Prediction: most countries will experiment with launching their own digital 💸 currencies.
(a short thread)
(a short thread)
1/ What’s a digital currency?
It’s programmable money directly issued from the central bank to citizens.
Right now, banks are intermediaries and central bank doesn’t issue money directly to citizens.
Read more here:
It’s programmable money directly issued from the central bank to citizens.
Right now, banks are intermediaries and central bank doesn’t issue money directly to citizens.
Read more here:
https://twitter.com/paraschopra/status/1346688696599252993
2/ The programmability of a digital currency is what makes it so appealing.
It can allow the central bank of a country to achieve their wet dream: precisely control the economy.
They will do it by precisely controlling the money in your hands.
It can allow the central bank of a country to achieve their wet dream: precisely control the economy.
They will do it by precisely controlling the money in your hands.
3/ Economy is getting slower?
Program the unspent money (which hasn’t changed hands in X time period) to reduce over a period of time.
People will start spending.
Program the unspent money (which hasn’t changed hands in X time period) to reduce over a period of time.
People will start spending.
4/ Taxes are not getting collected?
Simply deduct the tax automatically during transactions.
Simply deduct the tax automatically during transactions.
5/ Want to manage a welfare program?
Send money that can only be spent on a particular good or item (say eduction or medical expenses).
Send money that can only be spent on a particular good or item (say eduction or medical expenses).
6/ Want to uplift consumer mood?
Simply increase money below a certain threshold by a factor of X, leaving more money in the hands of consumers.
Simply increase money below a certain threshold by a factor of X, leaving more money in the hands of consumers.
8/ This precise control is what authoritarian nations want, so it’s no surprise that China is already experimenting with the idea.
Read this by @finshots
finshots.in/archive/what-i…
Read this by @finshots
finshots.in/archive/what-i…
9/ Hacker News has a great discussion on this: news.ycombinator.com/item?id=248183…
10/ The inevitable consequence of this would be unimaginable control of the state over the individual.
But the number of problems digital currencies solves for a central bank makes it irresistible.
I’m fairly confident that digital rupee is coming.
But the number of problems digital currencies solves for a central bank makes it irresistible.
I’m fairly confident that digital rupee is coming.
11/ Paradoxically, the success of decentralised cryptocurrencies has made many people OK with the notion of a digital currency.
I don’t think many consumers will care whether a digital currency centrally controlled or decentralised.
I don’t think many consumers will care whether a digital currency centrally controlled or decentralised.
12/ A trivial way for a nation to boost adoption of digital currency is to give extra interest rate on digital currency if you exchange your traditional currency with it.
Once it’s adopted and starts getting used and the old money disappears, central bank has precise control.
Once it’s adopted and starts getting used and the old money disappears, central bank has precise control.
13/ Digital currencies are fascinating.
Just to be clear, with any tech there’s positives and negatives.
The positives are that economy will likely to be stable, welfare programs can be managed well and UBI can be launched.
Just to be clear, with any tech there’s positives and negatives.
The positives are that economy will likely to be stable, welfare programs can be managed well and UBI can be launched.
https://twitter.com/paraschopra/status/1355422922299432964
14/ That’s it.
Hope you enjoyed the thread :)
Hope you enjoyed the thread :)
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