There is one final, geopolitical reason behind China's decision to give its digital currency an expiration date [see Silvio Gesell]: as Byrne Hobart writes, "programmable money, tied to real-world identities, and universally tracked by a central bank, starts to look suspiciously like a substitute for the consumer of last resort. Every year that China gets richer, domestic consumption plays a bigger role (exports were 26% of China's GDP in 2010, and 18% last year). If domestic consumption can be tightly controlled, then it's a way to not just increase the volume of consumption but to control the variance of demand for the goods China produces [inflation control]. It's not yet enough to match the size and variability of global demand for China's exports, but every year it gets closer."….
China's Digital Yuan Comes With An Expiration Date
Tyler Durden
5 comments:
Taxation by another name?
Not taxation but "Use or lose".
That said, individual citizens should be able to save risk-free to a reasonable account limit.
I agree with Andrew's "reasonable account limit" point. It might actually makes sense to take that a lot further and ban anyone from holding public debt or CBDC money unless they are citizens of the country concerned.
One reason is that to the extent that when government runs a deficit and FOREIGNERS purchase the debt, or store up CBDC money, that does NOT constrain demand in the country concerned, which is half the point funding govt spending via borrowing.
E.g. if US citizens abstain from spending and purchase Treasuries or CBDC money, that abstention from spending makes room for more govt spending. But if FOREIGNERS purchase the debt, there is none of the latter abstention from spending actually in the US.
It's spooky the way the Chinese 2,500 years ago wrestled with the same monetary and banking problems we wrestle with today. I put a few details on my blog:
https://ralphanomics.blogspot.com/2021/04/trial-post-ignore.html
Makes it easier to exchange into USDs... which don’t expire.... whole thing is a scam...
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