[hocuspocus]

> Out of sight, out of mind. You don't see it but Visa and Mastercard consume up to 3% of the transaction amount. Over the course of a year, this amounts to $50 billion removed from the economy. The merchant pays this --- and passes the cost along to you in terms of higher prices.

Visa and MC get only a fraction of the PSP fees. You can regulate this space and bring the fees down (like the EU did). But fundamentally, an electronic payment system isn't as simple as moving money from one bank account to another in an immutable way: that is extremely cheap already and further gains from using CDBCs would be marginal at best.

> The money transfer system that deposits your check is old and slow and involves human labor. Unless you pay additional fees (banks love fees), it takes at least 24 hours for the deposit to be made and the system only operates during "banker hours" --- 8-5 on weekdays; no weekends, holidays or nights.

> A CDBC will be fully electronic/automated with instant results and operate 24/7/365 at insignificant cost. Basically, it will speed up and put billions of dollars back into the economy.

No need for a CBDC to fix that. You just need to bring your banking infrastructure to the 21st century.

[jqpabc123]

You just need to bring your banking infrastructure to the 21th century.

ACH is the central component of the banking infrastructure that needs to be brought into the 21st century. And a CBDC is how you do it.

[hocuspocus]

It's just one way to do it. One unproven way at that, and with pretty serious ramifications.

[jqpabc123]

I'd love to see an alternative that doesn't look a whole lot like a CBDC.

The "serious ramifications" are all things that are not being proposed. No one is suggesting to make cash illegal.

[hocuspocus]

UK's Faster Payments, EU's SCT Inst, Brazil's Pix, India's UPI, ...

Shifting retail banking to the central bank brings a lot more questions than just worry about what happens to cash.

[jqpabc123]

EU's SCT Inst

   SCT Inst stands for SEPA Instant Credit Transfer scheme. It was introduced by 
   the Euro Retail Payments Board (ERPB) in order to enable rapid electronic 
   payments within the eurozone. In a nutshell, SCT Inst facilitates an instant 
   or near-instant clearing of a transaction between originator and beneficiary. 

Potato, po-tat-o.

ERPB = Central Bank

Credit Transfer Scheme = Digital Currency

Put them together and what do you get --- effectively a CBDC system denominated in Euros instead of Dollars --- minus all the hyperbola, misinformation and doomsday prophecy attached to CBDC on this side of the pond.

Shifting retail banking to the central bank

Nothing is being shifted. The existing system (ACH) is being modernized. No banks will be killed in the production of a CBDC.

[hocuspocus]

What you want is instant interbank settlements that have existed for 20+ years in some places.

The scope of CBDCs is way broader than that. If no commercial bank is impacted by a CBDC then it wouldn't be a central bank digital currency, just a digital currency, and that's already the case for most of the money supply. If you use the term CBDC you're implying that the central bank would oversee a much bigger part of the money creation.

[adolph]

An alternative to ACH need not push the technology down to the consumer but leave it at the interbank level.

[jqpabc123]

Yes, this is exactly what a CBDC will do.

You'll still spend USD just like before --- not CBDC tokens. The only thing the consumer will see is new capabilities and transaction speed that didn't exist before.

Basically, a CBDC will be used to add digital wallet functionality to everyone's existing bank account.