This is programmable money where the government controls how and when you can spend it. It does not take long for most people to figure out how this restricts their freedom. I guess they will make it a bargain in some way such as charging a higher rate for cash as they are doing here. This may be a training ground for other governments to learn how to force or incentivize us to use their CBDC's.
Programmable money is like programmable computation, there are infinite applications on the spectrum of good and evil. If we are going to allow programmable money, we must allow competitors (e.g. citystate crypto, nationstate crypto, non-CB crypto) and incumbent payments like cash.
> The Payment Choice Act is a bill that would require applicable retail businesses to accept cash for transactions of less than $2,000 and prohibit them from charging cash-paying customers a higher price relative to customers not paying with cash. Retail businesses would retain the flexibility to accept payments through any other means. The House Financial Services Committee passed the bill 32-17 on 18 May 2022.
> there are infinite applications on the spectrum of good and evil.
Which means it should be firmly in the hands of the people and never in those of a centralized government, in particular, never one which collects taxes directly from the people.
> If we are going to allow programmable money, we must allow competitors (e.g. citystate crypto, nationstate crypto, non-CB crypto) and incumbent payments like cash.
Well.. precisely. At this point, though.. what incentive to the population is there for a central government "programmable" token of value?
> If we are going to allow programmable money, we must allow competitors
The 'must' in the second part is more of something that you'd like governments to do, but not something that they in any way 'have' to do. I see vanishingly small chance of any government ever doing so because it would defeat the entire purpose of the central in CBDC.
China was the leader in the push to pure cashless society. Cash still works, but only in small amounts.
Lots of HNews'ers claim cash is the only way to keep your freedoms, but that simply glosses over the fact that even if you have piles of cash under your bed, you can't do anything meaningful if the government decides to prevent/limit banks from accepting cash deposits - say in a 5 year timeframe.
After a while, businesses will simply stop accepting cash.
>After a while, businesses will simply stop accepting cash.
So when you loose you smartphone/cards you cant buy another one, open your car, pay for a taxi or even sleep in a hotel because there is no chance to go home?
Switzerland had 3 complete blackouts (1-2 month ago) for paying digital. So the sellers had to make list (and hope you come back later to pay it.). If your country just accept digital, you trust fully on digital infrastructure...i think we all know what a good idea that is.
I don't hear people saying cash protects freedom, but is does protect privacy. Can it be taken away, yes of course, if people don't care about privacy (and most don't) and don't use it then it can, and that seems to be a project in progress.
The inconvenience of "my piles of money will no longer be legal tender in five years" and "all of my money is locked in accounts I cannot access starting immediately" are in entirely different categories.
I experienced this directly, when the electronic payment system recently collapsed in my part of Canada for ~2 days. I fortunately had a small amount of cash on me. Without it, I would have been unable to buy lunch, top-up my nearly expired phone plan, and then buy a train ticket and go about my normal day. It was also fortunate for my friend, who I lent $20. Can't take cash out at the ATM either obviously. I would have been stuck at home all day. I wouldn't have been able to give a small amount of money to my friend. Being able to lock people out of their bank accounts is far more specific, and disabling, than regulations on cash could be.
Some businesses are already going cashless (here in Finland, have understood it is also happening on Sweden).
As most people anyways pay card/phone/app, it’s not worth of trouble to deal with cash. Handling cash gives you security problems (robberies) and adds costs (need to regularly take money to bank).
I am pushing 50 and the idea of America becoming cashless in my lifetime is not going to happen.
There is no way our law makers are going to want to lose access to cash. No one wants to get a bribe or conduct a shady deal in a highly traceable digital currency in the US.
Not to mention, we can't even get rid of 100% utterly useless pennies. They are basically a form of government printed litter that I am not sure is even worth a homeless person's time to be bothered with.
I was surprised at charging a higher rate for cash, until reading the article where it didn't mention that.
What was mentioned was a service fee for withdrawing cash above the limits from bank branches. Which also seemed surprising - to reduce the demand for cash-cash, restrict the supply. That that article mentions 85% of cash in circulation is held outside banks does not also seem alarming, it'd be interesting to read more about money velocity and other non-cash-cash outside the CBDC like non-CB Digital Wallets.
That rant views freedom as purely individual, and not collective, or more likely the compromises in other to have both.
It also doesn't explain the difference between CBDC with traditional debit/credit card systems, which do impose a ton of restrictions to some in order to protect freedoms for others (whether demonitizing a porn site that does not hold uploaders accountable, or reducing tax evasion).
We still have cash right now - that is the important distinction. You can choose to put your cash under your mattress, self custody has always been a thing.
Our bank accounts have some legislated protections and even if they decide to de-platform me from my bank account they have to provide me with the money (sanctions aside) in that bank account in the form of cash or a medium that can be exchanged for cash.
If cash ceases to exist then what? If the government decides that I (or a group) are to be blocked from transacting, without cash then what happens?
We currently have choice - CBDCs will remove that choice for everyone and unilaterally grant governments an absurd amount of power - as demonstrated in that thread
you compare pear and apples. CBDC is to be compared with your current saving account, whereas a debit card is how you can spend the money from that account, whether it's a saving account or a CBDC. Likely debit cards will still exist with CBDC, assuming not everyone has a smartphone.
The "advantages" of CBDC, in regard to governments, is that this is a sort of entry in a database, possibly every dollar having an "id", perfect for tracking. They will know what you bought, when, etc. Also, governments could delete that entry to remove dollar from your account. They also could simply lock that account since the CB/government issue this currency as it's not controlled anymore by your local bank. In a sense, governments already have some of these capabilities, but it's a lot of procedures to access and block the money (remember the Canadian truckers?). And at the moment, it's even harder to track the flow of money in the current system. CBDC is going to make such control much easier and faster.
The most significant thing about a CBDC that it's a liability on the government or the central bank in this case. It's a legal tender while a checking or savings account isn't
Use of one bank's credit card is voluntary and not mandated by the central authority. It's the difference between choosing to only read the New York Times or a government enforcement of one source of news
I want to quote something from another article about CBDC usage in Denmark, as it seems like Denmark is pretty oppositional to using CBDC:
"In a report on new types of digital money, Danmarks Nationalbank analyzes the popular motivations for a central bank digital currency (CBDC) amongst developed nations. As context, Denmark is one of the EU countries that is not part of the euro currency zone. A core rationale promoted by the European Central Bank (ECB) is for a retail CBDC to act as a trust ‘anchor’ for digital money once cash disappears. Denmark’s central bank highlights that its domestic payments are already primarily digital – just over 10% of physical purchases in Denmark use cash – and it does just fine without a CBDC."
I'm not really sure what 'access to electricity' actually means.
Would it still count as access if the electricity was only available for an hour a day on average? Or would it count if said access comes mostly from privately-owned diesel generators?
If the answer is 'yes' to either question then those numbers are quite accurate.
Excepting COVID, where the line went flat, it seems to be consistently improving. Compared to the other countries in Africa, I'd say they are on par or much better off.
Not a great situation, but seemingly improving at a steady clip, so maybe it isn't as bad as the bare number would imply. To steel-man the government's motives, I might hazard a guess they are hoping that a digital currency will attract more investment in technology. It's very much a "rising tide lifts all boats" plan that historically ends up with a lot of inequalities, but given their economic reliance on oil production, diversifying makes sense.
Or, it's just another corrupt scheme that is lining a few pockets.
By introducing a CBDC, the Nigerian government hopes to attract revenues that come from remittances, which have mostly shifted to crypto channels because of poor international trade policies. Today, getting USD liquidity as an importer/exporter is challenging, as there are two market rates - one for banks & few institutions, the other for individuals & the vast majority of the economy. To find competitive rates, people resort to P2P markets. Furthermore, the Nigerian government banned licensed money operators from transacting with any crypto entity - essentially shutting down revenues from fiat deposits. Restrictions like withdrawal limits on USD accounts ($10k per month) makes it highly unfavorable for such high-volume merchants to transact in USD via the banking system. A CBDC is a way of the Nigerian government looking at all that activity with the hopes to attract the revenues that flow within crypto, but they miss the fundamental step of favorable trade & monetary policies that increase USD liquidity and opens up crypto officially to capture remittance revenues.
The government is just looking for a way to save face for their failed economic policies. They’re setting up this law in a country where digital banking is unreliable; it’s not uncommon for bank networks go down for hours.
Because of how reckless they’ve managed our economy, banks are finding it difficult to access foreign exchange. One consequence is that I can no longer spend the equivalent of more than $20 per month from my local debit card on payments, so I have to resort to using cryptocurrency to pay for my websites and domain names…this is a horrible law set by a clueless government that just wants more control over citizens but won’t fix simple things like electricity and roads.
Not that I support this program, because I don't know much about it to decide, but I know from where I live now if you don't have electricity then you are living a very simple life and probably aren't using that much cash each week anyways.
So, the amount allowed to be withdrawn sounds small but it might not affect those without electricity. Plus, if they don't have electricity there is no ATM and therefore they have all their cash on hand as I know many stories of remote island villages where people just keep money in their house. The best stories are of those who are truly remote but making absolute bank selling kava roots and they come down to the major town and buy new Toyota trucks in all cash stuffed into 25kg bags of rice.
Sadly this appears to be true. Apparently the largest 12 U.S. banks (Citi, Wells Fargo, Bank of America, Chase, etc.) are pushing for CBDC and most of the ~4.7k other commercial banks oppose it. Guess who is winning? [0]
Can someone explain to me why this wouldn't have the perverse effect of discouraging the use of conventional bank accounts and causing people to just hold onto their cash or to put it in the equivalent of safe deposit boxes, or for wealthier people, to use "offshore" banks or to purchase assets easily convertible into cash?
India's approach was to cancel large-denomination banknotes, but it did not have the intended effect, https://archive.ph/ynouY
> India’s prime minister, announced in November that Rs1,000 ($16) and Rs500 notes would no longer be legal tender, he suggested that corrupt officials, businessmen and criminals — popularly believed to hoard large amounts of illicit cash — would be stuck with “worthless pieces of paper”. But the Reserve Bank of India’s annual report on Wednesday suggested that most holders of the old currency managed to dispose of it
> ... The bank’s estimate follows media reports that complex money-laundering networks sprang up in the wake of the demonetisation to help wealthy Indians deposit huge volumes of previously undeclared currency without exposing themselves to tax authorities. Such people allegedly sold the old notes, at a discount, to brokers who then dispatched low-income Indians to deposit or exchange them at banks.
> India's approach was to cancel large-denomination banknotes, but it did not have the intended effect
The objective was not to cancel large-denomination banknotes, given that even larger notes were issued in their place (2000 Rupee notes). The printing of those notes were well underway when "demonetization" was announced. The goal was to understand how much cash remained in the system, and to move away from a cash-based economy.
Just as most government programs, results are mixed. It seemed more of a failure immediately afterward, but with 6 years of hindsight doesn't seem as bad. It kicked off India's digital economy, with UPI digital payments finding mass acceptance. UPI payments went from $1.5B in October 2016, to $10B the following month. This triggered mass adoption of phone payment apps, and the transaction value stands at $140+ billion per month as of today. In most tier-1 and tier-2 cities in India, you don't need cash or a credit card to survive.
As far as tax evasion is concerned, while it wasn't any sort of total success it did pave the way for more transactions to flow through monitored digital channels. Today banks don't accept any significant amount as cash deposits and there are strict caps on annual cash transactions. Overall, the "demonetization" event of Nov 2016 was imho a success as far as the government's objectives were concerned.
As a private citizen however, I don't particularly like the privacy problems that tag along with this.
As a Nigerian, one of my biggest goals is to save enough to invest in a second passport. Since the last administration took over, their policies have been spectacularly bad - and that's coming from me, a Nigerian (and African) who has only known bad government all his life.
When COVID-19 kicked in and oil revenues dried up, the government turned on the printing presses and churned out an awful amount of Nairas. Like anyone who has a basic knowledge of economics would have expected, the Naira tanked - aggressively. From around N365/$1 to N740/$1 as of today (i.e., on the black market).
Instead of facing up to the problem, the government has created multiple exchange rates, demonized bureau de change operators, and generally restricted how much FX you can access.
And as presidential elections are coming up in 2023, millions of citizens are still eager to vote for the clowns that will just crank the lever to 11.
At some point, you just feel trapped. Most citizens don't even recognize it and the CBDC was launched without no opposition.
Come to think of it, it was launched after a series of anti-government protests in OCTOBER 2022. So, the government started tying SIM cards to personal ID numbers and trying to force a CBDC. So, if such a protest should repeat itself, you just get cut off from the financial system without fanfare.
That's what pains me: those who were protesting government brutality in October 2020 have said nothing about this and they see it as just another step towards a digital economy.
It's so discouraging being a libertarian and knowing how this will end.
The title is a bit of an exaggeration. Withdrawals above that are not banned, but subject to a 5% fee. Also, it is not a new rule but a lowering of the limit of an existing rule.
The odd thing is they try to sell it as a technology? Where is the innovation? It's just private payment networks moving onto one single network controlled by a central authority. No authority has had this responsibility in human history before. If this authority is abused you won't be able to put gas in your car if the authority denies it
Readit News
https://cashessentials.org/us-considers-legislation-on-manda...
> The Payment Choice Act is a bill that would require applicable retail businesses to accept cash for transactions of less than $2,000 and prohibit them from charging cash-paying customers a higher price relative to customers not paying with cash. Retail businesses would retain the flexibility to accept payments through any other means. The House Financial Services Committee passed the bill 32-17 on 18 May 2022.
Previous CBDC threads: https://news.ycombinator.com/item?id=30634245 (2022) & https://news.ycombinator.com/item?id=27805709 (2021)
A 15m video titled "Johnny's Cash and The Smart Money Nightmare" simulates future TV news on CBDCs. It's regularly deleted, and mirrored.
Which means it should be firmly in the hands of the people and never in those of a centralized government, in particular, never one which collects taxes directly from the people.
> If we are going to allow programmable money, we must allow competitors (e.g. citystate crypto, nationstate crypto, non-CB crypto) and incumbent payments like cash.
Well.. precisely. At this point, though.. what incentive to the population is there for a central government "programmable" token of value?
I can't see any non-authoritarian uses for it. Are there any good uses don't require a benevolent dictator?
The 'must' in the second part is more of something that you'd like governments to do, but not something that they in any way 'have' to do. I see vanishingly small chance of any government ever doing so because it would defeat the entire purpose of the central in CBDC.
Lots of HNews'ers claim cash is the only way to keep your freedoms, but that simply glosses over the fact that even if you have piles of cash under your bed, you can't do anything meaningful if the government decides to prevent/limit banks from accepting cash deposits - say in a 5 year timeframe.
After a while, businesses will simply stop accepting cash.
So when you loose you smartphone/cards you cant buy another one, open your car, pay for a taxi or even sleep in a hotel because there is no chance to go home?
Switzerland had 3 complete blackouts (1-2 month ago) for paying digital. So the sellers had to make list (and hope you come back later to pay it.). If your country just accept digital, you trust fully on digital infrastructure...i think we all know what a good idea that is.
I experienced this directly, when the electronic payment system recently collapsed in my part of Canada for ~2 days. I fortunately had a small amount of cash on me. Without it, I would have been unable to buy lunch, top-up my nearly expired phone plan, and then buy a train ticket and go about my normal day. It was also fortunate for my friend, who I lent $20. Can't take cash out at the ATM either obviously. I would have been stuck at home all day. I wouldn't have been able to give a small amount of money to my friend. Being able to lock people out of their bank accounts is far more specific, and disabling, than regulations on cash could be.
As most people anyways pay card/phone/app, it’s not worth of trouble to deal with cash. Handling cash gives you security problems (robberies) and adds costs (need to regularly take money to bank).
There is no way our law makers are going to want to lose access to cash. No one wants to get a bribe or conduct a shady deal in a highly traceable digital currency in the US.
Not to mention, we can't even get rid of 100% utterly useless pennies. They are basically a form of government printed litter that I am not sure is even worth a homeless person's time to be bothered with.
What was mentioned was a service fee for withdrawing cash above the limits from bank branches. Which also seemed surprising - to reduce the demand for cash-cash, restrict the supply. That that article mentions 85% of cash in circulation is held outside banks does not also seem alarming, it'd be interesting to read more about money velocity and other non-cash-cash outside the CBDC like non-CB Digital Wallets.
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https://twitter.com/punk6529/status/1494444624630403083?lang...
Or as an unrolled thread here: https://threadreaderapp.com/thread/1494444624630403083.html
It also doesn't explain the difference between CBDC with traditional debit/credit card systems, which do impose a ton of restrictions to some in order to protect freedoms for others (whether demonitizing a porn site that does not hold uploaders accountable, or reducing tax evasion).
Our bank accounts have some legislated protections and even if they decide to de-platform me from my bank account they have to provide me with the money (sanctions aside) in that bank account in the form of cash or a medium that can be exchanged for cash.
If cash ceases to exist then what? If the government decides that I (or a group) are to be blocked from transacting, without cash then what happens?
We currently have choice - CBDCs will remove that choice for everyone and unilaterally grant governments an absurd amount of power - as demonstrated in that thread
The "advantages" of CBDC, in regard to governments, is that this is a sort of entry in a database, possibly every dollar having an "id", perfect for tracking. They will know what you bought, when, etc. Also, governments could delete that entry to remove dollar from your account. They also could simply lock that account since the CB/government issue this currency as it's not controlled anymore by your local bank. In a sense, governments already have some of these capabilities, but it's a lot of procedures to access and block the money (remember the Canadian truckers?). And at the moment, it's even harder to track the flow of money in the current system. CBDC is going to make such control much easier and faster.
"In a report on new types of digital money, Danmarks Nationalbank analyzes the popular motivations for a central bank digital currency (CBDC) amongst developed nations. As context, Denmark is one of the EU countries that is not part of the euro currency zone. A core rationale promoted by the European Central Bank (ECB) is for a retail CBDC to act as a trust ‘anchor’ for digital money once cash disappears. Denmark’s central bank highlights that its domestic payments are already primarily digital – just over 10% of physical purchases in Denmark use cash – and it does just fine without a CBDC."
Source: https://www.ledgerinsights.com/denmark-cbdc-trust-anchor-dig...
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https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?location...
Seems like the government knows their priorities.
Would it still count as access if the electricity was only available for an hour a day on average? Or would it count if said access comes mostly from privately-owned diesel generators?
If the answer is 'yes' to either question then those numbers are quite accurate.
https://mtfenergyaccess.esmap.org/
Might not help in this case but it’s a nice frame work for thinking about energy access.
Not a great situation, but seemingly improving at a steady clip, so maybe it isn't as bad as the bare number would imply. To steel-man the government's motives, I might hazard a guess they are hoping that a digital currency will attract more investment in technology. It's very much a "rising tide lifts all boats" plan that historically ends up with a lot of inequalities, but given their economic reliance on oil production, diversifying makes sense.
Or, it's just another corrupt scheme that is lining a few pockets.
P.S: I’m a Nigerian living in Nigeria
Because of how reckless they’ve managed our economy, banks are finding it difficult to access foreign exchange. One consequence is that I can no longer spend the equivalent of more than $20 per month from my local debit card on payments, so I have to resort to using cryptocurrency to pay for my websites and domain names…this is a horrible law set by a clueless government that just wants more control over citizens but won’t fix simple things like electricity and roads.
https://www.geopoll.com/blog/mobile-penetration-nigeria/
So, the amount allowed to be withdrawn sounds small but it might not affect those without electricity. Plus, if they don't have electricity there is no ATM and therefore they have all their cash on hand as I know many stories of remote island villages where people just keep money in their house. The best stories are of those who are truly remote but making absolute bank selling kava roots and they come down to the major town and buy new Toyota trucks in all cash stuffed into 25kg bags of rice.
[0]: https://www.corbettreport.com/cbdc/
> India’s prime minister, announced in November that Rs1,000 ($16) and Rs500 notes would no longer be legal tender, he suggested that corrupt officials, businessmen and criminals — popularly believed to hoard large amounts of illicit cash — would be stuck with “worthless pieces of paper”. But the Reserve Bank of India’s annual report on Wednesday suggested that most holders of the old currency managed to dispose of it
> ... The bank’s estimate follows media reports that complex money-laundering networks sprang up in the wake of the demonetisation to help wealthy Indians deposit huge volumes of previously undeclared currency without exposing themselves to tax authorities. Such people allegedly sold the old notes, at a discount, to brokers who then dispatched low-income Indians to deposit or exchange them at banks.
The objective was not to cancel large-denomination banknotes, given that even larger notes were issued in their place (2000 Rupee notes). The printing of those notes were well underway when "demonetization" was announced. The goal was to understand how much cash remained in the system, and to move away from a cash-based economy.
Just as most government programs, results are mixed. It seemed more of a failure immediately afterward, but with 6 years of hindsight doesn't seem as bad. It kicked off India's digital economy, with UPI digital payments finding mass acceptance. UPI payments went from $1.5B in October 2016, to $10B the following month. This triggered mass adoption of phone payment apps, and the transaction value stands at $140+ billion per month as of today. In most tier-1 and tier-2 cities in India, you don't need cash or a credit card to survive.
As far as tax evasion is concerned, while it wasn't any sort of total success it did pave the way for more transactions to flow through monitored digital channels. Today banks don't accept any significant amount as cash deposits and there are strict caps on annual cash transactions. Overall, the "demonetization" event of Nov 2016 was imho a success as far as the government's objectives were concerned.
As a private citizen however, I don't particularly like the privacy problems that tag along with this.
When COVID-19 kicked in and oil revenues dried up, the government turned on the printing presses and churned out an awful amount of Nairas. Like anyone who has a basic knowledge of economics would have expected, the Naira tanked - aggressively. From around N365/$1 to N740/$1 as of today (i.e., on the black market).
Instead of facing up to the problem, the government has created multiple exchange rates, demonized bureau de change operators, and generally restricted how much FX you can access.
And as presidential elections are coming up in 2023, millions of citizens are still eager to vote for the clowns that will just crank the lever to 11.
At some point, you just feel trapped. Most citizens don't even recognize it and the CBDC was launched without no opposition.
Come to think of it, it was launched after a series of anti-government protests in OCTOBER 2022. So, the government started tying SIM cards to personal ID numbers and trying to force a CBDC. So, if such a protest should repeat itself, you just get cut off from the financial system without fanfare.
That's what pains me: those who were protesting government brutality in October 2020 have said nothing about this and they see it as just another step towards a digital economy.
It's so discouraging being a libertarian and knowing how this will end.
Also, 5% is not really significantly more than the typical fee an ATM already charges.
bunch of nutters.