[HN Gopher] Japan to implement bank-deposit-backed digital curre...
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Japan to implement bank-deposit-backed digital currency in 2022
Author : thesuperbigfrog
Score : 110 points
Date : 2021-11-24 15:23 UTC (7 hours ago)
(HTM) web link (asia.nikkei.com)
(TXT) w3m dump (asia.nikkei.com)
| rattlesnakedave wrote:
| I'm very bullish on federated, permissioned, blockchains in the
| world of traditional finance, and here's why:
|
| - Having ledger that is append only by a set of trusted parties
| gives you all of the benefits of a distributed ledger, as well as
| the ability to do things like clawbacks, comply with regulation,
| etc.
|
| - The future I see is multiple blockchains operated by networks
| of payment processors. For instance, Visa, MasterCard, etc. can
| all work together to maintain one blockchain. Other countries /
| regions can have their own. Interop can be done with bridges
| (like in defi now).
|
| - Throughput can be drastically increased between banks.
| Transactions become confirmed instantly. No more waiting several
| days for ACH. You can confirm a good balance from the sender, and
| credit the receiver instantly.
|
| - "Just use a database" the hackernews commenter shouted out.
| Using a database instead of a blockchain limits what you can do
| in terms of 3rd party interop, and hamstrings you for
| upgradability in the future. Facebook's MySQL upgrade is taking
| YEARS, and they're a SINGLE TECH COMPANY. If you want to move
| faster, and maintain interop blockchain is the way to go.
|
| - This opens the door to multi-asset blockchains between
| financial institutions. Instruments like loans, equities, etc.
| can be tokenized, FRACTIONALIZED and traded b/t institutions much
| more quickly than they can today, because they'll be a part of a
| permissioned verifiable system. Write a loan today, fractionalize
| and sell it instantly.
|
| There's so much more that's possible here too. Technologies like
| HyperLedger are really moving the ball forward. I think a lot of
| the criticisms of this sort of thing are due to shortsightedness
| of what is possible.
| throwawaygh wrote:
| _> Write a loan today, fractionalize and sell it instantly._
|
| To make error is human. To propagate error to all server in
| automatic way is #devops. To burn down entire global financial
| system due to parser bug in bastardized typescript clone for
| blockchain contract language is #defi.
|
| (On a more serious note, this sort of thing really rings of
| "what could possibly go wrong" for me :)
| carlineng wrote:
| I'm somewhat bullish on the promise of permissioned blockchain
| systems, but the Facebook/MySQL example is misleading --
|
| * Facebook doesn't need MySQL to interop with other systems in
| the same way that blockchain enables.
|
| * Relational semantics are way more complex than what most
| distributed ledgers technologies offer. A blockchain is more
| analogous to the MySQL binlog than to MySQL itself. I would
| guess that Facebook's DB transaction log is orders of magnitude
| larger than all the blockchains in the world combined.
|
| * Facebook's challenges with MySQL are most likely due to their
| unprecedented scale. If one were to layer on the governance
| challenges associated with distributed ledger systems, I would
| think an upgrade like that would basically be impossible.
| atom_arranger wrote:
| Regarding scale:
|
| Bitcoin is a ledger of transactions, it has in the last 12
| years had 690m transactions.
|
| Facebook has 2.9B MAU. ~4X the number of transactions ever
| done on BTC.
|
| Each user probably generates tens of "transactions" (changes
| to a DB) per month.
| politician wrote:
| Just wait until you hear about FedNow...
| victor22 wrote:
| That's just traditional banking with extra steps...
| balozi wrote:
| Don't forget that there is still nothing backing the bank
| deposits themselves. So yes, extra steps, and extra risk. Which
| also means extra room from intermediaries and fees.
| makeitdouble wrote:
| Being able to convert back go standard money is a big deal.
| Currently all the digital offline payment means are a one way
| trip: you can pay for goods with them, but not exchange with
| someone or return it to your account. This initiative would
| solve that issue.
| m3kw9 wrote:
| I'm just confused about this. Isn't most money system digitized
| already? When we buy stuff online it is indistinguishable from
| digital money, and the bank as far as they are concerned is
| seeing numbers on a screen from a database, which is backed by
| fractional deposits.
| Kaytaro wrote:
| Yes, the only difference is this currency will be on a
| blockchain. Although I'm assuming it will be completely
| centralized so I'm not sure what benefits this will have over a
| traditional database.
| gogopuppygogo wrote:
| Gives government more ability to track flow of capital.
| Hugely awful move for the world to give government more
| control.
| mistrial9 wrote:
| Eliminate or substantially reduce third-party transaction
| guarantee fees, and at the same time, one-hundred percent of
| the transactions are digitally recorded.
|
| A preponderance of big finance relies on trusted third-
| parties to intermediate transactions. Those third parties
| charge non-negligible fees to execute each and every
| transaction. Large value transactions can be done between
| untrusting parties directly, due to rigid cryptographic
| signing of the transaction record.
| rlpb wrote:
| None of these features require a blockchain and can be done
| trivially by a central authority issuing append-only
| cryptographically signed ledger entries.
|
| > Large value transactions can be done between untrusting
| parties directly...
|
| What's the benefit of this when the bank has to accept a
| cleared record for a party to withdraw funds anyway?
| mistrial9 wrote:
| > None of these features require a blockchain and can be
| done trivially
|
| what _can_ be done and what _is_ done -- different. You
| might want to tell those companies that charge a fee to
| guarantee the transaction, that they can just trivially
| stop doing that now.
| rattlesnakedave wrote:
| >None of these features require a blockchain and can be
| done trivially by a central authority issuing append-only
| cryptographically signed ledger entries.
|
| Why would you want to depend on a central authority when
| you can have a network of trusted blockchain users all
| signing and broadcasting their transactions to each-other
| in real time, without an intermediary?
|
| Why hamstring yourself with a database and the
| upgradability woes therein, when you can use a
| blockchain?
|
| >What's the benefit of this when the bank has to accept a
| cleared record for a party to withdraw funds anyway?
|
| With a permissioned blockchain, the funds can be cleared
| much faster (instantly?) than in the current system.
|
| I left another comment about this. These technologies are
| very powerful and not thoroughly explored in a
| permissioned context for use by traditional finance.
| lottin wrote:
| Blockchains rely on intermediaries to process
| transactions. The difference is, in a blockchain-based
| system, the end user has no freedom at all to choose
| which intermediary they want to use. The intermediary is
| chosen at random, according to how much useless
| computations they have done. And because of these useless
| computations, the system is also less economically
| efficient, in other words more expensive, compared to
| alternatives.
| throwawaygh wrote:
| _> Why would you want to depend on a central authority
| when you can have a network of trusted blockchain users
| all signing and broadcasting their transactions to each-
| other in real time, without an intermediary?_
|
| The choice here is between:
|
| 1. A known intermediary with a physical address to which
| a judge/magistrate can have a summons mailed and which my
| local elected government officials can at least in
| principle regulate, or
|
| 2. An unknown number of unidentified intermediaries, at
| least some of whom are almost certainly beyond
| jurisdictional reach.
|
| If I'm fucking around with gambling money, whatever. If
| we're talking about national payment infrastructure, the
| choice is obvious.
|
| _> [databases and] upgradability woes therein, when you
| can use a blockchain_
|
| ...huh? I don 't understand.
| 3np wrote:
| I think you misunderstand. The answer is most likely
|
| 3. A consortium of permissioned parties. I'm assuming at
| least the 3 major banks and some if not all of the 70
| companies.
|
| This is similar to Diem (aka Facebook Libra). PoA (Proof-
| of-Authority) as opposed to PoW or PoS.
|
| The point is that the parties keep each other in check,
| and collectively have some level of fault tolerance. At
| the scale of a national economy, it's desirable to not
| have a single point of failure on an institutional level.
|
| If you think "Signed Git+Raft/Paxos", that's pretty
| close.
|
| I'm curious if they'll allow some level of unpermissioned
| access to the chain and/or for individuals to manage
| their own keys. The pessimist in my thinks no, but one
| can dream.
| throwawaygh wrote:
| I don't think this is what rattlesnakedave was
| describing.
| 3np wrote:
| It was. The key words are "trusted" and "permissioned".
|
| Cryptocurrency validators are untrusted and the networks
| are unpermissioned.
|
| Money on a blockchain isn't necessarily cryptocurrency.
| rlpb wrote:
| > Why would you want to depend on a central authority
| when you can have a network of trusted blockchain users
| all signing and broadcasting their transactions to each-
| other in real time, without an intermediary?
|
| You're already depending on a central authority to back
| your funds. So forcing a blockchain into the mix just
| introduces that additional complexity and risk, not a new
| dependency on a central authority.
|
| > Why hamstring yourself with a database and the
| upgradability woes therein, when you can use a
| blockchain?
|
| You're conflating "blockchain" with "distributed
| database". For example, a trivial example is a git
| repository storing ledger entries. It's distributed, can
| be used in an append-only fashion (and enforced at a
| higher layer), and such a system probably doesn't have
| the "upgradability woes" you're worried about. It's not a
| blockchain.
|
| > With a permissioned blockchain, the funds can be
| cleared much faster (instantly?) than in the current
| system.
|
| This can also be arranged without a blockchain.
| mistrial9 wrote:
| re-reading this now --
| https://stackoverflow.com/questions/46192377/why-is-git-
| not-...
| admax88qqq wrote:
| Japan is still very cash based.
| 323 wrote:
| When people say "digital money" they mean being able to for
| example move it from one account to another with a few lines of
| Python code, like you can with Bitcoin/Ethereum/Tether.
|
| You can't really do that with USD, you need an intermediary
| like Stripe, an attached bank account, ...
| cortesoft wrote:
| Yeah, but this new system will still have a middleman, the
| bank...
| 323 wrote:
| Not necessarily a middleman. The banks will back the
| digital coin, but might not be much involved in transfers
| (we'll see).
|
| A bit like physical cash, it is backed by the gov, but you
| don't need to involve the gov to transfer it.
| edgyquant wrote:
| I wonder if it would be ideal for a separate company, not
| the banks and not the government, to control the nodes to
| "mine" or whatever equivalent this currency has. Maybe it
| should just be the government since you would likely just
| end up with such a company beholden to the banks.
| rich_sasha wrote:
| Central bank digital money normally means normal bank account
| but held directly with the central bank
| makeitdouble wrote:
| When buying stuff online, either the credit card network
| temporarily foots the bill until the charge actually hits your
| bank, or your bank processes the transaction directly and money
| moves away by a bank to bank call. It needs to ne synchronous
| and connected.
|
| With this new system I'd assume you transfer ownership of your
| money but it doesn't need to have both banks connect directly,
| and there might be a chance to have it work offline as well.
| spullara wrote:
| So, debit cards?
| nomdep wrote:
| No, digital cash
| dgfitz wrote:
| As far as I'm concerned 99% of my money is already
| digital cash. Unless I go through the effort of taking
| cash out via ATM/bank or at a grocery story etc, all I
| ever see are numbers in a browser/app get bigger or
| smaller.
|
| How is this different? It precludes me from __ever__
| having a tangible form of currency?
| makeitdouble wrote:
| You are putting too much meaning on the "digital" (yes, I
| know, it's a name but).
|
| The point is not the digitalness but the decentralized
| part. One of the main participant in this system is
| railroads, and they already introduced a money equivalent
| offline system (Suica/Pasmo) that is wildly used in lieu
| of cash. As worded in the article they want to take it a
| step further and convert their "points" to actual legal
| tender.
| makeitdouble wrote:
| Debit cards ask your bank for your balance and request them
| to debit you. This system is decentralized (backed by banks
| but offline use is assumed)
| AlexanderDhoore wrote:
| HYPE-based debit cards!
| hinkley wrote:
| Just smile and back away slowly.
| Lazare wrote:
| Yes. In the US context, we already have a digital currency,
| they're called "US dollars".
|
| Something that gets floated periodically is the idea of
| creating a bank that only accepts deposits, and then sticks
| them in the Federal Reserve. This is sometimes called "narrow
| banking", and one of the more prominent efforts to do this
| involved a proposed bank called The Narrow Bank or TNB.
| (Alternatively, you could let individuals deposit money
| directly with the Fed.)
|
| If implemented, such accounts would be 100% backed. You have a
| dollar, you put it in the account, it sits there until you ask
| for it back.
|
| There's an article here:
| https://www.spglobal.com/marketintelligence/en/news-insights...
|
| As it noted, US regulators seem strongly opposed, at least for
| now.
| elif wrote:
| It would be more accurate to call it "visa dollars" as
| transactions are only possible at the discretion of visa and
| by paying visa a fee.
|
| A better example would be in new zealand they truly have
| digital "NZ dollars" because anyone can transfer them to
| anyone for no fee.
| [deleted]
| ne0flex wrote:
| Basically it means that you'll have a bank account directly
| with the government. They'll be able to monitor every
| transaction you make from that account and block transactions
| on your account.
|
| It'll also give the government the ability to add conditions to
| your money (ie. you need to spend X amount of yen / dollars
| this month or your money will expire and you'll lose it), or
| your money can only be spent at approved stores.
| narism wrote:
| >It'll also give the government the ability to add conditions
| to your money
|
| Some of China's experiments with digital RMB have already
| done this where the money they handed out had an expiration
| date. Japan as well with the GoToTravel/GoToEat stimulus
| campaigns where the money equivalent could only be used at
| certain hotels/restaurants.
| hogFeast wrote:
| This is specifically not what this is. Banks in Japan have a
| central role in the economy so the govt has no wish to remove
| the ability of banks to create money (they are also have a
| lot of political power). The digital currency will be backed
| by bank deposits, and the aim of this appears to be creating
| a interbank payments system that can run with lower costs.
| ac29 wrote:
| The article says this is being run by a group of banks and
| other businesses, not the government.
| cortesoft wrote:
| The government can do way worse than add conditions to your
| money. They can arrest you and put you in jail.
|
| They can already take all your money. They can take it no
| matter what form you put it n in.
| roywiggins wrote:
| Yes, one day India invalidated just about all their
| physical bills.
|
| https://www.bbc.com/news/world-asia-india-37974423
| threeseed wrote:
| This comment is the literal definition of FUD.
|
| The idea that a government or bank would expire your money is
| pretty hilarious.
| narism wrote:
| https://www.scmp.com/economy/china-
| economy/article/3116521/c...
|
| > winners have until January 17 to spend their e-yuan
| before it expires
|
| The caveat there is that expiration in this case is
| probably to encourage winners to spend the money/provide an
| end date to the experiment. Most likely regular e-money
| would not have that condition but special payments (ex:
| stimulus) could.
| tastyfreeze wrote:
| It doesnt take much searching to find that is an actual
| proposed use case.
|
| https://www.google.com/search?q=cbdc+expire
|
| It doesnt take much knowledge of history to know that
| giving government full control over individual's money is a
| very bad idea.
| roywiggins wrote:
| Governments already have control over money by simply
| being able to choose what is and isn't legal to use. FDR
| outlawed private gold ownership. India _banned cash_ :
|
| https://www.bbc.com/news/world-asia-india-37974423
| matthewdgreen wrote:
| Governments have imperfect control over money. Outlawing
| private gold ownership and banning cash are two examples
| that are noteworthy _because they were so extreme_. Each
| created a huge amount of controversy and havoc, and also
| required leaders to obtain buy-in from legislators and
| other political figures.
|
| The point of many CBDC electronic currencies is to reduce
| the barriers to this control, so restrictions on currency
| (such as expiring currency) can be implemented with a few
| keystrokes on a computer rather than, say, requiring
| everyone to turn in their cash and jewelry.
| threeseed wrote:
| No it's an idea and never concretely proposed.
|
| And governments already have full control over an
| individual's money.
| faichai wrote:
| I think this has already happened in China. They provided
| digital RMB as a stimulus that expired if you didn't use
| it. We're all Mario now.
| lottin wrote:
| I think this is fake news.
| sleepysysadmin wrote:
| This is related to yesterdays:
| https://news.ycombinator.com/item?id=29312300
|
| Japan is on the verge of economic collapse. Negative interest
| rates, major deflation during all of covid. Barely pulling out of
| deflation and trending back downwards.
|
| https://tradingeconomics.com/japan/inflation-cpi
|
| Japan is in deflationary spiral due to high taxes and tremendous
| debt. Deficit spending to temporarily pull themselves out of
| deflation and recession will only makes things worse in the long
| term.
| Psillisp wrote:
| This feels like the hallmarks of a system that over values
| 'hard work' but doesn't value entrepreneurship or risk taking.
|
| Corporate rent seeking is proper up by a strong welfare state.
|
| "Herein lies the unique twist that Piketty's theory takes on in
| Japan: the disparity is not so much between the super-rich and
| everyone else, but between large corporations, which can retain
| earnings and accumulate capital, and the individuals who are
| being squeezed in the process."
|
| https://www.weforum.org/agenda/2015/03/why-inequality-is-dif...
| jbay808 wrote:
| Is there some reason why a country experiencing deflation can't
| print money and hand it out to voters until inflation returns?
| ionwake wrote:
| I think the person you replied to got confused - Japan is
| experiencing a severe collapse and suffering from inflation
| in most asset classes.
| whytaka wrote:
| If they were giving it out unevenly it would be unjust.
|
| If they were giving it bout evenly, there'd be no difference.
| Nominally, the price of goods would increase but so would
| your reserve. So there'be no added incentive to buy.
| jbay808 wrote:
| Helicopter money is not like a stock split, because you
| aren't handing it out in proportion to how much money
| people already have. When prices go up it certainly creates
| an incentive to spend your savings, even if you're getting
| new money to offset the costs.
| DennisP wrote:
| In theory, they could. In practice, the typical way to "print
| money" is to do things like lower interest rates
| (incentivizing more borrowing, which increases the money in
| circulation) and lowering bank reserve requirements (letting
| them loan more in proportion to their reserves). Both depend
| on people voluntarily taking out loans, which they might
| avoid if they're pessimistic about the economy or expect
| deflation.
| jollybean wrote:
| Supply Side vs. Demand Side very different though.
|
| Poor people buying stuff they 'need' is different than
| coaxing businesses to invest more broadly with slightly
| cheaper loans but with the demographic decline still on
| their daily charts.
| starfallg wrote:
| Good summary but slightly out of date. What they rely on
| now is QE, with the central bank buying assets from banks
| to free up money for investment. Ends up similar to
| lowering reserve requirements, but without the drawbacks of
| lowering reserve requirements.
|
| Japan is dealing with it by massive infra projects like the
| new maglev Shinkansen. So when we are talking about loans,
| we aren't just talking about consumer credit, although that
| can be a major component in a consumption-led economy.
| jbay808 wrote:
| That's why I was wondering about _not_ doing that, and
| literally minting new cash and using handouts / UBI
| instead. We can't expect people to borrow money to spend on
| consumption, even at low interest rates, because they'll be
| worried about paying it back. No wonder they always just
| put it into asset purchases. Give them the money no strings
| attached and they'll spend it.
|
| Normally the downside to that is inflation, but since
| that's the goal anyway it seems like a win-win.
| DennisP wrote:
| Makes sense to me.
| seibelj wrote:
| Japan is a very rigid economy where doing things a
| bureaucratic, traditional way is prized and new innovations
| are difficult and slow. They have low immigration and
| culturally non-Japanese cannot assimilate fully. Their birth
| rate is low, they can't replace population with immigrants,
| and an ever increasing percentage of those who are alive are
| old, no longer productive / contributing to the economy, and
| spending money on end-of-life things in retirement.
|
| No matter how much money they print, it can't solve for an
| economy where there are fewer consumers and producers every
| year.
| jbay808 wrote:
| I think the Bank of Japan might be more innovative than you
| give them credit for, seeing as how they were the first to
| deploy almost all of today's unconventional policies,
| including QE itself.
|
| A low birth rate also is certainly not some immutable
| characteristic of Japanese culture; they had very high
| birth rates through most of the 20th century. It's clearly
| the result of economic circumstances and incentives, like
| the high cost of childcare and long working hours. These do
| seem like things that government and monetary policy cannot
| control directly but can certainly influence. In some
| respect the low birth rate might be both a cause of
| deflation itself and also a result.
|
| Lastly,
|
| > No matter how much money they print, it can't solve for
| an economy where there are fewer consumers and producers
| every year.
|
| It might not solve the economy, but speaking strictly of
| inflation, it doesn't seem imaginable that _no matter how
| much money they print_ it won 't create inflation. They
| must just be printing the wrong kind of money. (As this
| economist explains, there are indeed different kinds:
| https://youtu.be/4xgHbW2A9KE )
| sleepysysadmin wrote:
| >Is there some reason why a country experiencing deflation
| can't print money and hand it out to voters until inflation
| returns?
|
| That's a great question. Japan has been doing this for about
| a decade. Shinzo Abe kind of called it abenomics; aka
| quantative easing. https://en.wikipedia.org/wiki/Abenomics
|
| It has worked, no question, effectively exactly as you
| propose. The problem is that it clearly didn't solve the
| problem. While also creating new problems and since the
| original problem never gets solved, when you are forced to
| cut spending because the cost of debt has become too
| crippling. You retain all the new problems and now feel the
| old problems.
|
| https://tradingeconomics.com/japan/government-spending-to-
| gd...
|
| https://tradingeconomics.com/japan/government-debt-to-gdp
|
| 266% debt to gdp is about 24% higher than the peak drama
| about Greece's collapse.
|
| https://tradingeconomics.com/japan/government-budget
|
| Haven't balanced their budget since the 1990s.
|
| Tough decisions coming for Japan.
| jbay808 wrote:
| To be clear, I'm not talking about QE, but specifically
| minting of actual paper currency and just handing it out to
| every citizen. It seems like that should directly create as
| much inflation as you want, without creating any debt.
| starfallg wrote:
| The problem is that economists still require fiscal
| accountability for the government, which was a rule to
| mainly prevent runaway inflation. This is obviously
| counter-productive to what they want right now. There
| should be a policy framework to allow the central bank to
| just directly invest in the economy, no need for government
| to incur debt.
| NovemberWhiskey wrote:
| The big difference vs. Greece is that ~90% of all Japanese
| government bonds are held domestically.
| sleepysysadmin wrote:
| >The big difference vs. Greece is that ~90% of all
| Japanese government bonds are held domestically.
|
| Of which ~45% is held by the bank of japan itself.
|
| https://tradingeconomics.com/japan/central-bank-balance-
| shee...
|
| https://www.reuters.com/article/us-japan-economy-boj-
| idUSKCN...
|
| Japan is so bankrupt that nobody else will hold their not
| properly rated debt.
|
| Mind you, Japan's clearly bankrupt central bank cannot
| actually go bankrupt. There is no gold standard, there is
| no bank run, there is no liquidation requirements. So
| what? You just magically keep raising the imaginary
| numbers with no consequences?
|
| This is where OP happens.
|
| Flipside, I am curious about an alternative approach to
| fixing the issue like Greece did. Japan is headed toward
| a situation where their currency will be worthless and
| their people own nothing. Yes it will mean all retirees
| pretty much have to go get a job but the federal gov will
| effectively take ownership over most land. People who
| actually own their homes will effectively become fiefs.
|
| I bet bitcoin and similar coins is beyond popular in
| Japan right now.
| hogFeast wrote:
| They also have substantial foreign assets that can be
| sold. The situation in Japan is very unusual because the
| financial system has a massive synthetic net short JPY
| position. Because rates are so low, savings have been
| effectively dollarized in an economy that isn't
| dollarized (this is why USD/JPY is so correlated with
| rate differentials)...so I don't think anyone really
| knows how this will works out (there aren't a lot of
| historical examples, no country that held so many claims
| denominated in a foreign currency has been such a large
| part of the world economy...this is the end game of the
| export-oriented, mercantilist political economy...Germany
| is a ways down the same road).
|
| It makes no difference whatsoever that JGBs are held
| domestically in practice because it is harder to push
| through a debt restructuring politically when voters are
| the ones losing money (you have seen this in Italy too,
| they have "bailed in" domestic savers which has
| significantly reduced their options...if the debt is
| owned by foreign investors, you can usually restructure
| and point at them: look at these greedy capitalists,
| terrible...but we have no choice).
|
| On some of the other stuff mentioned above, the reason
| why Japan is in such a mess is because their
| financial/corporate sectors is totally screwed. There is
| no real demand for money, corporate balance sheets are
| loaded down with cash, no-one wants to invest, demand for
| money is so low that Japan's savings banks are huge
| players in US corporate lending, banks seem to have no
| actual capacity to make corporate loans...they don't know
| how, they just buy US bonds and call it a day, monetary
| policy (counter-intuitively) is making this worse, it is
| reducing the supply of "safe assets" but hasn't increased
| the capacity of institutions for "non-safe assets", it
| has led to a significant reduction in lending within
| Japan because rates overseas are so much higher...it is a
| real shit storm, but it all comes down to monetary policy
| officials not understanding money transmission (unusually
| for Japan, in the 1980s the govt was involved in
| directing lending on a loan-by-loan basis so they have a
| history of real control over monetary transmission).
| roywiggins wrote:
| I dunno, they've been stumbling through deflation for 30 years
| now, why not expect them to keep muddling through?
|
| https://en.m.wikipedia.org/wiki/Lost_Decades
| [deleted]
| Ericson2314 wrote:
| https://www.reuters.com/business/finance/consortium-japan-fi...
| this one doesn't mention blockchain. Which gives me hope.
|
| The cozy relationship between the state and the big corps gives
| me worry, but ideally:
|
| 1. Giving everyone a central bank account makes issuing a UBI
| really easy. That would be great for Japan to boost domestic
| consumption, and get those hikikomoris some non-shit non-
| saleryman jobs.
|
| 2. If this does eventually displace cash, they can also try out
| fun things like https://en.wikipedia.org/wiki/Demurrage which
| would really counteract deflation in all the right ways but none
| of the wrong ways.
|
| Ultimately, per stuff like
| https://yalebooks.yale.edu/book/9780300244175/trade-wars-are...
| the world really needs the big exporter countries to consume
| more. The world we live in of large trade imbalances is not
| healthy for the US or the big exporters alike.
|
| I don't think the US has the political will to overcome it's
| oligarchs and stop the imports, plus the poorer countries that
| don't even export a lot still greatly depend on our trade deficit
| to be able to get USD reserves. It is better the big exporters
| stop "importing our demand" so much, and focus more on domestic
| consumption (and at least China has stated they want to do this).
| That will put the pressure on the US from the outside to side-
| step our failed-state politics.
| howmayiannoyyou wrote:
| > makes issuing a UBI really easy
|
| Query: Who produces the goods & services that create value in a
| country/society when everyone is collecting UBI? Is it just the
| people who 'enjoy' working? And, when UBI causes baseline
| consumable prices to rise, we just keep raising UBI, right? Can
| we just call it for what it really is... communism? Why keep
| pretending?
| ljm wrote:
| Communism would imply a lot more than providing a base income
| to everyone to keep them out of abject poverty. You might be
| thinking of socialist democracy which maintains a balance
| between unfettered capitalism and full-blown communism.
|
| In the UK you get about 10k personal allowance before you
| have to start paying tax. That is one form of UBI although it
| requires you to earn an income (and you actually start to
| lose this allowance once you start earning over 100k). You
| could replace that all the same with a system that dumps 10k
| into your account every year and then starts taxing you for
| every penny earned (at a higher rate).
|
| We have had the past 100-or-so years to learn, empirically,
| that both unfettered capitalism and full-blown communism are
| not particularly good ways to maintain a healthy society.
| Ericson2314 wrote:
| > Who produces the goods & services that create value in a
| country/society when everyone is collecting UBI?
|
| The people collecting UBI, duh. The events of the past 2
| years have convinced me that even a small UBI can still have
| a large effect.
|
| > And, when UBI causes baseline consumable prices to rise, we
| just keep raising UBI, right?
|
| Don't be an idiot. "pure inflation" is multiplicative,
| scaling all prices the same. UBI is additive providing a
| base-line income stream. The interaction will be very
| complex.
|
| UBI can be paired with simple-stupid regressive taxes like
| VAT and still come out net-progressive.
|
| There will be some adjustments in prices but a new
| equilibrium absolutely can be reached.
|
| > Can we just call it for what it really is... communism? Why
| keep pretending?
|
| The idea is that "the first x dollars of consumption are
| socialism, the rest capitalism". It is not 100% socialism,
| don't be an idiot.
|
| It is only bad if you believe society depends on sticks and
| workers will not work for mostly carrots. Is that what you
| believe?
| qq4 wrote:
| > The events of the past 2 years have convinced me that
| even a small UBI can still have a large effect
|
| Can you expand on this. What events have convinced you?
| Fwiw I'm trying not to be an idiot ;)
| [deleted]
| [deleted]
| Ericson2314 wrote:
| Oh I thought this thing involved _the_ Bank of Japan, but
| evidently it is all private sector. Arg nevermined. Hopefully
| the Bank of Japan does indeed continue with it 's exploratory
| plans, though.
| uses wrote:
| So, do I understand correctly that these are the main benefits of
| a CBDC? - A centralized ledger which is
| maintained by the central bank in question. - Instant
| payment clearing - no ACH or other steps. You simply request a
| transaction and it happens immediately if it's possible.
| - No fees - presumably you can send large amounts without paying
| for a wire transfer. - Convertible into "regular money"
| with no fees or intermediaries. You can exchange this currency
| for traditional deposits at a regular bank, and vice-versa.
| - Easy transactions with the government. You can pay your taxes,
| or get paid (stimulus payments, paychecks, for example),
| instantly. - From the central bank / policymaker
| perspective, there are many benefits because of the gigantic
| amount of data they gain access to.
|
| Would this be essentially like Fedwire, but for everyone rather
| than a special service for banks?
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