DIGITAL POUND - CBDC

lindabea

Been reading that the BoE is looking into introducing a digital pound possibly around the end of this decade. 

https://www.bankofengland.co.uk/the-digital-pound

But from what I been reading, I don't understand how this is any different to the current system of paying for goods and services by an electronic transfer through a bank account.   The way I see it is that if I have £100 in my bank account, it's the same as saying I have 100 digital pounds.  So can someone please explain what would be different. 

Shakin_Steve

In the consultation paper that they released last year, the only reason that they stated was:

At this stage, we judge it likely that the digital pound will be needed in the future. It is too early to decide whether to introduce the digital pound, but we are convinced preparatory work is justified

Hmmmm.....that's as clear as most press releases from the financial sector. 😂

propunter99

It would allow digital money to be 'programmed'.

The use case they give for that is "if you give your kids pocket money, you could program it so that it couldnt be spent on sweets".

But of course, it wouldn't take long for the gov to program welfare payments so that people are restricted to only buying things that the gov deem as appropriate.

It could also be used to invade peoples privacy and keep logs on peoples spending in a new way that the gov doesnt currently have the facilities for. 

There's no problem that CBDC fixes. We don't need it. They want us to have it.

This is a good video to watch.

eskbanker

propunter99 said:

It would allow digital money to be 'programmed'.

The use case they give for that is "if you give your kids pocket money, you could program it so that it couldnt be spent on sweets".

But of course, it wouldn't take long for the gov to program welfare payments so that people are restricted to only buying things that the gov deem as appropriate.

It could also be used to invade peoples privacy and keep logs on peoples spending in a new way that the gov doesnt currently have the facilities for. 

There's no problem that CBDC fixes. We don't need it. They want us to have it.

This is a good video to watch.

Obviously you're not alone to hold that sort of mindset, and are unlikely to be open-minded about the safeguards "they" commit to implementing, but for the sake of balance it's perhaps worth quoting the above BoE article:

• Would digital pounds be used to monitor what I do with my money?

  If you used digital pounds, the Bank of England and the government would not collect any of your personal data and wouldn't be able to see how you spent your money. You would access the digital pound through a virtual wallet and you would have to share some personal data with your wallet provider. This is because you would have a commercial relationship with your provider and they would require some form of ID to prevent financial crime or fraud. Your privacy would still be protected by data privacy regulations and your personal data would not be shared with the Bank or the government.

• Would the Bank of England restrict what I use my digital pounds for?

  Neither the Bank of England nor the government would be able to program your digital pounds or restrict how you spent them. However, you would have the ability to program your own payments, if you wanted to. 

propunter99

eskbanker said:

propunter99 said:

It would allow digital money to be 'programmed'.

The use case they give for that is "if you give your kids pocket money, you could program it so that it couldnt be spent on sweets".

But of course, it wouldn't take long for the gov to program welfare payments so that people are restricted to only buying things that the gov deem as appropriate.

It could also be used to invade peoples privacy and keep logs on peoples spending in a new way that the gov doesnt currently have the facilities for. 

There's no problem that CBDC fixes. We don't need it. They want us to have it.

This is a good video to watch.

Obviously you're not alone to hold that sort of mindset, and are unlikely to be open-minded about the safeguards "they" commit to implementing, but for the sake of balance it's perhaps worth quoting the above BoE article:

• Would digital pounds be used to monitor what I do with my money?

  If you used digital pounds, the Bank of England and the government would not collect any of your personal data and wouldn't be able to see how you spent your money. You would access the digital pound through a virtual wallet and you would have to share some personal data with your wallet provider. This is because you would have a commercial relationship with your provider and they would require some form of ID to prevent financial crime or fraud. Your privacy would still be protected by data privacy regulations and your personal data would not be shared with the Bank or the government.

• Would the Bank of England restrict what I use my digital pounds for?

  Neither the Bank of England nor the government would be able to program your digital pounds or restrict how you spent them. However, you would have the ability to program your own payments, if you wanted to. 

You're right, I'm very skeptical of the whole thing.

The people of this country do not need this. It only gives the gov more control over our money.

"They" commit to implementing protections, yes, but the gov historically backtracks on it's 'commitments'. 

Also, do we really believe this wouldn't be used to spy on us? We get spied on from every other angle already.

eskbanker

I'm undoubtedly less paranoid about it than those who choose to see it as part of some sort of big state conspiracy, but do agree that there's no obvious need for it.

born_again

Shakin_Steve said:

In the consultation paper that they released last year, the only reason that they stated was:

At this stage, we judge it likely that the digital pound will be needed in the future. It is too early to decide whether to introduce the digital pound, but we are convinced preparatory work is justified

Hmmmm.....that's as clear as most press releases from the financial sector. 😂

That is very clear.
Cynical mode on..

We need to spend a lot of money on a feasibility study. I have a few mates that are more than happy to do this for a consolation fee..

This is just the same as our local council that is now engaging in yet another feasibility study into trams in the city. Despite several others in the last 40 years. All of which cost millions, only for the council to say. We can't afford to continue with the project at the end of each study.

Cynical mode off...

eskbanker

To be fair, preparatory work has been going on for years, and there does seem to be some sort of justification for doing so, from various perspectives.

My understanding is that the subject has been considered in response to a range of related drivers, including the move away from traditional payment methods (cash, cheques, etc) and transaction channels (online v bricks & mortar shopping, etc), together with the rise of cryptocurrencies, and the fintech market growth, and so on - arguably it would be negligent of a central bank not to evaluate a range of strategic responses to such changes.

However, there are naturally concerns expressed by more excitable types, some of which have at least some validity, so it's important that myths are debunked and expectations managed - every time the subject comes up on here, there are wild assumptions made about how it would replace cash and so on, so there's undoubtedly an educational issue to be dealt with:

https://forums.moneysavingexpert.com/discussion/6230099/a-cashless-society-peer-to-peer-payments/p1

eDicky

I'm quite surprised to see the continued survival of this thread because all previous threads about CBDC, the intention for it to be programmable and allegedly to supersede all other forms of personal financial transaction, were deleted within hours or a day or so.

gravel_2

Regarding programability - a key term to look out for is "Retail CBDC". This term has been used by, among others, PM Rishi when he was talking about the development of CBDC pound. This is indicative of pre-programmed money, and the existence of other classes of the same currency for other purposes (such as commerce, business etc) for other people/entities. One currency for you, a different one for me. You may be excluded from certain economic activities and purchases by design, not actively/ad hoc by the BOE.

In any event, once the system is in place it is open to abuse regardless of reassurances given now by the relevant institutions and politicians.

Nasqueron

gravel_2 said:

Regarding programability - a key term to look out for is "Retail CBDC". This term has been used by, among others, PM Rishi when he was talking about the development of CBDC pound. This is indicative of pre-programmed money, and the existence of other classes of the same currency for other purposes (such as commerce, business etc) for other people/entities. One currency for you, a different one for me. You may be excluded from certain economic activities and purchases by design, not actively/ad hoc by the BOE.

In any event, once the system is in place it is open to abuse regardless of reassurances given now by the relevant institutions and politicians.

But then again, so is anything - pass a law saying cash withdrawal is limited to £10, pass a law saying any business only taking cash must be investigated by HMRC every month, require CC firms to give data on what you spend on etc.