Major Banks Preparing Fiat Backed Crypto

[flag39]

Since the blockchain technology is open source, Central banks can mint their cryptocurrency and as they are able to print fiat as much as they want their crypto will be backed up one to one. But will their crypto be called decentralized and free from inflation? 

http://www.thedailyeconomist.com/2017/09/major-banks-prepare-for-cashless.html
http://bitnewsbot.com/six-more-banks-join-ubs-led-group-seeking-to-develop-blockchain-tokens-backed-by-fiat-currencies/

[Titanos]

i can't see any decentralized thing here. it'll be a simple digital currency owned by the bank.

[MAbtc]

Since the blockchain technology is open source, Central banks can mint their cryptocurrency and as they are able to print fiat as much as they want their crypto will be backed up one to one. But will their crypto be called decentralized and free from inflation?  

http://www.thedailyeconomist.com/2017/09/major-banks-prepare-for-cashless.html
http://bitnewsbot.com/six-more-banks-join-ubs-led-group-seeking-to-develop-blockchain-tokens-backed-by-fiat-currencies/

I think it's a stretch to define such currencies as "cryptocurrencies." Let's look at the commonly accepted definition from Google:

a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

With bank-issued digital currencies, users cannot enforce network rules meaningfully or verify the legitimacy of funds. Bank issuance means centralized, with trusted nodes defining the network rules and history. That means that it's not decentralized, nor trustless, and you can't prevent money printing. It's basically the opposite of what cryptocurrency is, or at least what it was intended to be.

[energycom]

i can't see any decentralized thing here. it'll be a simple digital currency owned by the bank.

Technically, a bank can't prepare a decentralized digital asset. It's impossible. If they present a product for cryptoworld, this won't be decentralized. But, I would support this action despite decentralization.

[MetaVerde]

http://www.thedailyeconomist.com/2017/09/major-banks-prepare-for-cashless.html

What I got out of this article is that the banks don't trust each other.   

[Qartersa]

Since the blockchain technology is open source, Central banks can mint their cryptocurrency and as they are able to print fiat as much as they want their crypto will be backed up one to one. But will their crypto be called decentralized and free from inflation? 

http://www.thedailyeconomist.com/2017/09/major-banks-prepare-for-cashless.html
http://bitnewsbot.com/six-more-banks-join-ubs-led-group-seeking-to-develop-blockchain-tokens-backed-by-fiat-currencies/

A lot of arguably incorrect statements here.

First, central banks do no print as much as they want. If you even have a little background on economics, if the governments print so much money that would lead to hyper inflation and the loss of value of their currency. It is in their best interest not to print as much as they want.

Second, if they would create their own cryptocurrency backed up by fiat, then it is not decentralized. Since they have a lot of control over it.

Third, being backed up by fiat currency will mean that it is subject to inflation.

[Funeral Wreaths]

Since the blockchain technology is open source, Central banks can mint their cryptocurrency and as they are able to print fiat as much as they want their crypto will be backed up one to one. But will their crypto be called decentralized and free from inflation?  

http://www.thedailyeconomist.com/2017/09/major-banks-prepare-for-cashless.html
http://bitnewsbot.com/six-more-banks-join-ubs-led-group-seeking-to-develop-blockchain-tokens-backed-by-fiat-currencies/

I think it's a stretch to define such currencies as "cryptocurrencies." Let's look at the commonly accepted definition from Google:

a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

With bank-issued digital currencies, users cannot enforce network rules meaningfully or verify the legitimacy of funds. Bank issuance means centralized, with trusted nodes defining the network rules and history. That means that it's not decentralized, nor trustless, and you can't prevent money printing. It's basically the opposite of what cryptocurrency is, or at least what it was intended to be.

yeah, as much as i agree wih you, it seems that cryptocurrency would be following the laws and rules of the banks if that will happen. it uld also lost its credibility as a decentralized currency or network, and it would sound likely a fixed valued currency or if the worst might happen investors will withdraw their money because of that changes that can lost the interest for most investors.

[Soutogu]

We're gonna see a bunch of companies jump on the blockchain wagon in the VERY NEAR future! They'll all start making their private blockchains and then export it to Ethereum's, the biggest public one.

[ivrynx]

i think seeing this is inevitable, considering the fact that they know they might loose their war against cryptocurrency, so instead of hating crypto, i guess it is a better business strategy to join them. but in this case, I want to see what innovation are they going to do with fiat, after how many decades after it was taken off the gold standard, this is a major step for fiat if this will push through, however banks should still keep in mind we talking about cryptocurreny, it is decentralized, so they still have no jurisdiction over crypto, they should know their place. I think those banks will just create their altcoins, for them to be in the game, and then will tell people that theirs is better, since they cannot have control over bitcoin, they will try to bad mouth bitcoin so that people will be scared and go back to fiat again, but the thing is, if banks made a fiat that is backed up by crypto, there is a high chance no one would fall for it, we are already a small portion of the population that accepted cryptocurrency, and we don't want banks to take over our transactions even the government, there's no way we would support that kind madness, so how can the majority of people accept digital currency, if at the first place, whenever they hear about bitcoin they always think of it as a scam.

[Pab]

Best luck,i ve been reading that kind of informations years ago,thay are prepering and prepering

[Hydrogen]

Fiat is usually backed by gold. Using fiat itself to back something probably isn't the best idea.

There are many historical cases of fiat currencies crashing and devaluing under hyperinflation.

It would probably be better to use something that has never crashed to back a currency.

Like for example, the price & value of weed has never crashed that I know of.

It might be better to collect and store tons of weed (or something with a stable/appreciating value) to back a currency, since the value of weed has never crashed.

That way people can have confidence there is collateral backing a currency that isn't likely to depreciate.

[Yakamoto]

Since the blockchain technology is open source, Central banks can mint their cryptocurrency and as they are able to print fiat as much as they want their crypto will be backed up one to one. But will their crypto be called decentralized and free from inflation? 

http://www.thedailyeconomist.com/2017/09/major-banks-prepare-for-cashless.html
http://bitnewsbot.com/six-more-banks-join-ubs-led-group-seeking-to-develop-blockchain-tokens-backed-by-fiat-currencies/

They probably will never even try to call it decentralized to be honest, they'll probably just say that it's a crypto and leave it at that. There's no point for them tot ry and lie about it, and it will definitely have inflation (unless this is the beginning of a secret cabal of currencies which will not be used for the average person and just for those in the upper classes).

It'll be no different from what they do now. It's an attempt at re-branding which really won't go far with people who are educated in cryptos, but that's a small enough community as it is.

[anon4250158]

It's kind of like store credit- it's only good when you use it with the bank.  And if it's 1:1 with fiat, all it is is a digital way of transferring funds, it's not really it's own currency.

[MetaVerde]

Fiat is usually backed by gold.

Fiat, by definition, is not backed by anything.

Libya was going to gold-backed currency.
So was Syria.

So maybe fiat is missile-backed.

[flag39]

It was a relief to read all your reactions, I thought the banks were going to take the goodies of our crypto-world. Thank you!