Posted on 06/24/2017 5:54:35 AM PDT by MarchonDC09122009
https://www.technologyreview.com/s/608088/chinas-central-bank-has-begun-cautiously-testing-a-digital-currency/?set=608153
China’s Central Bank Has Begun Cautiously Testing a Digital Currency -
MIT Technology Review
The People’s Bank of China has developed a digital currency that’s designed to scale to the number of transactions made every day across the country.
by Will Knight June 23, 2017
China’s central bank is testing a prototype digital currency with mock transactions between it and some of the country’s commercial banks.
Speeches and research papers from officials at the People's Bank of China show that the bank’s strategy is to introduce the digital currency alongside China’s renminbi. But there is currently no timetable for this, and the bank seems to be proceeding cautiously.
Nonetheless the test is a significant step. It shows that China is seriously exploring the technical, logistical, and economic challenges involved in deploying digital money, something that could ultimately have broad implications for its economy and for the global financial system.
A digital fiat currency—one backed by the central bank and with the same legal status as a banknote—would lower the cost of financial transactions, thereby helping to make financial services more widely available. This could be especially significant in China, where millions of people still lack access to conventional banks. A digital currency should also be cheaper to operate, and ought to reduce fraud and counterfeiting.
Even more significantly, a digital currency would give the Chinese government greater oversight of digital transactions, which are already booming. And by making transactions more traceable, this could also help reduce corruption, which is a key government priority. Such a currency could even offer real-time economic insights, which would be enormously valuable to policymakers. And finally, it might facilitate cross-border transactions, as well as the use of the renminbi outside of China because the currency would be so easy to obtain.
Private digital currencies, also known as cryptocurrencies, have shot to prominence in recent years following a wave of excitement, investment, and speculation focused on Bitcoin, a distributed, cryptographically secured form of money invented by an anonymous individual or group in 2008 (see “What Bitcoin Is, and Why It Matters”). Bitcoin’s distributed ledger of transactions, known as a blockchain, makes it possible for it to operate without any central authority.
China is not the only country interested in overhauling its currency. This year India eliminated some banknotes in an effort to reduce tax evasion and illegal income. And while some other central banks, including the Bank of England, the Bank of Canada, Deutsche Bundesbank, and the Monetary Authority of Singapore, are studying digital fiat currencies, China’s test appears to be the first of its kind anywhere in the world.
One of the main concerns voiced by other central banks looking at digital fiat currencies is that they could undermine the commercial banking system by making it possible for anyone to have an account with the central bank.
China’s digital currency is designed to avoid this problem. In a paper published in Tsinghua Financial Review, an academic journal, and posted online recently, Yao Qian, deputy director of the Technology Department of the People’s Bank of China, wrote that a digital currency could be integrated into the existing banking system, with commercial banks operating digital wallets for the central bank’s currency.
And while other countries have proposed following Bitcoin’s architecture and many of the largest banks in the world are experimenting with it, the currency developed by the People’s Bank of China is also different in design.
Yao writes that the currency would only use a distributed ledger in a limited way. A blockchain might not be used to process transactions, as this could prove an insurmountable bottleneck for a currency with such a huge transaction volume as the renminbi. But such a distributed ledger might be used to periodically check who owns what. “The ownership of digital currency can be verified directly by the issuing bank, so as to realize peer-to-peer cash transaction[s],” Yao writes.
Officials from the People’s Bank of China declined to provide any official comment on the development of the digital currency or plans for its use.
There may be good reason to proceed slowly. For all the excitement over digital currencies, Bitcoin is experiencing technical problems as it grows more popular, and the community of developers behind the currency is beset by infighting over its future direction. Bitcoin’s value has also oscillated wildly in recent years (as of writing, the value of a bitcoin is $2,662, more than double its value in March). A number of other cryptocurrencies have emerged, and blockchain technology is being explored as a way to track all sorts of different things.
Still, a less decentralized currency under the control of the central bank has significant appeal. “In a place like China, they may see an opportunity to catch up with other countries; to adopt new technology; and maybe even overtake people,” says Simon Johnson, a professor at MIT's Sloan School of Management who studies monetary innovation and who previously served as the chief economist for the International Monetary Fund.
Johnson notes that China is already at the vanguard of experimentation in mobile payments and digital money, which has driven economic growth. “There’s a lot of innovation in the private sector with things like Alipay,” he says. “And China is also the biggest user of Bitcoin, as far as we can determine.”
Johnson adds that China may be the right place for an official digital currency to take off. “There’s this confluence of being at the front of the technology, getting some advantages for their payments system, and developing some jobs,” he says.
Chinese government greater oversight of digital transactions,what could go wrong democrats have new idea..
Predicted in 1988 that world would adopt a one world currency by 2018...
Title of article: Get Ready for the Phoenix Source: Economist; 01/9/88, Vol. 306, pp 9-10
From the article:
“THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.
At the beginning of 1988 this appears an outlandish prediction. Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987.”
http://www.economist.com/node/166471
“One world, one money
A global currency is not a new idea, but it may soon get a new lease of life
Sep 24th 1998
IN DIFFICULT times, people are allowed, even encouraged, to think the unthinkable. Some of the economists who propose capital controls as a remedy for recession in Asia claim to be doing this—but they are flattering themselves. Unthinkable? Malaysia just did it. Dozens of countries still use capital-account restrictions. And it is a cliché of the orthodox “sequencing” literature that a variety of such controls should be retained until other reforms are complete. Really, to think the unthinkable, you have to be bolder than this.
So here is an idea: global currency union. Let nobody call it boringly feasible, or politically expedient. Yet, like all the best unthinkable ideas, it has more going for it than you might think—in principle, at least. The idea is not new. Richard Cooper of Harvard University proposed a single world currency in Foreign Affairs in 1984, and he was not the first to think of it. It seemed an outlandish idea, and still does. But much has happened lately to make it worth a moment’s thought.”
http://www.alt-market.com/articles/2403-the-economic-end-game-explained
MarchonDC09122009: UN & Tech companies push Universal ID for entire world’s population...
ID2020 Summit Spotlights Technology and Digital Identity at the United Nations
Panelists include world-renowned humanitarians and leading members of technology and blockchain communities
June 19, 2017 07:20 AM Eastern Daylight Time
NEW YORK—(BUSINESS WIRE)—ID2020, a public-private partnership dedicated to giving one-sixth of the world’s population access to an officially recognized identity, today convenes the 2017 “Platform for Change” Summit at the United Nations. Without identity, approximately 1.1 billion people – disproportionately women, children and the world’s most vulnerable – struggle to access critical services and social benefits.
“We are very proud to be a Founding Partner of the ID2020 Alliance and to support today’s summit. Working together, we can achieve the ID2020 mission to bring a safe, verifiable and persistent digital identification system to scale.”
Tweet this
ID2020, which supports the UN’s Sustainable Development Goal 16.9 to enable an officially recognized identity for all, is focused on an open, human-centric approach to identity, one that draws on recent advances in biometrics and innovative technologies. As Dakota Gruener, Executive Director of ID2020, has said: “Imagine being unable to enroll in school, vote, or open a bank or cell-phone account. Paper-based credentials can be lost or destroyed, and are fundamentally controlled by the issuing institution. In contrast, digital identity places control in the hands of the individual. This approach enables both significant improvements in the quality of life for more than a billion individuals and efficiencies for the governments, NGOs and businesses serving them.
Today’s convening of the second ID2020 Summit hosts experts from government, private enterprise, and innovative technology companies, who are collaborating to provide digital identity solutions for the global population. The event launches the ID2020 Alliance, bringing together these stakeholders on an ongoing basis with commitments of funding and technical resources, implementation of pilot projects, and collaborative standards development. The ID2020 Alliance approach is supported by a grant from The Rockefeller Foundation and major financial support from Accenture (NYSE:ACN), which will be announced at the Summit.
The event encourages stakeholder participation and expert discussions on the possibilities of applying innovative funding models, advanced technologies, and public-private partnerships to help solve this global challenge. Featured panels with some of the most innovative thinkers in the technology and humanitarian space will include keynote addresses from senior staff at key UN agencies and organizations like PwC, Microsoft, Accenture, Gavi, the Vaccine Alliance, and The Rockefeller Foundation.
But, but everyone says Bitcoin is a ponzi scheme!
Sheesh.
It figures that a communist country would want digital currency.
This is going to be hilarious. Digital currency is such an incredibly stupid idea that only utter fools embrace it.
Rick and Morty, Season 3, episode 1 stupid.
RE: “This is going to be hilarious. Digital currency is such an incredibly stupid idea that only utter fools embrace it.”
Right....Fossil -
Two Faces to a Cashless Future | ABA Banking Journal
bankingjournal.aba.com/2017/04/two-faces-to-a-cashless-future/ Proxy Highlight
Apr 13, 2017 ... Narayana Kocherlakota, no less than the former president of the Federal Reserve Bank of Minneapolis and currently an economist at the ...
President’s Message: The Cashless Society and the Federal Reserve
https://www.stlouisfed.org/publications/regional-econ... Proxy Highlight
The story in the June 23 USA Today was startling: An East Coast furniture chain would no longer accept cash from its customers. The chain adopted the no-cash ...
Link not there
As far as “digital currency” is concerned, aren’t we already well down that road?
Is there “cash” in your bank account, or do you have funds in your account because computer systems say you do?
How many of you get a paycheck? or do you get a slip of paper telling you that money has been deposited in your bank account by your boss; that it has been electronically transferred?
When you use a debit card, funds are electronically transferred from your account to the account of the seller of whatever you are buying with that debit card.
When economists talk of the “money supply”, the vast majority of the “cash” on hand is simply the sum total of all of the numerous electronic transactions which occur everyday.
The vast majority of “cash” is not consisting of actual paper money and coins.
So if we already track the vast majority of financial transactions electronically, aren’t we already heading down the road to a fully digital currency????
I also meant to mention, that we abandoned the gold standard long ago, so whatever currency or cash we have, is not backed by precious metals, or any other tangible asset any longer. Which is also part of the mix regarding the valuation of money. I wonder if any country any longer has their money backed by precious metals????
>>So here is an idea: global currency union.
So here is an idea: OPEC.
Got Petrodollar?
Hackers are pleased with this.
“Even more significantly, a digital currency would give the Chinese government greater oversight of digital transactions”
This is the opposite of cryptocurrencies which maintains anonymity. This exposes even the tiniest transaction to the state. It’s to do exactly the opposite of bitcoin.
Why Digital Money Hasn’t Killed Cash
http://www.newyorker.com/business/currency/why-digital-money-hasnt-killed-cash
But this article is only the tip of the iceberg. Let’s cut to the visceral chase. If Hillary was POTUS, with a Democrat congress, would you be more inclined to trust her with the security of your money, or cash?
Digital money is incredibly easy to abuse by government. They can use it to set prices, wages, inflation and deflation. And nothing constrains them from doing so honestly.
Right now, millions of Americans live and work in the grey economy, where cash is king. Many even reject ID cards and are deeply distrustful of government of all kinds. So they work for cash, and if they can’t buy it with cash, then they don’t buy it. Importantly, many of those they deal with do use virtual money, so vital transactions are made by them, but still on a cash basis with their “blank” friend.
As noted in the article, even in “cashless” Sweden, cash is still plentiful. And the reason for this is found in basic economics.
“Anything desirable and in abundance can be used as currency.” Which is why socialists crave to control and ration everything, and if it is in abundance, to create shortage.
But what gives it teeth is Gresham’s law. In a contest between virtual money and cash, cash will always win, because it will be what people hoard. So it will increase in value, whereas virtual money will lose value, because that is what people will spend.
Why hoard electrons on someone else’s computer?
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