Bitcoin, Cryptocurrency, and the Future of Global Finance

#1,151
#1,151
allvol123 said:
Except when you're on here telling everyone IT IS the shizzz..

At this point I am not sure if you are trying to convince them or yourself. I'm leaning toward the latter.
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I did not realize how good I was at time management.
 
#1,152
#1,152
VolStrom said:
I'm all ears. Why does there need to be people that understand "tech" to find the value in vaporware? I'm actually pretty tech savvy, explain it to me in an engineering term that can make me understand why these faux currencies are worth money?
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I don't think you have to have a great understanding of tech to see the value in crypto, but that deflection was a great way to skirt my request. You say it has no value. I can show you plenty of tech-savvy people who see value. Where are the tech-savvy people saying there is no value?
 
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#1,153
#1,153
n_huffhines said:
I don't think you have to have a great understanding of tech to see the value in crypto, but that deflection was a great way to skirt my request. You say it has no value. I can show you plenty of tech-savvy people who see value. Where are the tech-savvy people saying there is no value?
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Most are enjoying the good life looking at all the dollars in their bank account.
 
#1,156
#1,156
Chetan Ahya
Morgan-Stanley Research

Central Bank Digital Currencies: The Next Big Disruption? | Morgan Stanley

5/19/2021

Central Bank Digital Currencies, often called CBDCs, are a new form of digital cash intended to replace physical cash. Before I go any further, it's important to note that digital currencies should not be confused with cryptocurrencies, which are either pegged to an underlying asset—think stablecoins—or backed by a blockchain, such as Bitcoin.

CBDCs, by contrast, are just as advertised: a digital form of currency issued and backed by a central bank and maintained in a centralized ledger. It's essentially digital cash.

Why are we talking about CBDCs right now? Efforts to introduce CBDCs are gaining momentum, with as many as 86% of world central banks exploring their own digital currencies. China has already piloted trials of CBDC in a number of its cities, the European Central Bank is expected to decide on its digital euro this summer, and the Federal Reserve Bank of Boston is set to release its initial research in the fall.

So, what explains this sudden interest from the central banks to launch digital currencies? There are three reasons:

1. Monetary sovereignty. Private payment networks have expanded rapidly. As they gain market share, these networks could become a primary means of transactions. Central banks may be concerned that money will circulate almost exclusively within the networks, posing a threat to their management of the global monetary system.

2. Financial stability. The potential failure of a private provider of digital cash could disrupt the payment system and destabilize the financial system. While regulators have taken steps to mitigate these risks, they can’t completely eliminate them. But if they issue their own digital currencies, they can guarantee their reliability as a medium of exchange.

3. Financial inclusion. The rise of private, narrow money networks could exclude segments of the general public, such as the unbanked population. A CBDC, just like physical cash, can be made available more broadly and support greater financial inclusion.

The question is, how disruptive could CBDCs be? When something as fundamental as what you use to buy a cup of coffee changes, the effects are likely to be far reaching.

For example, commercial banks could face disintermediation, that is, be cut out of transactions if consumers use non-banking entities. Once a digital currency launches, consumers will be able to transfer their bank deposits to their CBDC accounts, subject to central bank limits. And the technological infrastructure of CBDCs could also make it easier for new nonbank entities to enter the payment space. As this transition accelerates, the competitive pressures on commercial banks will likely increase.

Another area of impact could be transactions data. At Morgan Stanley, we expect a tug of war between the consumers who want to stay anonymous and the innovative fintech companies that will create incentives for consumers to use their platforms, thereby generating valuable user transaction data. Fintech success could spark a proliferation of network effects that allow them to gain market share vs. traditional banks.

CBDCs could also disrupt the international payment system. Any country with a CBDC that is accepted for international transactions could enjoy significant advantages in financing costs and control over financial transactions, similar to the U.S. dollar's privileged role today. Some central banks, like the ECB and the People's Bank of China, see the move toward digital currency as an opportunity to raise the international status of their respective currencies and share of cross-border payments.

While CBDC initiatives aren’t intentionally disruptive, they will likely bring unintended consequences that are. The pace of disruption will hinge on how quickly network effects take hold in the CBDC system; the more widely digital currencies are accepted, the more opportunity for innovation, and the greater the scope for disruption to the financial system.
 
#1,157
#1,157
Thunder Good-Oil said:
Chetan Ahya
Morgan-Stanley Research

Central Bank Digital Currencies: The Next Big Disruption? | Morgan Stanley

5/19/2021

Central Bank Digital Currencies, often called CBDCs, are a new form of digital cash intended to replace physical cash. Before I go any further, it's important to note that digital currencies should not be confused with cryptocurrencies, which are either pegged to an underlying asset—think stablecoins—or backed by a blockchain, such as Bitcoin.

CBDCs, by contrast, are just as advertised: a digital form of currency issued and backed by a central bank and maintained in a centralized ledger. It's essentially digital cash.

Why are we talking about CBDCs right now? Efforts to introduce CBDCs are gaining momentum, with as many as 86% of world central banks exploring their own digital currencies. China has already piloted trials of CBDC in a number of its cities, the European Central Bank is expected to decide on its digital euro this summer, and the Federal Reserve Bank of Boston is set to release its initial research in the fall.

So, what explains this sudden interest from the central banks to launch digital currencies? There are three reasons:

1. Monetary sovereignty. Private payment networks have expanded rapidly. As they gain market share, these networks could become a primary means of transactions. Central banks may be concerned that money will circulate almost exclusively within the networks, posing a threat to their management of the global monetary system.

2. Financial stability. The potential failure of a private provider of digital cash could disrupt the payment system and destabilize the financial system. While regulators have taken steps to mitigate these risks, they can’t completely eliminate them. But if they issue their own digital currencies, they can guarantee their reliability as a medium of exchange.

3. Financial inclusion. The rise of private, narrow money networks could exclude segments of the general public, such as the unbanked population. A CBDC, just like physical cash, can be made available more broadly and support greater financial inclusion.

The question is, how disruptive could CBDCs be? When something as fundamental as what you use to buy a cup of coffee changes, the effects are likely to be far reaching.

For example, commercial banks could face disintermediation, that is, be cut out of transactions if consumers use non-banking entities. Once a digital currency launches, consumers will be able to transfer their bank deposits to their CBDC accounts, subject to central bank limits. And the technological infrastructure of CBDCs could also make it easier for new nonbank entities to enter the payment space. As this transition accelerates, the competitive pressures on commercial banks will likely increase.

Another area of impact could be transactions data. At Morgan Stanley, we expect a tug of war between the consumers who want to stay anonymous and the innovative fintech companies that will create incentives for consumers to use their platforms, thereby generating valuable user transaction data. Fintech success could spark a proliferation of network effects that allow them to gain market share vs. traditional banks.

CBDCs could also disrupt the international payment system. Any country with a CBDC that is accepted for international transactions could enjoy significant advantages in financing costs and control over financial transactions, similar to the U.S. dollar's privileged role today. Some central banks, like the ECB and the People's Bank of China, see the move toward digital currency as an opportunity to raise the international status of their respective currencies and share of cross-border payments.

While CBDC initiatives aren’t intentionally disruptive, they will likely bring unintended consequences that are. The pace of disruption will hinge on how quickly network effects take hold in the CBDC system; the more widely digital currencies are accepted, the more opportunity for innovation, and the greater the scope for disruption to the financial system.
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Ripple Pilots Private Ledger for Central Bank Digital Currencies
 
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#1,163
#1,163
Here is a great breakdown of how the new system will work in language that all of us software developers can easily understand.

 
#1,165
#1,165
Rasputin_Vol said:
I'm not a big crypto guy, but I can sniff out some BS when I hear it. WTF is the purpose of crypto if you are inviting govt regulation?

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I say no to regulation but it still serves a purpose with increased regulation. For example, $500b annually is wasted by poor migrant workers paying remittances to banks to send $ home. Crypto will solve this even with regulation.
 
#1,166
#1,166
n_huffhines said:
I say no to regulation but it still serves a purpose with increased regulation. For example, $500b annually is wasted by poor migrant workers paying remittances to banks to send $ home. Crypto will solve this even with regulation.
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Do we need crypto to reduce bank fees?
 
#1,173
#1,173
This was 3 years ago.

This heir to one of America's great banking fortunes, and a former chair of the New York Republican Party's finance committee, has struggled with drug addiction. So when he began dabbling heavily in cryptocurrencies years ago, his friends and family tried to dissuade him, figuring it was another erratic obsession. And, indeed, he abandoned some early investments and sold his Bitcoin a few years ago.

But then Mellon got turned on to XRP, spending some $2 million to acquire coins, which he liked because it's one of the few cryptocurrencies that are working within the banking system. "Crypto is scary and dark. It's anti-America," says Mellon, 54. "I am pro-America, pro-business and pro-bank. That's why I went with Ripple."


Mellon's XRP is worth around $1 billion. Recently divorced, he parties in a posh Los Angeles house he rents for $150,000 month. "It's $1 billion virtually for free. I actually have earned it because I was the only person who was willing to raise his hand," says Mellon. "My family thought I was insane, when I knew it was a home run."
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