"The benefits of current decentralized currency endeavours" are in the eye of the beholder; GBPcoin probably won't be good for buying drugs, it won't triple in value in one year, and it isn't deflationary Austrian money. But for normal payments I agree.
If they solve the anonymity problem (such that they can replace paper currency, which can also be entirely anonymous), then I'd expect that you could buy anything you want with it.
Subject to anti-money-laundering rules, of course, which usually apply to larger transactions.
> it won't triple in value in one year
That doesn't have much to do with the currency, but with the market, and volatility works both ways.
...and 15bn EUR banknotes. If you think about it, they all have a serial number and it's easy to track them with a mere bigdata database. Most banknotes change hands only once before being registered in a bank again. The others are all suspicious. Keeping your money for a few months? Not a crime by itself but in most situations it's linked with laundering. Withdrawing every week from your ATM and cashed by the same drug dealer? They probably won't scream it over the roofs, but the FBI probably already uses this technique to track criminals.
If you think it's hard to track patterns in banknotes, it's ok, but it's less hard than tracking every single CB transaction across the world.
According to the reference in [0]: "As at the end of June 2013, there are 197,800 ATMs in use on the [Chinese] mainland, of which 100,700 or 55.28% have been upgraded with the serial number enquiry function. According to schedule, by late 2015, the serial number of every Rmb100 note withdrawn from banks by members of the public can be traced."
Banks don't track which sn they are handing out each time. So, on deposit you just know the starting bank. And that's only if the depositing bank tracks sn which is far less common than you might think. Banks are more than happy to put deposited money back into circulation without that overhead.
The linked article, by a central bank employee, explicitly notes that users of cash value its anonymity:
> As a risk-free, interest-bearing asset, CBcoin would be preferable to bank deposits (and even paper currency, presuming anonymity concerns were addressed), encouraging households and firms to convert their bank deposits into CBcoin deposits.
While governments might not prefer anonymous payment methods to exist, they can still recognize that much of the money-using public appreciates anonymous payments at least some of the time.
> While governments might not prefer anonymous payment methods to exist, they can still recognize that much of the money-using public appreciates anonymous payments at least some of the time.
To the extent that "governments" don't like anonymous payment methods, that's mostly law enforcement/security agencies.
Central banks basically recognize that anonymous payments mechanisms will exist, and prefer that central bank currency fill that role, since the more non-central-bank money is used in practice, the less predictable effect central bank monetary policy has.
Eliminating physical cash is not necessary to impose negative interest rates, even quite steep ones. By modifying the exchange rate between physical cash and bank deposits, the economic incentive to hoard physical cash is removed, allowing the central bank to impose an interest rate of their choice while still allowing citizens the flexibility of using their preferred payment methods over short time horizons. This piece[0] produced by the International Monetary Fund delves into the details about the steps banks will take to implement the necessary changes.
Wow, I didn't imagine the possibility of creating a different exchange rate for cash versus deposits. Surely this could not be implemented by the US central bank without new legislation? Many thanks for the reference to the IMF publication...just the TOC makes the hair on my neck stand on end :)
That is a bit silly. First of all cash is just a medium of exchange that we have refined to the most frictionless method possible. Without it we would just be exchanging some other tokens of value. Secondly Not everywhere has access to the tech that we do, such as credit cards and ATMs, ApplePay and Android Pay. A lot of the world relies on cash, so it would be ridiculous to suggest it would be illegal.
