Do we Need Central Banks?

[Ladyga]

Yes, countries without this need will be difficult to support the economy. for all the time of their existence, they developed the tasks of which should adhere to: - the stability of the national monetary unit, which in this case is understood both as the stability of the currency inside the country (that is, suggests low inflation), and how its stability in external payments (that is, assumes a stable course);

- stability of the financial system, understood as the absence of large-scale banking crises and the ability of the financial system to ensure payments in the economy;

- Despite the fact that today, most of all, these goals are explicitly or implicitly set before monetary authorities, historically, their composition and priority have changed.

[OecoSystema]

But it hasn't been that way for very long. The industrial revolution was financed with various tokens and note created by industrial companies (e.g. cotton mills etc.), local banks and entrepreneurs.

Legal tender came in to the picture as there was a need for order in the chaos. There were lots of scams at the time.

Today, we have a digital revolution going on and similarly cryptocurrencies are arriving on the scene.

If the financial stability aspect of fiat currency cannot be upheld (mathematical certainty), there is much more to come.

[munareal]

In as much as we use the fiat currencies yes, we need the central bank. The central bank has their uses. The cryptocurrency usage is decentralized so central banks are not needed in the crypto space. The two can coexist for us to choose which we want to use

[zhanyiguai261315]

Although cryptocurrency has a tendency to replace the central government, it still cannot replace the central bank!
Banks still play a very important role in our daily economic life, and the banking industry is self-renewing to meet the development of society and technology!

[mlsbd]

Definitely we have to need Central Banks immediately because of we can transfer cryptocurrency in banks and we will get Fiat money.
But if government will not makes regulation for legalizing Bitcoin we can't hope for central banks.

[kabum21]

Until now it is difficult to know the consequences that the elimination of the central banks would have, because it is something that has not happened since its creation, neither in the most liberal or anarchist governments, but perhaps with the advance of the cryptos that is possible, but I see it as a distant future.

[Ozero]

Shifting from Central Planning to a Decentralised Economy: Do we Need Central Banks?
by Professor Richard A. Werner, D.Phil. (Oxon)

I. The Central Bank Narrative

For more than the past four decades, public policy discourse, especially when touching on macroeconomic and monetary policy, has been dominated by the views held and actively sponsored by the central banks, particularly in Europe and North-America, as well as Japan.

Their policy narrative has been consistent over time and virtually identical between central banks, which is why I shall refer to it collectively as the ‘central bank narrative’. It has been mirrored in the type of economics that central bankers have supported and that has indeed subsequently become dominant in academia and among the economists selected as the experts of choice in the major newspapers and television channels: the theoreticians advancing neo-classical economics.

This central bank narrative (and hence also the dominant neo-classical economics, also known as ‘mainstream economics’) has at least five major pillars, which I shall list briefly:


The truth of the matter is: We don’t need central banks. Since 97% of the money supply is created by banks, the importance of central banks is far smaller than generally envisaged. Moreover, the kind of money that commercial banks create is not privileged at law. Legally, our money supply is simply private company credit, which can be created by any company, with or without banking license.

Eurozone countries, having given up the right to their own currencies, can still create money and reflate the economy: the government, for instance in Spain, simply needs to stop the issuance of government bonds, and fund the entire public sector borrowing requirement from the domestic banks that create it out of nothing – and can do so at more competitive rates as the bond markets: this policy of Enhanced Debt Management (Werner, 2014b) not only would make it obvious that Spain does not need the ECB, but it would also put the national debt profiteers – the bond underwriting firms such as Goldman Sachs and Morgan Stanley – out of business.

This reality of private money creation also means that we can, without legal obstacles, create a decentralized system of local currencies, without central bank involvement.

The key principle of such decentralization is local autonomy, self-determination, self-responsibility and self-administration. These are in fact the fundamental principles of the co-operative movement, as championed by Hermann Schultze-Delitzsch and Wilhelm Raiffeisen over 150 years ago. This co-operative movement early on realized that a crucial role for co-operatives is in the creation of co-operative banks controlled by the local communities. Sadly, in the UK credit unions are not banks, since they are not allowed to lend to firms in meaningful amounts, and don’t have a banking license. Thus we need to create true community banks.

Lord Action pointed out:

 

“It is easier to find people fit to govern themselves than people fit to govern others”.

 

“Towns were the nursery of freedom.”

 

The German banking system is dominated by 1,500 community banks, which are also the majority of banks in the entire EU. This means that 80% of German banks are not-for-profit, which has strengthened the German economy for the past 200 years. A banking system consisting of many small banks is also far less prone to boom-bust cycles and it creates more jobs per given amount of loan than large banks. Thus community banks also result in a more equal income and wealth distribution.

Local banking is highly popular in Germany, because SMEs get access to finance that would not be serviced by large banks. The community banks provide their services at competitive rates and support their customers also during recessions. With community banks, the wider community gets a bank whose goals are aligned with theirs, banks that pay taxes, banks that support local growth and jobs. At the same time community banks offer customers a place to put their money where it can benefit the local community, not far-flung projects or speculators.

Can we tackle this challenge?

Until the 1970s, there has been much optimism in economics and there have been high expectations that many of the problems of mankind would soon be solved.

Was this a reasonable expectation?

While it has not come true, it was a reasonable expectation. This is because

 

“Our problems are man-made, therefore they may be solved by man. And man can be as big as he wants. No problem of human destiny is beyond human beings”

John F. Kennedy

I very much doubt that we are moving from centralized planning to a decentralized economy. I think that the state and the decentralized economy are incompatible concepts. The economy in any state can only be centralized.
As for central banks, they are actually part of the state and will exist as long as the states themselves exist. No state will decide on the abolition of national central banks. We have no opportunity to influence this process.

[kissme09]

We do not need the central bank because with Crypto the exchange is its bank just it is accepted. Why do we need to create central banks and a third party can control everything? Everyone uses it because of anonymity, so we do not need the central bank.

[KingScorpio]

Shifting from Central Planning to a Decentralised Economy: Do we Need Central Banks?
by Professor Richard A. Werner, D.Phil. (Oxon)

I. The Central Bank Narrative

For more than the past four decades, public policy discourse, especially when touching on macroeconomic and monetary policy, has been dominated by the views held and actively sponsored by the central banks, particularly in Europe and North-America, as well as Japan.

Their policy narrative has been consistent over time and virtually identical between central banks, which is why I shall refer to it collectively as the ‘central bank narrative’. It has been mirrored in the type of economics that central bankers have supported and that has indeed subsequently become dominant in academia and among the economists selected as the experts of choice in the major newspapers and television channels: the theoreticians advancing neo-classical economics.

This central bank narrative (and hence also the dominant neo-classical economics, also known as ‘mainstream economics’) has at least five major pillars, which I shall list briefly:


The truth of the matter is: We don’t need central banks. Since 97% of the money supply is created by banks, the importance of central banks is far smaller than generally envisaged. Moreover, the kind of money that commercial banks create is not privileged at law. Legally, our money supply is simply private company credit, which can be created by any company, with or without banking license.

Eurozone countries, having given up the right to their own currencies, can still create money and reflate the economy: the government, for instance in Spain, simply needs to stop the issuance of government bonds, and fund the entire public sector borrowing requirement from the domestic banks that create it out of nothing – and can do so at more competitive rates as the bond markets: this policy of Enhanced Debt Management (Werner, 2014b) not only would make it obvious that Spain does not need the ECB, but it would also put the national debt profiteers – the bond underwriting firms such as Goldman Sachs and Morgan Stanley – out of business.

This reality of private money creation also means that we can, without legal obstacles, create a decentralized system of local currencies, without central bank involvement.

The key principle of such decentralization is local autonomy, self-determination, self-responsibility and self-administration. These are in fact the fundamental principles of the co-operative movement, as championed by Hermann Schultze-Delitzsch and Wilhelm Raiffeisen over 150 years ago. This co-operative movement early on realized that a crucial role for co-operatives is in the creation of co-operative banks controlled by the local communities. Sadly, in the UK credit unions are not banks, since they are not allowed to lend to firms in meaningful amounts, and don’t have a banking license. Thus we need to create true community banks.

Lord Action pointed out:

 

“It is easier to find people fit to govern themselves than people fit to govern others”.

 

“Towns were the nursery of freedom.”

 

The German banking system is dominated by 1,500 community banks, which are also the majority of banks in the entire EU. This means that 80% of German banks are not-for-profit, which has strengthened the German economy for the past 200 years. A banking system consisting of many small banks is also far less prone to boom-bust cycles and it creates more jobs per given amount of loan than large banks. Thus community banks also result in a more equal income and wealth distribution.

Local banking is highly popular in Germany, because SMEs get access to finance that would not be serviced by large banks. The community banks provide their services at competitive rates and support their customers also during recessions. With community banks, the wider community gets a bank whose goals are aligned with theirs, banks that pay taxes, banks that support local growth and jobs. At the same time community banks offer customers a place to put their money where it can benefit the local community, not far-flung projects or speculators.

Can we tackle this challenge?

Until the 1970s, there has been much optimism in economics and there have been high expectations that many of the problems of mankind would soon be solved.

Was this a reasonable expectation?

While it has not come true, it was a reasonable expectation. This is because

 

“Our problems are man-made, therefore they may be solved by man. And man can be as big as he wants. No problem of human destiny is beyond human beings”

John F. Kennedy

people know me in this forum of being against bitcoin, and the current state of the cryptoindustry, butregarding central banks i am same oppinion as most in this forum,

the problem with those central banks are that they are doing an absurd search, they are looking for the perfect americen/russian/chinese/chinese/german, etc.

thats absurd and causes a lot of problems, and economic issues, including poverty in a systematic way,

they are not looking for the most suitable person to constructively interact with his environment.

regards

[UmerIdrees]

Asking for Central Bank would defeat in no small measures the very purpose for the creation of Cryptocurrency .
Having a central bank, would give the government the power to manipulate the prices of various Cryptocurrency.
Cryptocurrencies are better off without any form of organized control.

Crypto currencies were made with a vision of decentralized access. Even exchanges like Binance are bringing decentralized platform for trading. So in such situation we do not support any thing which is centralized or controlled by specific people.

[jatin729]

Yes we must need central bank in order to regulate fiat currency, inflammation control, liquidity and supply of fiat. Central bank has authority over all banks inside the country if there is no centralised bank than system will become decentralised and there will no one to control interest rates, repo rate and others aspect that could be taken by central bank.

[Emilyp]

Let's not get overhead of ourselves in the euphoria of digital currency, central banks serve their purposes which cannot be eliminated because of the introduction of digital currency.

[abanansah]

Yes we need central banks to help control monetary and fiscal policies. Without central banks there will be chaos in the financial system and no one will oversea what happens to our finances.

[MMS2017]

Banks are playing a vital role in the whole market so we can not say that central banks are good and now a days the crypto is very irregular currency which has not central fixed price of it and not it has any other role but for the crypto market to recover to it's original position and banks are the part of now successful world and Central banks will check and balance over the crypto currencies.

[DigitalCyberius]

Well, some of the "Founding Fathers" of the United States, and several prominent men since then were not big fans of Central Banks, and in fact warned against the dangers of them. Of course, some of them were for such an institution as well. Some of the quotes are quite shocking:

http://educatorssite.com/?p=904

https://www.ign.com/boards/threads/our-founding-fathers-were-against-the-federal-reserve-and-central-banking-system.200768703/

Also been watching a fascinating video series by Mike Maloney, comparing Rome to the US as far as monetary policy, quite interesting "Hidden Secrets Of Money Ep #" on youtube, I started on video 9.

Have a great day,
The Cyberius team.

[Hustinog]

Well I guess not, and I guess yes. Not because I think that you don't need a central bank by yourself. But it is good and necessary for a nation. Yes because it is an indication of the unity of the state or the nation and all individuals who banks on the central bank will follow the same policy of banking. There are advantages if we use a central bank, an advantage for all and not just for yourself.

[gorodi]

In my opinion, we need the central bank to withdraw fiat money that we get from bitcoin. Requires a central bank because not all governments legalize bitcoin so that in using it for daily needs this central bank needs.

Yes, sure. There are very few places in the world (and not so many sites) where you can use Bitcoin and tokens. If we need money, we exchange the crypto, get fiat and deal with banks.

[saumang2m]

I think that every country should have a central bank. This leads to progress in the country. But if the central bank adopts Bitcoin, So it can be of great benefit to us.

[H1N1]

There are advantages and disadvantages if we have central banks in cryptocurrency world.
But i guess cryptocurrency main characteristic is decentralized, so central banks is not needed.
Maybe we can have decentralized banks of crypto in the future if cryptocurrency keep developing.

[sublime5447]

Shifting from Central Planning to a Decentralised Economy: Do we Need Central Banks?
by Professor Richard A. Werner, D.Phil. (Oxon)

I. The Central Bank Narrative

For more than the past four decades, public policy discourse, especially when touching on macroeconomic and monetary policy, has been dominated by the views held and actively sponsored by the central banks, particularly in Europe and North-America, as well as Japan.

Their policy narrative has been consistent over time and virtually identical between central banks, which is why I shall refer to it collectively as the ‘central bank narrative’. It has been mirrored in the type of economics that central bankers have supported and that has indeed subsequently become dominant in academia and among the economists selected as the experts of choice in the major newspapers and television channels: the theoreticians advancing neo-classical economics.

This central bank narrative (and hence also the dominant neo-classical economics, also known as ‘mainstream economics’) has at least five major pillars, which I shall list briefly:


The truth of the matter is: We don’t need central banks. Since 97% of the money supply is created by banks, the importance of central banks is far smaller than generally envisaged. Moreover, the kind of money that commercial banks create is not privileged at law. Legally, our money supply is simply private company credit, which can be created by any company, with or without banking license.

Eurozone countries, having given up the right to their own currencies, can still create money and reflate the economy: the government, for instance in Spain, simply needs to stop the issuance of government bonds, and fund the entire public sector borrowing requirement from the domestic banks that create it out of nothing – and can do so at more competitive rates as the bond markets: this policy of Enhanced Debt Management (Werner, 2014b) not only would make it obvious that Spain does not need the ECB, but it would also put the national debt profiteers – the bond underwriting firms such as Goldman Sachs and Morgan Stanley – out of business.

This reality of private money creation also means that we can, without legal obstacles, create a decentralized system of local currencies, without central bank involvement.

The key principle of such decentralization is local autonomy, self-determination, self-responsibility and self-administration. These are in fact the fundamental principles of the co-operative movement, as championed by Hermann Schultze-Delitzsch and Wilhelm Raiffeisen over 150 years ago. This co-operative movement early on realized that a crucial role for co-operatives is in the creation of co-operative banks controlled by the local communities. Sadly, in the UK credit unions are not banks, since they are not allowed to lend to firms in meaningful amounts, and don’t have a banking license. Thus we need to create true community banks.

Lord Action pointed out:

 

“It is easier to find people fit to govern themselves than people fit to govern others”.

 

“Towns were the nursery of freedom.”

 

The German banking system is dominated by 1,500 community banks, which are also the majority of banks in the entire EU. This means that 80% of German banks are not-for-profit, which has strengthened the German economy for the past 200 years. A banking system consisting of many small banks is also far less prone to boom-bust cycles and it creates more jobs per given amount of loan than large banks. Thus community banks also result in a more equal income and wealth distribution.

Local banking is highly popular in Germany, because SMEs get access to finance that would not be serviced by large banks. The community banks provide their services at competitive rates and support their customers also during recessions. With community banks, the wider community gets a bank whose goals are aligned with theirs, banks that pay taxes, banks that support local growth and jobs. At the same time community banks offer customers a place to put their money where it can benefit the local community, not far-flung projects or speculators.

Can we tackle this challenge?

Until the 1970s, there has been much optimism in economics and there have been high expectations that many of the problems of mankind would soon be solved.

Was this a reasonable expectation?

While it has not come true, it was a reasonable expectation. This is because

 

“Our problems are man-made, therefore they may be solved by man. And man can be as big as he wants. No problem of human destiny is beyond human beings”

John F. Kennedy

I think if this problem is regarding to the financial condition of a country, of course we need a central banks, because we need at least one institutions that can rule and make the law regarding to the financial system in order to make it equal and fair. But, if this case is for bitcoin i think we don't need a central banks. Because the initial goal of bitcoin is to make a decentralized system that based on freedom.

I agree with the comment from 135cc. In my opinion, the central bank has an important role in a country. Meanwhile in the other hand, bitcoin is not. Then in some countries, there are still many people unfamiliar to the cryptocurrency, especially bitcoin. To make people believe will take time too. Also most people don't even want to learn it. For now, fiat still occupies a position for transaction needs.