A big part of me says that a CBDC should eliminate any chicanery that an underground market allows. On that I am a proponent. Not at all a fan of a CBDC being controlled to the point where inflation can be programmed into it or the government can erase a person’s CBDC ownership with a button if they do not like that person for some reason.
How would the underworld of drugs, larceny fencing, tax cheating, government bribes, etc. escape a CBDC based economy?
Nobody is addressing this topic. I don’t think it is tin-foil hat talk either unlike some other things that get as much gaslighting. Basically the money we have in the form of cash savings, either in a bank or in a home safe, or maybe in the form of Treasury bills, etc. is only as good as the legality and willingness of other parties to accept it. Too many issues about what constitutes actual money. The government could decide to start a new system and all the politicians would go in on it as long as they are not affected.
FedNow sounds more like the implementation of a unique data exchange format
It appears to deal with data content. It uses existing communication protocols to transmit that data. Once the data is received and the validation takes place, the data is processed on the receiving end and the sender is notified with a unique identifier.
All of that is wrapped up in standard Internet communication protocols.
I wonder how this might effect the following which happened in the 80’s.
I worked for a large company and the coputer Operators would create a tape of payment to be made to employees bank account. The employees had to agree and submit that informationI think it was all ACH.
For some reason the Operator one night thought that the transmission did not work and re-ran the job, thus paying everyone twice. When he realized the issue, he contacted the finance people who then ran a different job which debited the same a=mount to make people whole and have the correct payment.
So ACH, once you signed up for it, worked both direction. It was not just direct deposit but direct debit. So here is a thouvght, imagine a company with 100,000 employees is having financial problems or the Finance Manager is corrupt. He could debit every employyees bank account just before a national holiday, and be off to some foreign country while everyone tries to figure out what happened.
How is that different than a bank employee making off into the ether with a suitcase full of cash?
One difference is that the ACH transactional theft would be easier to trace down. There’s a communications trail left from each transaction, but in a cash money theft the trail is significantly harder to follow because there’s just a series of bits and pieces of physical evidence left of the crime leading to the thief.
I say the ACH theft would be the easiest to track down.
Yes, It does seem to be quick to track down how and maybe by whom, but if that money is already overseas in a bank in a country that will not release the funds back? Perhaps a country not friendly to the U.S. or sent to a crypto account with some company like FTX.
My mentioing the ACH issue was to primarily let people know what COULD happen. ACH is useful but is also a two way street.
Not everyone knows that an ACH has happened. In fact, when I was in Georgia, I had a stock account with payments to my bank (I assume it was ACH). I closed that account and almost a year later I got a letter from them saying essentually “A while back, we received a dividend from a stock and re-opened your closed account to accept it. We then debited money from it because you had less than our minimum for that account.”. I was insensed and actually went into the bank and called them thiefs. They said they can block ACH transfers but I should have done that when I closed the account. Who thinks to do that? So they accepted the transfer and then did not tell me it arrived and just started debiting money from it.
They DID undo the charges, added an ACH block and returned all they took, but I had to drop Clark Howards name to make that happen.
ACH is simply a method of transferring ownership of money, which is usually expressed in terms dictated by the mutually agreed upon currency.
Interestingly, currency came into being for the same reasons we now use schemes like ACH. One of the first uses of paper currency was to facilitate the paying of soldiers fighting wars in Europe. Before it’s use, gold had to be physically transferred by horse-drawn wagon to the location of the soldiers in battle.
My favorite book on the subject is Nial Ferguson’s book, “The Ascent of Money,” he does a great job of telling the story of how money has changed faces through the ages.
Did I say He did? He DID say the first commandment was to love God with your heart and to obey God. And the second love thy neighbor. Yes God is a God of Love but He will also judge mankind as to whether mankind obeyed Jesus Christ.
Silicon doesn’t think, people do. The value of the US$ is not imaginary, it is based on the ability of the US as a physical entity to produce our GNP. GNP is not imaginary it is a measurement of material goods and real services rendered in the form of work.