government AND it's not even a "store of wealth" now?
What possible positive use would anyone currently without wealth want with this garbage? People of the UK need to get out from under this ASAP.