Sunday, September 18, 2016

Central Bank Digital Currencies:
A Revolution in Banking?
Ellen Brown highlights the use of blockchain technology as forming the basis of a revolution of the banking sector .. points out one of the features that central banks are promoting on the use of digital currencies based on on blockchain: "What if the central bank supplanted not just the depository but the lending functions of private banks? A universal distributed ledger designed as public infrastructure could turn the borrowers’ IOUs into 'money' in the same way that banks do now – and do it more cheaply, efficiently and equitably than through banker middlemen .. In a blog for Bank of England staff titled Central Bank Digital Currency: The End of Monetary Policy As We Know It?, Marilyne Tolle suggests that the need to manipulate interest rates might also be eliminated. The central bank would not need this indirect tool for managing inflation because it would have direct control of the money supply .. Blockchain won’t just kill banks, brokers and credit card companies. It will change every transactional process you know. Simply put, blockchain eliminates the need for clearinghouse entities of any kind. And that means a revolution is coming, a fundamental sea change in the way we do business." .. [Cliff Note: Government policies & activities generally are good-intentioned but usually have adverse unintended consequences .. the use of government sponsored or controlled digital currencies will make it easier to do bailins, confiscations, controls & devaluations .. that is why it is important for online platforms like BitGold to be operated outside of the banking system but at the same time be inline with government regulations .. essentially the Internet has enabled traditional government-backed currencies and commodity-based currencies (gold & silver) to be digitized - as in the undigitized era, it is preferable to hold commodity-based currencies versus government-backed currencies for holding currencies as stores of wealth.]
LINK HERE to the essay

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