[solotronics]

I have been wondering why the US doesn't make a trial crypto dollar. If it doesn't work out what is the cost? Relatively nothing. If it does work out? it would strengthen the USD position as the global settlements layer and give the US control over a new monetary domain.

For examples of this see LIBOR/"Eurodollar"

[shadowgovt]

The US government is generally hyper-conservative in the financial space of what the Fed directly controls for myriad reasons. The bank of computers that reconcile transactions between banks still shuts down on the weekends because the law around its operation is based on the old law where human clerks were doing the reconciliation.

The cost if it doesn't work out is damage to the trust in the system and the stability of the dollar in general, which is the thing the Fed pathologically seeks to avoid.

And as the country that can mint the currency the IMF designates other countries' international debts in, the US doesn't generally see itself in need of further strengthening the USD's position in the world.

(Interestingly, when I lay it all out like that and add it up, the US monetary policy looks like a big business's bureaucratic system, the kind that'd be ripe for disruption by a startup. Of course, it's not quite so simple when we're talking nation-states and not Silicon Valley ventures).

[npo9]

> Interestingly, when I lay it all out like that and add it up, the US monetary policy looks like a big business's bureaucratic system, the kind that'd be ripe for disruption by a startup. Of course, it's not quite so simple when we're talking nation-states and not Silicon Valley ventures

That’s because governments have the privilege of establishing itself as a monopoly. They control the rules of the marketplace via regulations.

[ashtonkem]

Why? What extra functionality does creating a cryptocurrency enable?

[solotronics]

Someone in say Guatemala that has no bank account and never touches a USD might use a ubiquitous "dollarcrypto" on their phone. Lots of people around the world use cryptocurrency to hedge against inflation of their local currency. A US crypto would increase US influence.

[lukifer]

It's often forgotten that the only real benefit of blockchains is that they are distributed; one can implement all the same functionality using centralized databases.

What I find really surprising is that the government hasn't created a set of standardized APIs for financial transactions, flowing through traditional web/cloud/mobile tech. From a tax collection/enforcement perspective, it would seem to be in their interest to make "smart money" with convenient P2P digital transactions. Given the transparent corruption between Washington and banking institutions, I wonder if they don't want to risk being disinter-mediated, or if no politicians have even tried to pursue such a thing (the closest being Warren's plans to add banking services to USPS, which I think is a great idea).

[ashtonkem]

I think blockchain fans consistently overstate the utility of distributed processing from the end users perspective. Any blockchain payment system I’ve seen was strictly inferior to existing mechanisms.

I don’t really see why the govt. would need to create such a system; the private banking and consumer finance space has been doing an acceptable job so far.

[lukifer]

While I favor "distributed all the things" from a political/ideological perspective, it indeed carries massive performance and utility tradeoffs, compared to centralized solutions, and is very difficult to sell to end users without a critical mass of adoption / network effects.

Moreover, as BTC mining consolidation demonstrates, it's certainly possible that distributed systems tend to devolve to quasi-centralized systems with extra steps (Exhibit B: GitHub massively dominating the "distributed" git ecosystem).

> the private banking and consumer finance space has been doing an acceptable job so far

...really? Can I join you in your alternate universe? :) The fact that none of the consumer payment systems (PayPal/Venmo/etc) interoperate with one another is nothing short of embarrassing in 2020. Or the fact that ACH doesn't operate on weekends or holidays, as though all transactions were still processed by humans working M-F 9-5. And that's saying nothing of the missed opportunity for smart money / smart contracts to be baked into USD itself.

We don't need blockchains to upgrade money; just government mandates/incentives for standardized APIs to be implemented by banks and user-facing applications.

[ashtonkem]

I’ve never really struggled to send money where necessary. The distributed nature of solution creation has created a quasi monopoly around Venmo (see what I did there?).

The unavailability of ACH on the weekends is less of a protocol problem and more of a habitual problem; bank transfers used to require people doing work by hand, and that habit remained.

I think smart contracts have proven themselves to be significantly less useful than originally anticipated.