The explanation of a digital currency, when you get past the paranoia about an increase in tracking you[1], sounds exactly like a "narrow bank". But the Fed has always been against those, because they think customer banks will be too poorly capitalized if everyone uses a government bank directly. That seems like the best reason we wouldn't get one.
A good reason to have them would be that it'd be really easy for the government to pay you, for instance if we had a UBI or one of those things everyone on here loves. Right now they're surprisingly bad at it. A lot of government agencies have to pay people with prepaid debit cards, and there's people who never got their stimulus checks still.
[1] mainly unjustified because they're already tracking you in regular bank accounts so it can't even be any worse…
> mainly unjustified because they're already tracking you in regular bank accounts so it can't even be any worse…
That's one way to look at it. Another way is to see that tracking will be backed up by efficient enforcement and control. That's more than a step further, that's something that completely re-organizes society.
You could argue that something like that is necessary in the 21st century, but besides the paranoia there's concern about who controls a system like that.
> A good reason to have them would be that it'd be really easy for the government to pay you, for instance if we had a UBI or one of those things everyone on here loves. Right now they're surprisingly bad at it. A lot of government agencies have to pay people with prepaid debit cards, and there's people who never got their stimulus checks still.
That seems like a good reason to not have them. Sending people checks is profoundly simple 17th century technology. Putting people who can't even master that in charge of securing against stealing an arbitrarily large amount of money over the internet is like that xkcd about voting software:
That's literally an American problem. Here in the UK, it's extremely easy to set up a bank account even if you don't earn very much, or if you recently declared bankruptcy. If America wanted to help the unbanked, they have every opportunity to do so.
There are plenty of ways for the unbanked to get an account. From online banks with $0 deposit requirements, to local banks with $25minimums. While there certainly are literacy or accessibility issues, the number one cause of not having a bank account, according to FDIC surveys is not trusting banks.
The first time I tried to get a bank account as a mostly broke college student, I walked into a branch of the bank that had an agreement with my university to supply ATMs on campus. I said I wanted an account. They did everything in their power to not give me an account. Eventually, they rejected me because I had a NYS non-driver's ID card instead of a license. "We've had problems with these," they said. This bank branch was in downtown Manhattan, where roughly no one drives.
A few years after I managed to get them to give me an account, I overdrafted my checking account by a few dollars and they disabled my ATM card. After my next deposit cleared, I went back to that bank branch to get my card reinstated. They did not want to do it. The manager eventually said he could help me if I "promised I wouldn't do it again". I asked for my account to be closed instead, and I will always remember how pleased the guy seemed to be losing me as a customer.
It is not easy for everyone to get and maintain a bank account.
I just looked like someone who was not worth their time. I never did have more than $100 in the account, and dealing with me might have cost them more than they made on me since I didn't pay any fees except for the one time I overdrafted.
I still think (hope!) the real reason central banks (and governments) want a digital currency is that they're not sure completely replacing cash-infrastructure with one or more privately-owned, possibly foreign-owned, alternatives is such a great idea.
> The explanation of a digital currency, when you get past the paranoia about an increase in tracking you[1], sounds exactly like a "narrow bank". But the Fed has always been against those, because they think customer banks will be too poorly capitalized if everyone uses a government bank directly.
This sounds uncomfortably similar to the "reason" the IRS can't do our own taxes for us and send us the bill.
Sort of, but TurboTax actually lobbies for that. A lot of large banks don't even want you as a customer in the first place, but the government makes them do it.
Also, everyone here is arguing "the government shouldn't know about my finances", and I feel like "the government should do my taxes for me" conflicts with that?
Since I don't have any lawyers on hand, I'm not qualified to design a private system so I don't feel like making one up[1]. But since I remember how bank transfers work right now (hint: they go through the government), I can say people claiming they have some right now are wrong.
[1] for instance, I don't remember the legal status of mailing cash through USPS, but pretty sure it's different privacy-wise even though it's "the government"
Why is it not put your transaction history into a database that the government can subpoena if they want to know what you've been buying, which all of us have already been doing if you're not conducting transactions in cash? I have a lot of facts about myself I'd like to keep mostly hidden, but are not hidden from law enforcement officers who can get a warrant.
A good reason to have them would be that it'd be really easy for the government to pay you, for instance if we had a UBI or one of those things everyone on here loves. Right now they're surprisingly bad at it. A lot of government agencies have to pay people with prepaid debit cards, and there's people who never got their stimulus checks still.
[1] mainly unjustified because they're already tracking you in regular bank accounts so it can't even be any worse…