Do you want a digital Loonie?

[Bill Bumface]

Yoho, you're my digital loonie!

[stazzy33]

Originally Posted by Yoho

The Bank of Canada wants to know.

Policymakers will take submissions until June 19.


https://financialpost.com/fp-finance...bank-of-canada


Link to survey on BOC website.

https://www.bankofcanada.ca/2023/05/...igital-dollar/

Are you applying for the job? Based on your body of work here you'd be a shoe in.

[dissentowner]

Originally Posted by Lubicon

No, I'm not in favor.
And holy crap is this ever going to bring out the conspiracy nut jobs in full force. They've been railing about this very thing for several years now, we don't need to give them any ammo or excuses to elevate their paranoia.

Theo Fleury is following this thread.

[flylock shox]

Loonie, Toonie, Digiridoonie?

[powderjunkie]

Originally Posted by Lubicon

No, I'm not in favor.
And holy crap is this ever going to bring out the conspiracy nut jobs in full force. They've been railing about this very thing for several years now, we don't need to give them any ammo or excuses to elevate their paranoia.

Actually, I think this is excellent. Let's create as many meaningless conspiracy-bait situations as possible so these losers direct their energy there instead of accosting healthcare workers entering hospitals.

Like...can we drop an tiny hint that 15 minute cities actually would involve checkpoints and let them froth themselves over that for a few more weeks

[Minnie]

Originally Posted by Lubicon

No, I'm not in favor.
And holy crap is this ever going to bring out the conspiracy nut jobs in full force. They've been railing about this very thing for several years now, we don't need to give them any ammo or excuses to elevate their paranoia.

It just makes me extra glad now, that I have zero contact with my mother, because sweet mother of man buns, the amount of religious conspiracy claptrap I'd have to hear.

Not interested in a digital loonies though.

[bizaro86]

Originally Posted by Fuzz

They do mention a lot of the issues brought up here in the survey, probably worth doing before mentioning all the issues, they seem to have a decent handle on this.

I noticed there wasn't a choice to have anonymity from the public sector as one of the priorities, which seems like one of the primary benefits of cash to me.

Also, digital security was mentioned in way that basically was "of course it will be safe and secure". Colour me skeptical that the best cyber security minds of our time work for the Bank of Canada.

Imo this seems like a government program in search of a problem to solve. Why do we need this? What would it do that isn't solved by either physical cash or etransfer?

[PsYcNeT]

CADC already exists.

[JohnnyB]

China has gradually rolled out tests of a CBDC for the last couple of years and payment has been available in Digital Yuan at many stores in cities like Shanghai for the last year. It's still a small portion of the currency (around 0.1%) but is the best case study of a CBDC in action with something like 100 million users.

People in China are already used to ubiquitous payment using digital means, so there is already competition from payment providers like Wechat and Alipay that offer very good and sophisticated user experience. Canada doesn't have that, but in Canada people are so used to paying with credit as opposed to paying with cash that it might be even tougher to get adoption with a digital cash alternative. A sophisticated approach could create a lot of incentives for participating by taking lessons from DeFi while providing the risk assurance of government backing, but I imagine that would be a ways off for Canada to even consider.

Personally, I think it would be great to have a government provided digital wallet with a secure digital currency capable of removing banks as an intermediary, but I'm sure it would face pushback and political pressure from industry if it does remove some of the need for banks.

[Fuzz]

It's also a lot easier in China to do because there is far less concern over privacy.

[bizaro86]

Originally Posted by JohnnyB

China has gradually rolled out tests of a CBDC for the last couple of years and payment has been available in Digital Yuan at many stores in cities like Shanghai for the last year. It's still a small portion of the currency (around 0.1%) but is the best case study of a CBDC in action with something like 100 million users.

People in China are already used to ubiquitous payment using digital means, so there is already competition from payment providers like Wechat and Alipay that offer very good and sophisticated user experience. Canada doesn't have that, but in Canada people are so used to paying with credit as opposed to paying with cash that it might be even tougher to get adoption with a digital cash alternative. A sophisticated approach could create a lot of incentives for participating by taking lessons from DeFi while providing the risk assurance of government backing, but I imagine that would be a ways off for Canada to even consider.

Personally, I think it would be great to have a government provided digital wallet with a secure digital currency capable of removing banks as an intermediary, but I'm sure it would face pushback and political pressure from industry if it does remove some of the need for banks.

Disintermediating the banks isn't all sunshine and roses though. The banks use the money everyone keeps in their chequing accounts to make loans. I know personally I'm not in favour of most loans being made by the government instead. That's a path for politically favored groups to get all the loans, which is both unfair and bad for the economy. Maybe its fine if you own Volkswagen shares or are an Ontario auto worker, but here in AB I think that would end up hurting us.

[JohnnyB]

Originally Posted by bizaro86

Disintermediating the banks isn't all sunshine and roses though. The banks use the money everyone keeps in their chequing accounts to make loans. I know personally I'm not in favour of most loans being made by the government instead. That's a path for politically favored groups to get all the loans, which is both unfair and bad for the economy. Maybe its fine if you own Volkswagen shares or are an Ontario auto worker, but here in AB I think that would end up hurting us.

I don't imagine it would be one or the other. They wouldn't close all the banks when they introduce a CBDC. It would just be one more option in the market.

[shotinthebacklund]

Originally Posted by Lubicon

No, I'm not in favor.
And holy crap is this ever going to bring out the conspiracy nut jobs in full force. They've been railing about this very thing for several years now, we don't need to give them any ammo or excuses to elevate their paranoia.

Maybe its time to think, what if they are right? Even if you cant ever envision what they are saying comes to pass, it cant hurt trying to understand another perspective.

[bizaro86]

Originally Posted by JohnnyB

I don't imagine it would be one or the other. They wouldn't close all the banks when they introduce a CBDC. It would just be one more option in the market.

For sure, but every dollar sitting in a CBDC is a dollar not in the banking system making productive loans. We're seeing the consequences of deposit flight in the US right now and they aren't pretty.

[Fuzz]

Originally Posted by bizaro86

Disintermediating the banks isn't all sunshine and roses though. The banks use the money everyone keeps in their chequing accounts to make loans. I know personally I'm not in favour of most loans being made by the government instead. That's a path for politically favored groups to get all the loans, which is both unfair and bad for the economy. Maybe its fine if you own Volkswagen shares or are an Ontario auto worker, but here in AB I think that would end up hurting us.

So wait, the bank may actually have to offer incentives, like, say, paying interest of more than 0.5%, to attract money? Uhm, boo hoo? Yes, they may have to give up some of their tens of billions of yearly profits to be able to continue to function. I shall now shed some tears. "Protecting the insane profits big banks" is probably pretty low on the list of reasons not to do this.

[bizaro86]

Originally Posted by Fuzz

So wait, the bank may actually have to offer incentives, like, say, paying interest of more than 0.5%, to attract money? Uhm, boo hoo? Yes, they may have to give up some of their tens of billions of yearly profits to be able to continue to function. I shall now shed some tears. "Protecting the insane profits big banks" is probably pretty low on the list of reasons not to do this.

I don't care about the profits of big banks at all. I'm not a bank employee, shareholder, or fan.

But the loans the banks make to businesses and households (mortgages) are hugely important to our economy. They could make mortgages without deposits since they're mostly government insured so they can sell them as Canada Mortgage bonds. But loans to businesses aren't like that, and mostly require the banks to put up actual money that was in their possession.

If a digital coin has a bunch of people's day-to-day funds that will materially reduce the deposits in the banking system, and I think it's very likely that business loans would be what gets cut.

Now, the government would have that money instead, but the track record of governments at all levels and all political parties in making loans is terrible. Harper with the auto companies, the Liberals with Bombardier, the various politically motivated loans in AB across decades (as early as West Edmonton Mall under Klein). Basically I think the government replacing the banks as deposit takers/loan makers would be a bad idea because I think they'd do a worse job, and past history bears that out imo.

[Fuzz]

I guess I don't see any motivation to keep large sums in a crypto account with it being anchored to the CAD. What I presume will happen is the banks will be tightly integrated with it, you may not even know or care the difference between a digital dollar and real one(where the value is digital).

[TorqueDog]

Originally Posted by Bill Bumface

Yoho, you're my digital Loonie!

I was going to say Matata.

[The Yen Man]

How would this work for homeless people? Does that mean they would all need a phone?

[Fuzz]

Originally Posted by The Yen Man

How would this work for homeless people? Does that mean they would all need a phone?

No, they can still use cash. Everyone can still use cash.