My rich old neighbour asked me about CBDCs yesterday (bull market confirmed lol).
He wanted to know what role retail banks will play if they were implimented.
I wasn't very good at trying to explain.
Could you help me out for next time I see him?
My rich old neighbour asked me about CBDCs yesterday (bull market confirmed lol).
He wanted to know what role retail banks will play if they were implimented.
I wasn't very good at trying to explain.
Could you help me out for next time I see him?
CBDC = slave money
🫡.
CBDCs are just digital fiat money with Smart Contracts, meaning a Central Bank or government could program money in everybody's accounts according to their whim.
Yep, so what role would a retail bank play?
Would the issuer just handle wallets which replace retail bank accounts?
Or would retail banks still provide lending/savings services?
it’s kind of hard to say I think. Technically I guess nothing would have to change except more surveillance and potentially faster transactions…or govt could decide to take over the role of banks completely. It depends on what laws govt make and what laws govt breaks. Difficult question. CDBCs seem silly to me from a individual POV. What’s the benefit? Unless you tell me I don’t have to pay income tax anymore, it’s all deducted automatically, I guess that would relieve a burden for some people. Still prefer decentralized currency and the more variety of methods of exchange the better
The auto income tax is an interesting one!
One of the questions that came up around the role of banks was, would the CBDC issuer just give you a 'wallet' instead?
So essentially replacing a bank account if you didn't have one?
I guess they could if they wanted to but I doubt that would replace banking anytime soon. People who aren't into crypto yet aren't really crazy about self custody, even if govt claims to protect and insure it. It's hard to really imagine CBDC's still. I think they will creep up on us slowly in stages, and by then crypto will likely be a part of the financial system
sure CBDCs will be run by companies and not banks
Companies or governments?
they are pretty much the same thing anymore lol
Both. With the regulatory capture we see today there isn't a whole lot of difference between the State and private corporations. They're two sides of the same coin in many ways.
I think Banks will be the Gateway Into ans out of CBDCs.
Rich people have nothing to worry about. Banks are not going anywhere. They are now holding the CBDC and digital asset into their vaults (cloud in general but artificially some secure place in their eyes). Jobs are defintely dying in fintech as AI takes over but banks are just shedding skin not dying.
But they would still be the ones offering returns on savings and loans for example?
I tried to say that banks would simply be forced to pivot a little.
But I didn't really know what that pivot would be.
Yes, they'd still be offering bonds, loans, savings interest (high downfall on that number soon). Bank of England released paper on stablecoins, they're allowing stablecoins (domestic and international) and removing their interest giving capacity unless backed like tether then it's different case. The way I see it world would be going digital like india's UPI but you get to choose which digital asset to pay with and not tied to fiat.
Interesting, cheers :)
Or whether the issuer would take full control of that aspect too?