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0 sats \ 10 replies \ @Solomonsatoshi OP 19 Nov \ parent \ on: Will Chinas CBDC Yuan be more important than Bitcoin ? bitcoin
Payments via traditional domestic bank systems are also hugely inefficient and present friction and costs to consumers and businesses in many countries...
Banks have been very slow to fix this as they derive huge income from it.
Regarding SWIFT many nations will not want US to continue to be able to hold the threat of sanctions against them...as you point out the lack of competition has been a problem.
Yes CBDCs deliver even greater centralised monetary power to governments and central banks but they also offer potentially very much more efficient payments processing.
So, the China payment system is basically borowing some of the stack from eth. Which is basically a tech stack with some interesting tech but lagely unusable for mass consumption due to its minumium system requirements.
It's the second C in cbdc that is the issue. The idea of a currency being digitally native, which already happened years ago. There is no further benefit from the currency aspect, because when you borrow or loan your currency to or from a bank, it is held and accounted for digitally. The notes in circulation make little difference to the digital aspect of which the physical note is a representation of (whilst the abstractation was once thought to be vice-versa.)
The potential loss of privacy and realtime inflationary creep, as digital currency is loaned into existence, is both neither a convenience nor bringing in any efficiency. The efficiencies you mention are all owed to the developement of digital currencies in the wild. Bitcoin, and ostensibly eth, which was a playground for contractual settlements.
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Simply not true.
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When a traditional bank creates a loan, do they print up more notes or borrow them from the central bank? When a central bank engages in QE stimulus, or QT measures, does it actually print or burn physical currency?
.. and when a consumer or TBTF bank loan is repayed, do those repayments get extinquished and written off a ledger, or burned?
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'When a traditional bank creates a loan, do they print up more notes or borrow them from the central bank?'
Bank deposits are IOUs for central bank printed notes/coins. When private banks issue finance they credit the recipients account with the amount - it is created out of thin air.
The vast majority of 'money' in circulation today is that created by private banks via debt issuance.
CBDCs do present some problems for fraction reserve banking because all currency is issued by the central bank under CBDCs. However note - when a standard fractional reserve bank mortgage is paid off under the current system the amount of money (bank deposit) issued when it was created is NOT uncreated! - It remains in circulation.
Not sure where you get the idea Ethereum is used in the Chinese CBDC - it is not. The Chinese have developed their CBDC, which is operational, without any use of Ethereum. Please take some time to study the Chinese CBDC as it is the most advanced and ion use CBDC in the world today- even if very poorly understand by many commentators.
The advantages of CBDCs however derive from their vastly more efficient performance of payments- being a centralised ledger payments are instant and extremely cheap.
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Not sure where you get the idea Ethereum is used in the Chinese CBDC - it is not
I wasn't referring to the CBDC, the mBridge platform that was developed to facilitate, cross-border currency swaps. I'm assuming that includes eYuan and other tokenized assets, as it was developed in P.R.China.
"The MVP platform can undertake real-value transactions (subject to jurisdictional preparedness) and is compatible with the Ethereum Virtual Machine (EVM), a decentralized virtual environment that executes code consistently and securely across all Ethereum Ethereum -2.4% nodes. MVP thus is suitable as a testbed for new use cases and interoperability with other platforms."
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Yes with BRICS Pay now emerging the IBS has backed away from its hosting of mBridge and this is further evidence that China fully intends to lead the development of alternatives to SWIFT/USD hegemony and is active in the process.
Decoupling international trade settlements from US hegemony is crucial to the tertiary layer of Chinas Belt and Road global empire model.
They are reverse engineering the monetary hegemony that subjugated China for more than a century following the Opium Wars- they are doing the reverse engineering via Hong Kong -the original point of injury- quite elegant, and all the while most westerners remain completely unaware/in denial that this is happening.
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Interesting sound bites.
There's an angle to be taken that what favors a sustainable alternative model is transparency and shared development. Hong Kong is an interesting testing ground for all kinds of things, and from spending time there, I felt that Hong Kong had many advantages than it does today, and history tends to paint a more nuanced picture of politics.
These developments are on the radar of the well-informed, irrespective of location. As are the uninformed in post-development nations, there are those in denial of the constant changes in regional capabilities to develop there own economic models. IMO, this is the meaning of 'multi-polar', as opposed to any hub and spoke, belt and road idea.
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What astounds me is the inability of most westerners, especially Bitcoiners who I would consider to be more informed and open minded than most people, to seriously confront the reality and urgency of the Chinese challenge to western hegemony.
This is a massive event in history portending the end of western civilisation at least as the dominant player.
The wests hegemony now rests upon a few fragile legacy advantages - military and monetary dominance- China is developing asymmetric alternatives and building its global model of empire quite openly.
It would seem more likely that China will first gain dominance over the monetary systems and in this Hong Kong is of huge strategic importance.
It was the portal via which the west imposed its hegemony and it can be the portal via which China reverse engineers that hegemony. It is via Hong Kong that China provides USD liquidity indirectly to partners like Russia and Iran. It is via Hong Kong that China is building alternative trade payments protocols. There is only one credible challenger to US hegemony and it is China. Russia and Iran are already attached to Chinas empire. All nations are reliant upon China for access to its manufactured goods and commodity buying. It has already won the trade war- what logically follows is control of trade protocols and logistics. That is where Belt and Road is the infrastructure from roads and rail and ports to tertiary level services such as payments.
It was the portal via which the west imposed its hegemony and it can be the portal via which China reverse engineers that hegemony. It is via Hong Kong that China provides USD liquidity indirectly to partners like Russia and Iran. It is via Hong Kong that China is building alternative trade payments protocols. There is only one credible challenger to US hegemony and it is China. Russia and Iran are already attached to Chinas empire. All nations are reliant upon China for access to its manufactured goods and commodity buying. It has already won the trade war- what logically follows is control of trade protocols and logistics. That is where Belt and Road is the infrastructure from roads and rail and ports to tertiary level services such as payments.