[raziel2701]

What is the difference between a digital currency and the digital money I see in my bank account online? It feels to me like I already transfer money digitally when shopping with a credit card.

Later on that twitter thread he shares a poll by the IMF [0] where they ask you how will you be sending money to a family member in 5 years. The possible answers are cash in envelope, money transfer service, digital currency or other. Are venmo and similar services not already using a digital dollar?

[0]https://twitter.com/RaoulGMI/status/1317836130788757504/phot...

[sippingjippers]

At least in the case of the Digital Euro, one of the explicitly documented goals for the scheme is to alleviate dependence on US payment processors within Europe

(that's buried somewhere in https://www.ecb.europa.eu/pub/pdf/other/Report_on_a_digital_... )

[enjeyw]

A lot of existing digital money is more akin to a widely-redeemable voucher issued by a private company than it is to physical cash. You're free to use it in ways that are sanctioned by that issuing company, but if you want to do something like spend it with a competitor, you might run into road-blocks.

In places like the US, this feels like an academic difference, but that's because non-bank digital payments haven't really consolidated yet.

In Kenya, where one mobile phone company (Safaricom) has a 98.8% market share of digital payments, the situation is very different- effectively on private company has a monopoly on money. They can and do use this monopoly power to their advantage.

A CBDC attempts to shift money back to being a public good like physical cash, by guaranteeing interoperability between issuers, rather than everyone paying with casino chips.

[xalava]

There is a key difference in nature, with some practical consequences.

You don't have money in your bank account, the bank has a debt toward you. When you wire money or pay with a credit card, it triggers a chain of intermediaries to move that debt. It is costly in part because of the counterparty risks. In most countries, an individual however is protected from a bank default up to a certain amount.

Cash is directly minted by the central bank. In a trustless manner, if you exchange goods and services for cash, the settlement is instantaneous. Legally, this cash can be used anywhere in your country.

For everyday use, it might not change habits overnight, but it will have a long term impact on the financial infrastructure.

[anm89]

The fact that the account would be a liability on the balance sheet of the central bank, not the retail bank who you hold the account with.

As you correctly point out, these accounts are no more or less digital than your current bank account.

[beaunative]

digital currency without physical existence would lower the cost of transanction, and your wallet doesn't have to be hosted with a bank, it is local on your devices.