Future Forum | Bank of England

Central Bank Digital Cash is natural progression for today's digitalized civil society & economy

by
Believing CBDC
Believing CBDC | 3 months ago | in Money, Money, Money

Kudos to Governor Carney for launching this brave new forum for the general public to have a say in the future – our future – of money. Before this, ears of central banks probably had been much less accessible to the common people, and traditionally, only bankers and selected few businesses would had ever had the chance to speak with the BoE. It would had been impossible for the Bank to setup meetings to hear everybody. Even if calling for input via letters the Bank would probably have to significantly expand the staff hiring. But today, digital technology not only makes it possible – starting now – to open the Bank for the common people – to voice ideas, it’s also easy, painless, and practically free. Like Dylan said, times, they are a-changing.

Hopefully the public do take notice and do take part, and do lend strength to this pivotal time of history.

Before this forum, the only connection of people to the central bank is probably just the cash / the banknotes – and this is not even digital. So digitally, I don’t see apparently there is any direct connection the central bank has with people. Digital transactions today, we use credit cards, debit cards, banking apps, mobile apps, and many payment platforms today. But all are commercial platforms, everybody need to make a profit – from somewhere somehow. So of course the costs have to come out of consumer wallet somewhere at some stage.

Nowadays I make any digital payment anywhere and it almost seem like instantly every major commercial agent know my whereabouts and what my purchase, spending habit, shoe size, maybe they even have AI to compile some kind of matrix on me. In fact, I could just say something on a social app and some commerce platform somewhere half the world away could figured exactly what I’ll be thinking to buy tomorrow. There is a saying “data is the new gold”. So if they have to make the fee cheap, then they have to make money from something else – such as data.

Even if I’m in the GDPR jurisdiction, it could probably just mean that they have to recraft the agreements and make me agree again – to the long electronic agreements people don’t usually read anyway. And even if they do genuinely follow GDPR, it probably just means the data is no longer shared to the world; but someone still has all of it anyway. But today, if I want to do any digital transaction at all, all choices out there are for profit and commercial. Commercial entities belong to small groups of people, and it is natural that they are for profit & must look after their private interest in the first place.

I would like to have a digital cash just like the banknotes issued by BoE – a neutral body that works under the power of people, that I can use for digital transactions and is without third-party transparency, and is a reliable and trustworthy store of value / unit of account / medium of exchange.

Technology do exist for CBDC, technology exist even for cash-like CBDC. The Sveriges Riksbank is the vanguard on the front of the CBDC (e-krona) research and developments today. The BoE is also very early with the research efforts – starting with the excellent Staff Whitepaper 605 many years back.

Perhaps more political support from the public is what’s necessary to move the vision forward from here.

edited on Nov 7, 2018 by Believing CBDC

Shelley (BoE Moderator) 3 months ago

Thank you for sharing this Yen! It is definently something for us to feedback and think about. Please remember we are having sessions with each Governor over the next couple of months - please don't hesitate to post questions similar to your post above.

Michelle - FYI - interesting to feedback and seek views on.

Believing CBDC 3 months ago

Shelley, Thank you for the feedback. I certainly will take the opportunity to post some of these questions to the Governor in the coming sessions.
Cheers,

Cameron Penny 3 months ago

Hi Yen - what are your thoughts on initiatives such as the Utility Settlement Coin?

Believing CBDC 3 months ago

I don't see much clear info on how the design is, and I don't have a lot of time to search for the needle. But if it's based in DLT & the similar architecture to Bitcoin-like "cryptocurrency" - that's imbedded inside the online blockchain (therefore requiring mining & PoW), then I don't think it's practical for CBDC. The energy consumption would be infeasible, the performance not practical for enormous transaction volume in a real-world scenario, and the number of "coins" is limited - so it can't be enough for everybody to use anyway.

Cameron Penny 3 months ago

Yen, you might also enjoy this paper https://www.bankofengland.co.uk/working-paper...et-implications

Believing CBDC 3 months ago

I've been tracking Michael Kumhof, so already read this latest excellent work too. Highly recommended!

View all replies (5)

Robert Taggart 3 months ago

Regarding the keeping and using of the new 'gold' (data), guessing only those who have something to hide have something to fear? - or is one being supremely innocent??!

Believing CBDC 3 months ago

I found this line of argument similar to "why should people wear cloth?" (Even in tropical climates?)

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David Fagleman 2 months ago

I would say that this idea is central to a discussion around the future of money, espcially the role of the central bank.

Believing CBDC 2 months ago

Perspective of IMF. Very good paper.
https://www.imf.org/en/Publications/Staff-Dis...urrencies-46233

Amy Buckingham 1 month ago

This idea has been advanced to the current phase

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