I remember when Joe Stiglitz endorsed the CBDC concept. Must be ten years ago. At the time, it seemed like a control freak's crackpot boondoggle. It still does. I was surprised by Stiglitz's sincere naïveté. It takes no crystal ball to predict that the implementation will be badly botched and the idiocy involved in the botching will be stubbornly defended. That's the way digitalization is rolled out.
In that interview with Mahir Alkaya that I cited from, the host asked him why the ECB is pursuing a CBDC. He shrugged, and said basically FOMO: "everyone else is doing it, we should too". What you say is exactly why I'm not losing any sleep: it would take years to develop and test. No way they can pull such a complex system out of a hat like a rabbit and automagically force everyone to use it. On a more general note, I'm sure block-chain technology will in due time have its legitimate uses, but CBDC is one of those avowed "solutions" in search of a problem.
Stiglitz liked the possibility of more efficient tax collection and more efficient tracking of criminality. It's so typically Ivory Tower that he never took a look at what is already possible and already *not* being used.
I expect this to play out as numerous, narrowly focused pilot projects and some efforts to introduce circumscribed utility scrip systems, targeted primarily at poor people and students. I expect it will be hated, too.
The initial reaction appears to more indifference than dislike, at least based on the news coming out of Nigeria, where the central bank rolled out a CBDC and the response has been... hugely underwhelming. Uptake of something like 1 1/2% of the population. Ya know, those very same under-banked people who Super-Modern Máxima wants to "do good" for.
So indeed, they'll roll out these pilots, and if they include the more onerous aspects, such as cash progammability, if they are overly invasive systems, lots of activists and parliamentarians from around the world will be taking note and help get the word out. I'm glad we have a people like Mahir Alkaya on our side. Didn't know much about him before, was very impressed with what I saw in the interview. For me he is the face of 21st C socialism: a rigorous focus on fundamental economic questions like banking, an understanding that mixed economies are where it's at, and he eschews the old-fashioned rhetorical baggage of yore. Will definitely be watching him more closely!
Uptake of China's CBDC has been disappointing. As a fallback, Beijing may use it to monitor targeted aid programs, pay civil service salaries, and encourage its use in tax remittences. And, of course, as a central bank reserve..
I remember when Joe Stiglitz endorsed the CBDC concept. Must be ten years ago. At the time, it seemed like a control freak's crackpot boondoggle. It still does. I was surprised by Stiglitz's sincere naïveté. It takes no crystal ball to predict that the implementation will be badly botched and the idiocy involved in the botching will be stubbornly defended. That's the way digitalization is rolled out.
In that interview with Mahir Alkaya that I cited from, the host asked him why the ECB is pursuing a CBDC. He shrugged, and said basically FOMO: "everyone else is doing it, we should too". What you say is exactly why I'm not losing any sleep: it would take years to develop and test. No way they can pull such a complex system out of a hat like a rabbit and automagically force everyone to use it. On a more general note, I'm sure block-chain technology will in due time have its legitimate uses, but CBDC is one of those avowed "solutions" in search of a problem.
Well said.
Stiglitz liked the possibility of more efficient tax collection and more efficient tracking of criminality. It's so typically Ivory Tower that he never took a look at what is already possible and already *not* being used.
I expect this to play out as numerous, narrowly focused pilot projects and some efforts to introduce circumscribed utility scrip systems, targeted primarily at poor people and students. I expect it will be hated, too.
The initial reaction appears to more indifference than dislike, at least based on the news coming out of Nigeria, where the central bank rolled out a CBDC and the response has been... hugely underwhelming. Uptake of something like 1 1/2% of the population. Ya know, those very same under-banked people who Super-Modern Máxima wants to "do good" for.
So indeed, they'll roll out these pilots, and if they include the more onerous aspects, such as cash progammability, if they are overly invasive systems, lots of activists and parliamentarians from around the world will be taking note and help get the word out. I'm glad we have a people like Mahir Alkaya on our side. Didn't know much about him before, was very impressed with what I saw in the interview. For me he is the face of 21st C socialism: a rigorous focus on fundamental economic questions like banking, an understanding that mixed economies are where it's at, and he eschews the old-fashioned rhetorical baggage of yore. Will definitely be watching him more closely!
https://www.nakedcapitalism.com/2022/11/one-year-in-the-first-ever-cbdc-of-a-largish-economy-nigerias-enaira-is-a-complete-flop.html
Uptake of China's CBDC has been disappointing. As a fallback, Beijing may use it to monitor targeted aid programs, pay civil service salaries, and encourage its use in tax remittences. And, of course, as a central bank reserve..
What about for B2B cross-border transactions? As a SWIFT workaround?