Visa and Mastercard have surged over the past two decades, reaching a combined $1 trillion market cap. That has attracted unwanted attention from regulators.
Obviously my nation! Lol. That’s a good point they would have to break it off and ban the other arms from coming back to the US and using the same name I guess.
Christ…this needed to be major news a year ago. We really need to get banks out of the payment business but fear that they are pulling an Intuit and will make the FedNow system more challenging to use down the road.
FedNow still relies on banks. The only way we can truly get the commerical banks and financial institutions out of the picture is with cryptocurrency (lol) or a CBDC (central bank digital currency). In short, a CBDC would operate like a Government-run Cash App or PayPal and the balance in a CBDC wallet holds the same status as paper money and is legal tender.
I believe that CBDCs are entirely necessary for a digital future. For the everyday citizen, the only form of “cash”, as in “Government-issued legal money”, is paper banknotes and pieces of coinage. This is wholly insufficient for a system where an increasing amount of business is conducted digitally, and all it does is invite middlemen like Visa to insert themselves like a leech and take profit off every transaction. Banks and financial institutions already have digital cash; account balances at the Federal Reserve are as good as cash to banks as far as the law is concerned, but the everyday layman can’t just go into the Federal Reserve and ask to open an account.
This is exactly that CBDCs will solve. Anyone can hold real money (not just a promise to pay money) in a digital format and exchange it peer-to-peer or use it to conduct business free of fees and middlemen.
The only problem is that conservatives in America think that they can’t trust the Government, so it’s better to trust for-profit financial institutions instead. After all, the banks have never fucked it up before, right?
Couldn’t tell if this was a joke about the number of cryptocurrencies that exist… But in case it was, we already do have dozens of “fake currencies.” In fact, there are people who make a career through arbitrage between these currencies.
I can understand if you want to call any kind of Fiat currency “fake money” - doesn’t mean I think it should be abandoned in favor of some arbitrary metal or whatever, but I can understand it.
That said, any kind of currency works when it’s standardized. Obviously it will be regionalized by country or whatever. Making up multiple cryptocurrencies as alternatives to what we have now slides us in the direction of a barter system (“I don’t take Bitcoin, you’ll have to get that converted to Ethereum. Oh, BTC is down against that? Sucks to suck!”)
And let’s say the cryptobros get their way and we end up with (whatever crypto you choose) as a standard currency for the country/world/universe. Who would benefit most from that, and why should they? The way I see it, the early adopters would live like kings and if you didn’t gamble on the right crypto early, you better hope you can get something for your assets, including the cash of today.
Because electronic payments that do not require a middleman are inherently better than funneling everything through centralized organizations like Visa. They could make their own dollar based blockchain that has secure and private transactions based on their own stablecoin. It would be the same as a cash payment.
Again, why would the government waste real money doing that with fake money, when they can do it with real money instead? What benefit is there, over just being a regular processor for real money? Because it’s definitely not the inability to reverse transactions in blockchain systems, that’s more of a feature for criminals.
I have a very strong feeling that @paf0@lemmy.world is being downvoted here, not because they make a bad point, but because they phrased it in terms of cryptocurrency which immediately triggers negative reactions from everyone.
What OP has proposed is neither novel, nor a terrible idea. In fact, economists call it a central bank digital currency. And yes, some countries have adopted it. It’s usually not run with a blockchain, but that’s because if you have a trusted central entity to run the system, that being the central bank, a blockchain is inferior in practically every aspect to a normal relational database. That’s why all current CBDCs still use fairly traditional accounting systems.
Your use, however, of the terms “real money” and “fake money” has, I believe, the effect of shutting down intelligent conversation, rather than encouraging it. “Money” is a social construct. “Real money” is whatever the Government declares to be “real” and that the population is willing to use. It doesn’t need to be physical money. And it is unquestionable that in the countries that have adopted the legal framework that allows their central banks to issue CBDCs, the money so issued this way is as real and legally equivalent to paper banknotes and metal coins.
I struggle with the idea that “real money”, even as crypto, needs to be centralized and easily tracked. It’s not just about crime, it’s about privacy. The federal reserve doesn’t need to know the movements of every single individual. If I lend you $10, and you don’t pay me back, it’s both embarrassing for me and embarrassing for you, but we’re good friends and this is just between us. Maybe you could provide that sort of anonymity on a relational database, but it doesn’t have to be centralized. The blockchain tech gets faster and faster and not everyone has to be a full node, they could just run it at banks, maybe even with a bridge to other systems.
Anyway, I understand where people are coming from, blockchain was ruined by cryptobros and scammers. It’s not an inherently evil idea, it may be inadequate in speed as compared to Visa, but the idea that I could take the middleman out of any business while still having common listings, and make it a conversation between a supplier and consumer is fundamentally good. We do not need Sabre or Expedia taking 15% of every hotel or airline booking. We do need Uber’s secret pricing on rideshares. Very little value is added by middlemen in those transactions, where, in the end, the reputation of the provider is paramount- and yes, things can be set up so that provider can be vetted by third parties. The promise of blockchain is not NFTs, it’s freedom to do business in a different way, and some of the limiting factors holding it back are the lack of clear regulations for the industry, and a trusted stablecoin network.
Actually, that is a decent point in this idea’s favor. Don’t think that’ll overcome the downsides, but I’ll give you a point for that one all the same.
if the government was to do their own crypto it could do a lot to disrupt the current unregulated “stablecoins” that currently exist, i could see it happing if for no other reason than to fight money laundering. If the fed is doing it, it becomes “real” money and most people would probably prefer a fed coin to something like usdt.
Visa should be nationalized. Let the government run the payment processing if we are only going to have only one.
By which nation? It operates pretty much everywhere.
Obviously my nation! Lol. That’s a good point they would have to break it off and ban the other arms from coming back to the US and using the same name I guess.
Check out FedNow. Basically a domestic government run payment system. Still pretty new and growing.
Christ…this needed to be major news a year ago. We really need to get banks out of the payment business but fear that they are pulling an Intuit and will make the FedNow system more challenging to use down the road.
FedNow still relies on banks. The only way we can truly get the commerical banks and financial institutions out of the picture is with cryptocurrency (lol) or a CBDC (central bank digital currency). In short, a CBDC would operate like a Government-run Cash App or PayPal and the balance in a CBDC wallet holds the same status as paper money and is legal tender.
I believe that CBDCs are entirely necessary for a digital future. For the everyday citizen, the only form of “cash”, as in “Government-issued legal money”, is paper banknotes and pieces of coinage. This is wholly insufficient for a system where an increasing amount of business is conducted digitally, and all it does is invite middlemen like Visa to insert themselves like a leech and take profit off every transaction. Banks and financial institutions already have digital cash; account balances at the Federal Reserve are as good as cash to banks as far as the law is concerned, but the everyday layman can’t just go into the Federal Reserve and ask to open an account.
This is exactly that CBDCs will solve. Anyone can hold real money (not just a promise to pay money) in a digital format and exchange it peer-to-peer or use it to conduct business free of fees and middlemen.
The only problem is that conservatives in America think that they can’t trust the Government, so it’s better to trust for-profit financial institutions instead. After all, the banks have never fucked it up before, right?
I’m
Ah fuck! Did VISA get you?
I’d love to see the federal reserve issue a no fee stablecoin, though I wonder if it would be secure in the long term with quantum coming.
Why would the government put time into making fake money when they can just make more real money?
Our money is already “fake money”
You know what would make it better? If we had dozens of them!
Couldn’t tell if this was a joke about the number of cryptocurrencies that exist… But in case it was, we already do have dozens of “fake currencies.” In fact, there are people who make a career through arbitrage between these currencies.
I can understand if you want to call any kind of Fiat currency “fake money” - doesn’t mean I think it should be abandoned in favor of some arbitrary metal or whatever, but I can understand it.
That said, any kind of currency works when it’s standardized. Obviously it will be regionalized by country or whatever. Making up multiple cryptocurrencies as alternatives to what we have now slides us in the direction of a barter system (“I don’t take Bitcoin, you’ll have to get that converted to Ethereum. Oh, BTC is down against that? Sucks to suck!”)
And let’s say the cryptobros get their way and we end up with (whatever crypto you choose) as a standard currency for the country/world/universe. Who would benefit most from that, and why should they? The way I see it, the early adopters would live like kings and if you didn’t gamble on the right crypto early, you better hope you can get something for your assets, including the cash of today.
Because electronic payments that do not require a middleman are inherently better than funneling everything through centralized organizations like Visa. They could make their own dollar based blockchain that has secure and private transactions based on their own stablecoin. It would be the same as a cash payment.
Again, why would the government waste real money doing that with fake money, when they can do it with real money instead? What benefit is there, over just being a regular processor for real money? Because it’s definitely not the inability to reverse transactions in blockchain systems, that’s more of a feature for criminals.
I have a very strong feeling that @paf0@lemmy.world is being downvoted here, not because they make a bad point, but because they phrased it in terms of cryptocurrency which immediately triggers negative reactions from everyone.
What OP has proposed is neither novel, nor a terrible idea. In fact, economists call it a central bank digital currency. And yes, some countries have adopted it. It’s usually not run with a blockchain, but that’s because if you have a trusted central entity to run the system, that being the central bank, a blockchain is inferior in practically every aspect to a normal relational database. That’s why all current CBDCs still use fairly traditional accounting systems.
Your use, however, of the terms “real money” and “fake money” has, I believe, the effect of shutting down intelligent conversation, rather than encouraging it. “Money” is a social construct. “Real money” is whatever the Government declares to be “real” and that the population is willing to use. It doesn’t need to be physical money. And it is unquestionable that in the countries that have adopted the legal framework that allows their central banks to issue CBDCs, the money so issued this way is as real and legally equivalent to paper banknotes and metal coins.
I struggle with the idea that “real money”, even as crypto, needs to be centralized and easily tracked. It’s not just about crime, it’s about privacy. The federal reserve doesn’t need to know the movements of every single individual. If I lend you $10, and you don’t pay me back, it’s both embarrassing for me and embarrassing for you, but we’re good friends and this is just between us. Maybe you could provide that sort of anonymity on a relational database, but it doesn’t have to be centralized. The blockchain tech gets faster and faster and not everyone has to be a full node, they could just run it at banks, maybe even with a bridge to other systems.
Anyway, I understand where people are coming from, blockchain was ruined by cryptobros and scammers. It’s not an inherently evil idea, it may be inadequate in speed as compared to Visa, but the idea that I could take the middleman out of any business while still having common listings, and make it a conversation between a supplier and consumer is fundamentally good. We do not need Sabre or Expedia taking 15% of every hotel or airline booking. We do need Uber’s secret pricing on rideshares. Very little value is added by middlemen in those transactions, where, in the end, the reputation of the provider is paramount- and yes, things can be set up so that provider can be vetted by third parties. The promise of blockchain is not NFTs, it’s freedom to do business in a different way, and some of the limiting factors holding it back are the lack of clear regulations for the industry, and a trusted stablecoin network.
Why, for tracking of course!
Actually, that is a decent point in this idea’s favor. Don’t think that’ll overcome the downsides, but I’ll give you a point for that one all the same.
if the government was to do their own crypto it could do a lot to disrupt the current unregulated “stablecoins” that currently exist, i could see it happing if for no other reason than to fight money laundering. If the fed is doing it, it becomes “real” money and most people would probably prefer a fed coin to something like usdt.
Money is made from belief. Why would the public at large believe it to be a real currency?
if the banks and federal government say it is and accept it as such then it is by definition “real” currency.
It would be real money if the federal reserve issued it. Cash still exists, is that a feature for criminals or does it benefit the poor and unbanked?
No, as you said, its a stable coin backed by real money.
Cash transactions can easily be reversed, unlike blockchain, but nice bait.
Literally the opposite is true…
Online payments, which is a lot of transactions.
Pretty sure the current system of real money already handles that one friend.