Without the Internet - intriguing? I hope that means it's energy efficient too?
What are the advantages?
Unlike China's hugely popular Alipay and WeChat Pay, transactions using the digital RMB can be done without the internet. It also won't require a bank account to access funds, so it will be of great benefit to the 20 percent of adults in China without bank accounts. This is a big step in helping poverty alleviation.
The digital RMB will help prevent illegal activities, such as money laundering, counterfeiting, illegal financing and tax evasion. Blockchain technology makes this possible.
It allows real-time collection of data related to money creation and bookkeeping, and provides a useful reference for the implementation of monetary policies. This can improve economic planning because accurate economic information is quickly available.
Why is China moving to digital RMB?
23 comments:
Because idolatry requires the next iteration of the Golden Calf.
Nope, though no doubt some hypocritical "Christian" bankers will portray it as "666."
Instead it will allow the Chinese to use their Nation's fiat in convenient, inherently risk-free account form and is a requirement to eventually completely de-privileging private depository institutions, currently a cartel of government-privileged usurers.
It's a Gold Standard that's idolatry since Christ clearly said that Caesar's money was to be used to pay Caesar's taxes, not what the fiat was to be made of; 800 years of the use of Tally Sticks prove that anti-counterfeiting measures are the key issue.
This isn't to say that private depository institutions or physical fiat, aka "cash", be eliminated since privacy concerns and emergency use are important considerations - not to mention the desire for interest that an at-risk account at a 100% private bank with 100% voluntary depositors may properly pay.
We have convenient, secure electronic accounts which don't require blockchain technology.
We have convenient, secure payment options, which don't require cash.
We have everything we need to implement your policies, Andrew.
The application of blockchain is an infantile disorder of our species.
We actually waste energy to compute these currencies, as if we were extracting precious metals from dirt.
Where is Moses to put an end to this nonsense?
This is exactly how to use the blockchain technology seems to me. The reason Bitcoin fails as a true replacement for sovereign currencies is that you can’t transact in it at the pace necessary to meet the needs of the world. Bitcoin can do only 10 transactions per second compared to VISA which does over 50,000 per second! This is why Bitcoin is primarily used to purchase contraband and engage in currency speculation. at this point. The energy requirements of those 10 transactions is 35x more than VISA uses for its transactions......try doing even 10,000 per minute. Blockchain just doesn’t offer what is promised by its promoters. The supposed distributed ledger advantage is the elimination of third party oversight. Supposedly it eliminates the need for a rule enforcer, which can be corrupted, and replaces it with a distributed network that enforces the rules and eliminates politics. If we have learned anything from the last 4 years it’s that rule enforcement matters but rule MAKING matters more. The rules regarding Bitcoin have changed multiple times ....... and it wasn’t done by canvassing every single Bitcoin owner. Bitcoin fails on the “no politics” front and it fails on useful for necessary transactions
Using distributed ledger technology to create the currency while using phones etc to actually process the payments and have a govt that accepts tax payments in that currency seems to me to be the perfect solution. The currency has no risk of going to zero (like Bitcoin will one day) since the CCP levies taxes and accepts them in said currency.
China is playing “Chess” and the US is playing “Shoots (or Shouts if you prefer)and Madders”
We actually waste energy to compute these currencies, as if we were extracting precious metals from dirt. Peter Pan
Ooops! My bad. I totally missed your excellent point since it did not occur to me (much) that a monetary sovereign would be so stupid as to use block-chain technology AND I have not read the article itself but relied on the summary.
My apologies ...
Where is Moses to put an end to this nonsense? Peter Pan
May God send one.
Greg,
I can't find the article the link purports to point too so I'll ask you:
Why in the heck is energy wasteful block-chain technology need for a monetary sovereign? Just give everyone a debit account at the Central Bank and you're done, seems to me.
The energy usage from Bitcoin is due to the “rules” about mining it. All the “work” that is done can be changed. It’s not necessary to mine a digital currency in the fashion that Bitcoin chose so the amount of energy can be greatly reduced I imagine.
I think the advantages might be greatly reducing the number of CBs. No need to have guys sit around and debate where to put interest rates, how much to spend etc Pick a set of rules that creates the necessary amount of currency, bases on inputs from multiple sectors, err on the high side always and let er rip.
I’m obviously guessing here but it’s clear that China is not using a blockchain payments system but they are using a blockchain system to act as the mint.
Do you think the FRS is still run by Bob Cratchit sitting at the counting house desk?
A big difference is that the Chinese govt isn’t trying to make their money something that inherently has value in $ terms or £ terms. Bitcoin is creating a savings vehicle primarily while China is creating a spending vehicle.
AA
This is one of the better articles on Bitcoin I’ve seen, especially the two links at end
https://clintballinger.edublogs.org/2017/12/27/bitcoins-and-balance-sheets/
Greg,
Thanks but just this title says it all:
Ten years in, nobody has come up with a use for blockchain
As for minting fiat, only the monetary sovereign should do so (and its Central Bank if it does so in a manner that does not violate equal protection under the law, e.g. an equal Citizen's Dividend).
AA
I’ll simply posit that while blockchain may not be the easiest solution to their problem it may be the best due to a variety of factors we aren’t aware of that has to do with their internal politics. I have heard that Chinese do have an affinity for gold, how much of that is due to distrust of monetary authorities I can’t say but maybe the blockchain is simply a way of being more, or at least appearing more, transparent about their monetary policy. In any event I think it’s safe to say they aren’t trying to compete with Bitcoin they are simply trying to modernize and democratize their sovereign monetary system.
I just don't see how people can create their own fiat without violating equal protection under the law.
But hey, for a long time the US allowed people to bring their precious metals to a US mint and have them converted to fiat coins so there's certainly precedence.
It's a seductive argument that government should not be in the fiat creation business but dead wrong. Instead, government should create fiat but in an ethical manner and ALL citizens (at least) should be allowed to use it on equal or better footing than private depository institutions.
The advantage of blockchain is efficiency and transparency. The Chinese government is interested in promoting both.
Efficiency is a no-brainer economically and financially. China is a huge country and efficiency is a big issue there.
Transparency is a good with many advantages for China as a developing country whose government is criticized for lack of transparency. China also views it as a step toward greater acceptance of the RMB in the global economy and financial system.
Blockchain is also useful in avoiding settlement issues and sanctions that the US is now imposing in its hybrid warfare.
So it is a pretty logical step to take.
Well I think you’d have to see the rules concerning creation. That’s the only thing that matters. Obviously it’s not fully at the discretion of the user, It seems to me it’s very close to a citizens dividend though.
Blockchain is also useful in avoiding settlement issues and sanctions that the US is now imposing in its hybrid warfare. Tom
All China has to do in that case is to allow EVERYONE, not just citizens, to have debit accounts at its Central Bank accessible from the Internet just as blockchain would be.
As for transparency, China's Central Bank should be forbidden from creating fiat except for the general welfare. That should make for a very simple balance sheet.
Here's a link to the article that works for me Why is China moving to digital RMB? - CGTN
Greg,
I see nothing in the article that implies that fiat creation would be done by anyone but government or its Central Bank. So that's one perplexing mystery solved.
No reason for a sovereign government to adopt this wasteful approach.
What exactly is it wasting? As long as it’s not using something like the Bitcoin algorithm,which requires a lot of computer work, I’m not sure what it’s wasting. AFAIK
there are many choices regarding the algorithm one uses to create the blocks of information and they all don’t necessarily use a lot of energy.
I agree that it might be wasting time but c’mon when it comes to govts and CBs making spending decisions I do not see that as a problem at all
It’s not like the extra time used is going to prevent them from doing other important things
Actually, the way China plans to use it, block chain could save the time and energy of reconstructing payment flows using RMB from traditional account statements at the Central Bank.
But it is wasteful that it would wish to track EVERY RMB - not to mention near totalitarian too. In the US, a court order is necessary to view bank accounts, I would hope.
US would like to track every dollar too, don’t kid yourself. Not hard to get that court order
I actually don’t give two shits if they track every dollar of my spending, I got nuthin to hide
If you don't require decentralization, blockchain isn't needed.
The current system is software based, requiring a bit of encryption, and authentication by the parties to the transaction. The framework in terms of computing and communication was established in the mid 80s. I'm old enough to remember when the bank teller would fill in your passbook by hand.
The digital currency fad is a solution for a problem that doesn't exist.
Tax cheats and drug kingpins may want it, but a government?
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