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by glitchc
1380 days ago
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I think the answer is in your question: All forms of money you currently use online (bank-transfer, Zelle, credit card, etc.) are owned and operated by private entities. None of them are public money like cash is, backed by the central bank. CBDC is intended to be a digital equivalent of cash, so that people have a public money option for digital purchases. It could mean anything from everyone having an account at the central bank to a card holding value that you can get from someone and tap to your phone to order an Uber. |
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There has also been talk of this being an offering of retail banks in the US. In order to be truly cash-like these would be quite different from normal bank accounts. Under this approach these accounts would not be eligible for many normal banking services, because people who the banks would not normally deal with (due to terrible credit, or previous bank fraud) would need to be able to get an account. Currently the banking system actually extends credit to most people with normal accounts, since people expect to be able to the money transferred to them in a reasonable amount of time, rather than needing to wait for a transaction to become non-reversal which can take a really long time.
To be truly cash-like There would need to be a rapid non-reversible transaction mechanism. If transactions could be reversed for things like fraud, then it is not really cash-like, but more like one of the various forms of traditional banking. But of course, this makes it riskier for most consumers, to the point where organizations would be discouraging people from using it if they have any choice. If you have recently tried to do a wire transfer as an individual (perhaps as part of buying a house) both the bank and the receiving party make you jump through hoops, and want you to triple verify the number, and the bank will probably ask you to explain the transaction. Largely all of this is to protect you, as there are plenty of scammers who will send fake account numbers, plus plenty of headaches that can occur if the account numbers are off by even one digit.
And wire transfers are not actually fully non-reversible! Admittedly, banks will be reluctant to even try to reverse them unless: the bank messed up (sent the wrong amount, entered a different number than you told them, etc), the receiving party confirms the reversal (like might happen if an honest person receives a wire meant for someone else, Letting the initiating bank reverse it is safer than sending it back), or you can demonstrate that you did not authorize the transfer in the first place.
And this is not even considering the privacy concerns, since unlike paying by cash, law enforcement will likely be able to trace any transactions done with the CBDC, much like it is possible for them to trace credit card transactions. After all, I strongly doubt any such current will have the privacy protections of something like monero, even if it is crypto based.