I'm not sure there's any benefit to 'users', nor why (non-central) banks would care either really, beyond having a new thing to race to be an early provider of and grow marketshare (some would like that, especially more modern/fintechy ones, and others hate it I suppose).
It seems to be a solution in search of a problem, and probably also relates to the then Chancellor now PM announcing last year that he wanted to make the UK "a global hub for cryptoasset technology and investment"[1]. Since crypto is now generally regarded as a scam by the wider public, that has been quietly forgotten, but apparently the BoE didn't get the memo yet.
The latest thing is they want to use the digital currency to "bank the unbanked", ignoring that basic bank accounts already exist, and banks are required to provide them[2].
Or do you mean like Sinn Féin, Plaid Cymru, and the SNP?
I've not actually heard of any private individual in the UK getting un-banked.
On the other hand, I do assume there's a need to prove one's identity and if that fails an account may be closed, and identity can be too expensive for some people. Not sure how to resolve that.
Apart from a few Russian billionaires, about 25 people in the UK (£61K in total) have had their bank accounts "frozen" - it seems mostly Jihadist terrorists who have left the country to fight with ISIS:
If you were found guilty and sentenced for money laundering, funding terrorism, or political corruption etc, I would guess many banks would not want you to have an account with them.
Do your own research is in this case code for it hasn’t happened.
The closest you can find is:
- the hostile environment denying immigrants banking services (while an obvious injustice, unrelated to their political views) [1]
- seizures etc related to crime (including terrorism)
Most denials of banking services are due to poor credit history and as mentioned in this thread Basic Bank accounts exist as a mandated product to serve this market.
You can see some of the reasons why around a million U.K. adults are unbanked through this research and evidence [2] - suspiciously not appearing on this list is anything with even a hint of denial due to political belief or actions.
So please do enlighten us of all these alleged cases of politically motivated un-banking.
Given I have zero specifics, "doing my own research" meant an internet search, which returned nothing relevant, and also didn't cause me to think of any alternative search terms that would be likely to return more relevant results.
I mean, if three unrelated political parties can seek literal independence without this topic getting into search results, I don't see how "unsavoury political views" or "political dissidents" is going to be hugely relevant to the topic of "who has bank accounts".
For example, Googling:
> "Dessie Ellis" unbanked
gave me exactly one result, reporting on a committee he was a member of. Ten years ago.
I wouldn't be surprised if he was actually unbanked at some point given what he was extradited for, convicted of, and ultimately imprisoned for, but the point is I can't find evidence that he was on the internet with obvious search terms.
Laura Towler is one person whose bank account was closed down after someone found their bank details and petitioned their bank. Then they shouted about it on Twitter.
Twitter isn't the real world. I didn't find any article on this, even on breibart (my go to website when I search for outrage), and nothing on her gab account.
Which is her political group's website. I say "group" not "party" because it doesn't appear to be registered as a party, and they are still on the electoral register list with all the other tiny weird groups: https://www.electoralcommission.org.uk/who-we-are-and-what-w...
I'm still putting more weight on "either this didn't happen at all or not for the reasons they're suggesting" along with all the other things they whinge about in that page — if the Tories could choose Johnson and Truss, there's a lot of room for foolishness in UK politics — but at least it's a story that got reported, so it does at least pass the bar required by my previous comment.
Do you know of any political dissidents in the UK who have had their accounts shut down who are likely to be granted access to a personal digital sterling account [linked to their bank account] by the UK government?
Crypto a scam? The only scams I see are people, companies like ftx and idiots collecting monkey nfts. Crypto, actual crypto like btc, etc is doing just fine, in fact better than most assets.
> Didn't Bitcoin lose half its value like 6 months ago?
Let's say the following statement is true: "If X is a scam then X's price eventually goes down". That doesn't necessarily make the converse statement true: "If X's price eventually goes down then X is a scam". This is a common logical fallacy. Those two statements are logically distinct propositions and if one is true, it doesn't necessarily make the other one true as well. This is just basic logic.
Which means that bitcoin's price going down does not necessarily mean that bitcoin is a scam.
Commodities' prices can fluctuate substantially. In October 2008, oil had lost more than 50% of its value in 3 months. [1]
In August 1999, gold had lost more than 70% of its value since its all-time-high in 1980. [2]
Would you also have said at those times that oil and gold are a scam because their value had gone down significantly?
(Cue the "but oil and gold are useful" responses, obliviating the fact that cryptocurrencies such as bitcoin are extremely useful in many ways, some of them unique, and that gold's industrial/ornamental utility does not justify its historical or current price by a long shot, but rather, its utility as an investment/store of value/wealth protection/diversification asset does).
I was not saying Bitcoin is a scam. I was questioning it "doing just fine" and "in fact better than most assets"
A very common logical fallacy I come across online is someone assuming a person has said something that they didn't say and writing a wall of text opposing it. Thank you for the basic logic tips on a site named Hacker News though, I appreciate the refresher :P
From what I can gather since your money is stored at the BOE rather than your high street bank it should help avoid another "too big to fail" type situation that happened in 2008.
Update 1: my guess would be that private money (think Venmo) and crypto have a chance to win over commercial bank money (think bank accounts and transfers) for the general public, and the government thinks it’s a potential threat (probably wisely IMO).
God knows why the bank industry doesn’t have its shit together, but even in the EU I’ve come to feel suspicious towards bank transfers. Maybe a transfer will take five seconds, maybe one day, maybe a week with no explanation why. Bank apps, even modern ones (N26 etc) are still somewhat meh.
The part of my brain that thinks “ought” a lot is screaming “no, everyone ought to use bank transfers and they ought to be good”… but objectively they are a hit and miss.
A CBDC is at least going to be stored in a single database, so maybe it’ll be working a bit better.
> Update: my guess would be that private money (think Venmo) and crypto have a chance to win over commercial bank money (think bank accounts and transfers) for the general public, and the government thinks it’s a potential threat (probably wisely IMO).
Venmo is really still commercial bank money - any deposit in a Venmo account is backed 100% by a deposit in a commercial bank account.
> God knows why the bank industry doesn’t have its shit together, but even in the EU I’ve come to feel suspicious towards bank transfers. Maybe a transfer will take five seconds, maybe one day, maybe a week with no explanation why. Bank apps, even modern ones (N26 etc) are still somewhat meh.
EU banks use a combination of SEPA and SEPA Instant, and for a payment to go via SEPA Instant both the sender and recipient have to be connected to the SEPA Instant scheme and settle via a common system (e.g. TIPS). Where this isn't the case, payments fall back to SEPA, causing a lack of predictability at time of payment.
The status quo in the UK is much better, every bank is on Faster Payments (the UK equivalent of SEPA Instant), and have been for almost a decade. This makes bank-to-bank transfers in the UK fast and predictable.
> A CBDC is at least going to be stored in a single database, so maybe it’ll be working a bit better.
All UK bank transfers settle via the Bank of England's RTGS system, which means at heart, everything is already in a single database anyway.
In essence, bank accounts are somewhat pointless in the modern age. Banks are all required to provide the same service (more or less) and waste a shitton of money to make it happen and be regulated for it.
Obviously getting rid of consumer bank accounts overnight would be a fiscal catastrophe, so they’re going to phase them out to ease the blow.
Pounds in your bank aren't "digital currency" in this sense. They're privately provide bank IOUs. You still need cash to avoid using a bank.
With digital pounds, you can "stuff cash under your mattress" and use it without a bank. Iirc, the central bank keeps an anonymous ledger that you have "digital access" to.
You can use an intermediary, eg., a bank, to keep track of the transaction and prevent deannonymisation by the central bank. Though i think you can also completely avoid that too.
> Obviously getting rid of consumer bank accounts overnight would be a fiscal catastrophe, so they’re going to phase them out to ease the blow.
I don't know how the UK is run, but in the US, it wouldn't matter at all. Banks could easily replace all deposits with a loan from the Fed.
The annoying part would be figuring out how ATMs get funded. I'd be fine with a few government ATMs (police stations, city hall, DMV, etc. would be obvious places) and the rest paid, though.
Economists would surely love the anonymised spending data, were it to be made available. Though it would have to be heavily aggregated to avoid any individuals being identifiable by their spending times and locations. Retailers would presumably save by not having to pay fees to Visa, MasterCard, Stripe, etc. For consumers, I assume that at first it will be used by early adopters just for the novelty value. Maybe eventually there will be some small monetary incentive to use it instead of visa. Conspiracy theorists will say that they're going to ban cash and force people to use it. Conspiracy theorists are wrong.
> These are already low in Europe due to regulation.
For sure, it's not going to save vast amounts of money. The original comment said "I already have a digital pound in my bank account". I am merely pointing out that though it may seem entirely frictionless and free to spend online already, there are costs involved.
What do you mean "can't"? My bank certainly has the information, since I can see it online if I log in. Of course they would have to change the law, but this also goes for the digital pound.
An central point of easy, precise control and programmed permissions. The current banking system can sort of do some of that - they want it done properly. Pure control.
The threat of dollarization of the UK economy is pretty minimal, and I'm not seeing how the present proposal to grant individuals optional rights to hold a relatively small sterling balance in a basic bank account administered by the BofE rather than some other entity changes that. The working paper seems more worried by the proposed Libra (remember that!) than the USD...
I did. It [1] referenced a paper [2] to claim "the rise of digital money could threaten monetary sovereignty," though it's more concerned with "digital currency issued by 'BigTech,'" for example Libra, than Bitcoin.
The sovereignty argument is predicated on a threat of substitution.
> more to do with dedollarization
Your working paper doesn't mention dollarization as a threat to European monetary sovereignty. (The EU seeks to dedollarize its economy.) "Digital dollarization" has nothing to do with the dollar per se, but instead refers to the replacement of national currencies with non-national digital currencies.
This really just seems to boil down to a state-provided bank account rather than anything more meaningful, which is not necessarily a bad thing but is unnecessary given there is already a competitive market for bank accounts (all of which are covered by state guarantees such as FSCS protection or FDIC insurance).
> I already have a digital pound in my bank account
CBDC's would skip the bank, be issued an controlled by the central bank, without the need of a bank middle man infrastructure. They have been deployed in China, and the nearly every western central bank has announced plans to pilot these. Personally they scare me.
Monetarily, CBDCs connect the central bank to depositors. This enables monetary helicopter money, deeper negative interest rates (can’t do this with cash), and a host of other powerful tools.
A digital central currency handled by the central bank will centralise all transactions in that currency in one ledger available to the authorities. Perfect way to monitor you citizens.
I was initially snarky but if they manage to pull it off it wouldn't hurt as a case study for the rest of the world.
The quicker we remove Visa and Mastercard as gatekeepers, the better. If you sell a product right now that shows a bit of ankle you're classed a high risk merchant and have no alternatives but to pay higher rates or give up.
I'd like an alternative, but I don't yet trust the people who brought us Brexit to do it. If anything I'm assuming they're being scammed and we'll find out in a few years.
Inb4 there's a massive scandal where the person coming up with the crypto coin is mates with the PM and the project gets cancelled.
Well, of course a digital pound or any other CBDC cannot be used as a store of wealth. Like what the Reserve Bank of India (RBI) is doing with the Digital Rupee; the UK is doing the same with a digital pound; a CBDC that will introduce savings limits of up to £20K to incentivise spending meaning you cannot save more than that and this cap can change at anytime.
Also admitted here:
> Money above the cap would be "swept" into a customer's commercial bank account given that a digital pound would not be a means for storing wealth, he told members of UK Finance, a banking industry body.
Imagine if this is forced upon like what is happening with the eNaira in Nigeria. [1] I won't be surprised to see the same thing happen in India with the ridiculous hype of UPI, which is certainly going to use CBDCs on there as payments.
[0] being you saying 'That should scare us all' backing it up with a link that just says the same concept as OP for the digital euro. Have you got any more substance to this argument?
That 20k limit is an inital limit. It's to stop everyone moving all their money into the digital pound which would cause all the high street banks to fail.
”Banks are places people store money that’s not properly invested.”
When I looked at the BOE paper last year the figure mooted was two to three thousand - which would seem the much more natural figure for CBDC transactions.
Got flagged countless times for mentioning the current blockchain work is a plot to crowdfund the upcoming digital EURODOLLAR and digital passport, looks like that day is approaching and is being officialized :)
That's important to hear and try to understand what we do not understand or believe, argumentation is the best weapon against misinformation, not censorship
Now the question, what will happen to the cryptocurrency market once the central banks will release theirs
Will they coexist, or will they become worthless, or worse: illegal
64 comments
[ 3.0 ms ] story [ 151 ms ] thread"At the other end, you could say I need a little wallet full of internet cash to buy things on Amazon"
It's already almost frictionless shopping on Amazon with my existing bank/pound?
I'm not sure there's any benefit to 'users', nor why (non-central) banks would care either really, beyond having a new thing to race to be an early provider of and grow marketshare (some would like that, especially more modern/fintechy ones, and others hate it I suppose).
The latest thing is they want to use the digital currency to "bank the unbanked", ignoring that basic bank accounts already exist, and banks are required to provide them[2].
[1] https://www.gov.uk/government/news/government-sets-out-plan-...
[2] https://www.gov.uk/government/collections/basic-bank-account...
Maybe the next step will be to create one? :-)
Do you know if any of the political dissidents in the UK who have had their accounts shut down have successfully challenged a bank in court?
Who?
Do you mean like the IRA?
Or do you mean like Sinn Féin, Plaid Cymru, and the SNP?
I've not actually heard of any private individual in the UK getting un-banked.
On the other hand, I do assume there's a need to prove one's identity and if that fails an account may be closed, and identity can be too expensive for some people. Not sure how to resolve that.
https://www.dailymail.co.uk/news/article-2994515/Only-25-Bri...
If you were found guilty and sentenced for money laundering, funding terrorism, or political corruption etc, I would guess many banks would not want you to have an account with them.
There's a list of "sanctioned" people/organisation - who would probably find it hard to open a bank account in the UK: https://www.gov.uk/government/publications/the-uk-sanctions-...
Of course you haven't because they are just ordinary people who just happen to have unsavoury political views. You can do your own research.
The closest you can find is: - the hostile environment denying immigrants banking services (while an obvious injustice, unrelated to their political views) [1] - seizures etc related to crime (including terrorism)
Most denials of banking services are due to poor credit history and as mentioned in this thread Basic Bank accounts exist as a mandated product to serve this market.
You can see some of the reasons why around a million U.K. adults are unbanked through this research and evidence [2] - suspiciously not appearing on this list is anything with even a hint of denial due to political belief or actions.
So please do enlighten us of all these alleged cases of politically motivated un-banking.
1. https://www.theguardian.com/uk-news/2017/sep/22/home-office-...
2. https://publications.parliament.uk/pa/cm201719/cmselect/cmtr...
I did.
Given I have zero specifics, "doing my own research" meant an internet search, which returned nothing relevant, and also didn't cause me to think of any alternative search terms that would be likely to return more relevant results.
I mean, if three unrelated political parties can seek literal independence without this topic getting into search results, I don't see how "unsavoury political views" or "political dissidents" is going to be hugely relevant to the topic of "who has bank accounts".
For example, Googling:
> "Dessie Ellis" unbanked
gave me exactly one result, reporting on a committee he was a member of. Ten years ago.
https://www.oireachtas.ie/en/press-centre/press-releases/201...
I wouldn't be surprised if he was actually unbanked at some point given what he was extradited for, convicted of, and ultimately imprisoned for, but the point is I can't find evidence that he was on the internet with obvious search terms.
> "Laura Towler" "bank account"
worked on Google. One of the top hits was this thread, but it did also give me:
https://www.patrioticalternative.org.uk/banks_engage_war_fre...
Which is her political group's website. I say "group" not "party" because it doesn't appear to be registered as a party, and they are still on the electoral register list with all the other tiny weird groups: https://www.electoralcommission.org.uk/who-we-are-and-what-w...
I'm still putting more weight on "either this didn't happen at all or not for the reasons they're suggesting" along with all the other things they whinge about in that page — if the Tories could choose Johnson and Truss, there's a lot of room for foolishness in UK politics — but at least it's a story that got reported, so it does at least pass the bar required by my previous comment.
No
> had their accounts shut down have successfully challenged a bank in court.
To challenge it in court, first it needs to happen.
9 out of 10 political dissidents, dictators, launderers, arms dealers, cartels and run-of-the-mill tax dodgers globally chose the UK banks every day.
Let's say the following statement is true: "If X is a scam then X's price eventually goes down". That doesn't necessarily make the converse statement true: "If X's price eventually goes down then X is a scam". This is a common logical fallacy. Those two statements are logically distinct propositions and if one is true, it doesn't necessarily make the other one true as well. This is just basic logic.
Which means that bitcoin's price going down does not necessarily mean that bitcoin is a scam.
Commodities' prices can fluctuate substantially. In October 2008, oil had lost more than 50% of its value in 3 months. [1]
In August 1999, gold had lost more than 70% of its value since its all-time-high in 1980. [2]
Would you also have said at those times that oil and gold are a scam because their value had gone down significantly?
(Cue the "but oil and gold are useful" responses, obliviating the fact that cryptocurrencies such as bitcoin are extremely useful in many ways, some of them unique, and that gold's industrial/ornamental utility does not justify its historical or current price by a long shot, but rather, its utility as an investment/store of value/wealth protection/diversification asset does).
[1] https://www.nytimes.com/2008/10/17/business/worldbusiness/17...
[2] https://goldprice.org/gold-price-history.html
> actual crypto like btc, etc is doing just fine
I was not saying Bitcoin is a scam. I was questioning it "doing just fine" and "in fact better than most assets"
A very common logical fallacy I come across online is someone assuming a person has said something that they didn't say and writing a wall of text opposing it. Thank you for the basic logic tips on a site named Hacker News though, I appreciate the refresher :P
I'll quote reply in future to avoid confusion :)
Because the price of Bitcoin is up 60% in the last three months, so what does that mean?
Sure, if you are valuing it in certain fiat currencies. It didnt lose value as a fraction of the maximum supply.
How about giving that power to a random government official instead? And paving a way to non-fungible earmarked money while we’re at it.
https://www.bankofengland.co.uk/-/media/boe/files/paper/2023...
-
Update 2: see nr’s comment below.
-
Update 1: my guess would be that private money (think Venmo) and crypto have a chance to win over commercial bank money (think bank accounts and transfers) for the general public, and the government thinks it’s a potential threat (probably wisely IMO).
God knows why the bank industry doesn’t have its shit together, but even in the EU I’ve come to feel suspicious towards bank transfers. Maybe a transfer will take five seconds, maybe one day, maybe a week with no explanation why. Bank apps, even modern ones (N26 etc) are still somewhat meh.
The part of my brain that thinks “ought” a lot is screaming “no, everyone ought to use bank transfers and they ought to be good”… but objectively they are a hit and miss.
A CBDC is at least going to be stored in a single database, so maybe it’ll be working a bit better.
Venmo is really still commercial bank money - any deposit in a Venmo account is backed 100% by a deposit in a commercial bank account.
> God knows why the bank industry doesn’t have its shit together, but even in the EU I’ve come to feel suspicious towards bank transfers. Maybe a transfer will take five seconds, maybe one day, maybe a week with no explanation why. Bank apps, even modern ones (N26 etc) are still somewhat meh.
EU banks use a combination of SEPA and SEPA Instant, and for a payment to go via SEPA Instant both the sender and recipient have to be connected to the SEPA Instant scheme and settle via a common system (e.g. TIPS). Where this isn't the case, payments fall back to SEPA, causing a lack of predictability at time of payment.
The status quo in the UK is much better, every bank is on Faster Payments (the UK equivalent of SEPA Instant), and have been for almost a decade. This makes bank-to-bank transfers in the UK fast and predictable.
> A CBDC is at least going to be stored in a single database, so maybe it’ll be working a bit better.
All UK bank transfers settle via the Bank of England's RTGS system, which means at heart, everything is already in a single database anyway.
Okay, then I’m wrong on all three points and I have no clue why the UK wants a CBDC.
As with the rest of crypto, 99% a solution in search of a problem.
Banking in the U.K. isn’t perfect but for the majority of consumers it’s quick, easy and convenient and by and large fee free.
Obviously getting rid of consumer bank accounts overnight would be a fiscal catastrophe, so they’re going to phase them out to ease the blow.
That’s my 2c anyway
Pounds in your bank aren't "digital currency" in this sense. They're privately provide bank IOUs. You still need cash to avoid using a bank.
With digital pounds, you can "stuff cash under your mattress" and use it without a bank. Iirc, the central bank keeps an anonymous ledger that you have "digital access" to.
You can use an intermediary, eg., a bank, to keep track of the transaction and prevent deannonymisation by the central bank. Though i think you can also completely avoid that too.
I don't know how the UK is run, but in the US, it wouldn't matter at all. Banks could easily replace all deposits with a loan from the Fed.
The annoying part would be figuring out how ATMs get funded. I'd be fine with a few government ATMs (police stations, city hall, DMV, etc. would be obvious places) and the rest paid, though.
Central Bank Digital Currencies (CBDC) are more similar to cryptocurrencies.
They could get this from banks already.
> Retailers would presumably save by not having to pay fees to Visa, MasterCard, Stripe, etc.
These are already low in Europe due to regulation.
No they can't.
> These are already low in Europe due to regulation.
For sure, it's not going to save vast amounts of money. The original comment said "I already have a digital pound in my bank account". I am merely pointing out that though it may seem entirely frictionless and free to spend online already, there are costs involved.
What do you mean "can't"? My bank certainly has the information, since I can see it online if I log in. Of course they would have to change the law, but this also goes for the digital pound.
Secondly, it would prevent bank runs from happening.
Thirdly, monetary sovereignty. This is a big one for the EU.
It's all in the EU CBDC working paper https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2713~91ddff9e...
This is not true.
> monetary sovereignty. This is a big one for the EU.
This is only true to the degree Bitcoin is a threat to the euro or pound.
It's got nothing to do with Bitcoin and more to do with dedollarization. Read the working paper.
I did. It [1] referenced a paper [2] to claim "the rise of digital money could threaten monetary sovereignty," though it's more concerned with "digital currency issued by 'BigTech,'" for example Libra, than Bitcoin.
The sovereignty argument is predicated on a threat of substitution.
> more to do with dedollarization
Your working paper doesn't mention dollarization as a threat to European monetary sovereignty. (The EU seeks to dedollarize its economy.) "Digital dollarization" has nothing to do with the dollar per se, but instead refers to the replacement of national currencies with non-national digital currencies.
[1] https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2713~91ddff9e... page 13
[2] https://www.nber.org/system/files/working_papers/w26300/w263...
CBDC's would skip the bank, be issued an controlled by the central bank, without the need of a bank middle man infrastructure. They have been deployed in China, and the nearly every western central bank has announced plans to pilot these. Personally they scare me.
The quicker we remove Visa and Mastercard as gatekeepers, the better. If you sell a product right now that shows a bit of ankle you're classed a high risk merchant and have no alternatives but to pay higher rates or give up.
I'd like an alternative, but I don't yet trust the people who brought us Brexit to do it. If anything I'm assuming they're being scammed and we'll find out in a few years.
Inb4 there's a massive scandal where the person coming up with the crypto coin is mates with the PM and the project gets cancelled.
Also admitted here:
> Money above the cap would be "swept" into a customer's commercial bank account given that a digital pound would not be a means for storing wealth, he told members of UK Finance, a banking industry body.
Imagine if this is forced upon like what is happening with the eNaira in Nigeria. [1] I won't be surprised to see the same thing happen in India with the ridiculous hype of UPI, which is certainly going to use CBDCs on there as payments.
Like I said before in [0] That should scare you.
[0] https://news.ycombinator.com/item?id=33867672
[1] https://www.premiumtimesng.com/business/business-news/571691...
”Banks are places people store money that’s not properly invested.”
When I looked at the BOE paper last year the figure mooted was two to three thousand - which would seem the much more natural figure for CBDC transactions.
That's important to hear and try to understand what we do not understand or believe, argumentation is the best weapon against misinformation, not censorship
Now the question, what will happen to the cryptocurrency market once the central banks will release theirs
Will they coexist, or will they become worthless, or worse: illegal