Wednesday, January 13, 2021

Alex Axelrod - How National Digital Currencies Will Change Our Lives

 Could it seriously reduce organised crime? 

When we pay for any product or service, an average of 1 to 5% of the money goes to payment systems as an acquiring commission. Cryptocurrencies - like QR codes - allow the buyer to pay the seller directly, which means eliminating the intermediary - like, Visa or MasterCard - and which will make goods and services cheaper. Already, there are marketplaces where users can directly pay with various cryptocurrencies.

Of course, payments using the state digital currency will not be free, but commissions will be significantly reduced. Their amount will be assigned by the issuer of a centralized digital currency, that is, by the state, and not by international corporations seeking to maximize profits at all costs.

Who will control whom

Digital currency is not only money in the usual sense, but also a technology that is ideal for providing the state with financial resources. To put it simply, the introduction of a state digital currency can increase and simplify tax collection up to 100%. In parallel, of course, the state will receive a large amount of data about its citizens and their finances, for which centralized crypto technologies are often scolded. However, the transparency that the blockchain provides also works in the opposite direction.

Cryptocurrency technologies allow you to control not only citizens, but also the state, allowing you to track where each budgeted ruble, dollar or yuan has been spent. For example, did all the allocated $16 billion really go to fight the coronavirus in China, or did part of it go astray, landing instead in completely different accounts? Using digital currency, targeted social assistance will also become truly targeted, and commercial banks and payment systems will not be able to receive their percentage from such payments.


How National Digital Currencies Will Change Our Lives


Andrew Anderson said...

Could it seriously reduce organised crime?

Yes, especially the government-privileged private-credit-for-usury cartel by eliminating their exclusive use of the Nation's fiat in account form - thereby allowing the elimination of all their other privileges such as deposit guarantees.

As for privacy, do private bank accounts provide that now? Besides, physical fiat (coins and Central Bank Notes) could still exist - especially if means (e.g. date stamps) are provided to enable negative interest to be levied* on it.

*Since fiat is a public utility, it is proper that fees be levied on large or extraordinary users of it.

Ahmed Fares said...

Andrew writes: "*Since fiat is a public utility, it is proper that fees be levied on large or extraordinary users of it."

Said users would then pass the cost along to consumers.

Andrew Anderson said...

Said users would then pass the cost along to consumers. Ahmed Fares

Some might attempt to do so but their wiser competitors would instead invest their fiat rather than hoard it.

As for banks, their attempts to pass on negative interest and other fees would simply drive citizens to their accounts at the Central Bank - accounts that would be FOR FREE* up to reasonable limits on account size and transaction rates.

*Per the natural right of citizens to use their Nation's fiat without charge up to reasonable limits.