Do you really believe we live in a democracy?
Or do you just point to other places that are perceived as worse?
It’s all relative they say.
Do YOU want to retain your right to use cash and digital without being forced to abandon the former?
In a democracy YOU would have that choice. In our society a Plutocracy, a small group of powerful people decide that for us with their interests as paramount.
Let us take a look at the debate being had.
What are the benefits of cash?
- It ensures your freedom and autonomy. …
- It’s legal tender. …
- It ensures your privacy. …
- It’s inclusive. …
- It helps you keep track of your expenses. …
- It’s fast. …
- It’s secure. …
- It’s a store of value
Advantages and disadvantages of a cashless society:
Benefits
- Lower crime rates, because there’s no tangible money to steal
- Less money laundering, because there’s always a digital paper trail
- Less time and cost associated with handling, storing, and depositing paper money
- Easier currency exchange while traveling internationally
Disadvantages
- Exposes your personal information to a possible data breach
- If hackers drain your bank account, or you experience technical issues, you’ll have no alternative source of money.
- Those with no knowledge, bank accounts, or mobile phones will struggle to keep up with evolving cashless technology.
- Some may find it harder to control spending when they don’t see physical cash leaving their hands
This information in a democracy would enable US to choose.
However, the Conservative government have other plans. They are planning to create a Central Bank Digital Currency.
What is central bank digital currency?
Central bank digital currency (CBDC) is money that a central bank, like the Bank of England, can produce. It’s called digital (or electronic) because it isn’t physical money like notes and coins. It is in the form of an amount on a computer or similar device.
They are looking closely at whether they should introduce a central bank digital currency in the UK and how it might work if they did. People sometimes describe this possible UK digital currency as ‘digital sterling’ or ‘Britcoin’. They have not made a decision to introduce one, so it hasn’t got a name, but a CBDC is not a cryptocurrency like Bitcoin.
How is it different to cryptocurrency?
A CBDC is different from cryptocurrency (also known as cryptoassets). Cryptocurrencies are not issued by a central bank. These privately issued digital currencies include Bitcoin, Ether (Ethereum) and XRP.
The value of a cryptoasset can move up and down very quickly. They are a risky investment and anyone buying them should be prepared to lose all their money.
If they produced a UK central bank digital currency, that argue that would not happen. Their currency would be reliable and retain its value over time they say.
How might a UK central bank digital currency work?
They already produce digital currency for banks and some other financial institutions to use (these are known as reserves). But they could produce a digital currency that everyone could use.
If they issued a UK digital currency, it would be in denominations of pounds sterling. For example, £10 of a UK digital currency would always be worth the same as a £10 note.
We would be able to use it to pay for things digitally we are being told. For example, we could transfer an amount of it to make a payment to someone.
CBDC is sometimes thought of as equivalent to a digital banknote, although in some respects it may have as much in common with a bank deposit.
Any UK CBDC would work alongside – not replace – cash and bank deposits. They will continue to provide cash for as long as the public still want it they say.
Why is the Bank of England considering a CBDC?
They are considering a central bank digital currency (CBDC) because the way people are choosing to pay for things is changing.
Financial technology (fintech) firms have started to offer new forms of money and new ways to pay. People are using cash less. These changes mean new opportunities and risks that they argue need to be planned for.
They have always looked for new ways to improve our money and payment services they state. For example, they now use polymer notes because they are harder to counterfeit than paper ones and they last longer. And they are using the latest technology to rebuild the payment infrastructure that they offer to banks and other institutions.
It is now time to look further ahead they argue. They are examining the possibility of a CBDC for the UK (alongside our physical notes) so they can make sure we are ready for the future.
Will the Bank of England introduce a CBDC?
They say they are looking carefully at the case for a digital currency for the UK. But they haven’t decided yet whether to introduce one or not. They are looking at what it might mean if we did and how it could work in practice.
Together with HM Treasury (HMT) they intend set up a Central Bank Digital Currency Taskforce to oversee this work. They are also working closely with other public authorities.
In June 2021, they set out their thinking on the possible opportunities and risks it could bring in their discussion paper on new forms of digital money.
In November 2021, together with HMT, they set out the next steps for a UK CBDC.
These next steps include a consultation in 2022 to help them assess the case for a UK CBDC. It will also look at the merits of doing more work to develop an operational and technology model for one.
Who is the Bank of England engaging with on CBDC?
They are speaking to businesses and communities to find out what impact a CBDC would have on them. Have you been contacted?
They are also working with international partners and organisations. For example they are working with the Bank for International Settlements. And they are working with finance ministries and central banks in other countries.
In March 2020, they published a discussion paper on CBDC. This outlined one possible approach to the design of a central bank digital currency. They sought feedback from the payments industry, academics, and other interested parties.
We can read a summary of the responses to the 2020 discussion paper. They published the responses in July 2021 and produced a webinar based on them.
All of this under our noses but the vast majority are partially or totally oblivious. Why is that?
Our rights and freedoms are being removed and only we can prevent it.
James Finlayson
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