The Central Digital currencies will make monetary policy more difficult

[Darker45]

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

Did you by any chance read such a troubling feature in any of the developing CBDCs right now? Or is this something you merely suspect would happen with the new government digital currencies?

Personally, I don't find any reason why any individual is given the special chance to have a direct central bank account. Also, it is next to impossible to kill intermediaries for so many reasons. In the first place, the central bank has no say in terms of how money is to be distributed. Secondly, intermediary banks have lots of roles to play in the day-to-day financial life of people. Furthermore, you cannot make the likes of JPMorgan, Wells Fargo, Citibank, Bank of America, and others irrelevant.

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If banks can continue to restrict their customers and charge for money transfer services, then a CBDC really provides no benefit over the current system.

In all those papers that highlight the advantage of CBC you will always efficiency mentioned, lowers cost or lower fees when it comes to usage, but never zero costs. Also, there was never claimed that those stable state coins could be used by an individual without a 3rd party being involved, for the average Joe, the only end result might be lower fees when it comes to payments and that's pretty much all that we will gain from it.

The authorities will have complete control, they could track your payments, your balance, they could revert any payment with ease even if it's between banks, there will be no more tax avoidance and many more. The benefits are there, it's just that we're not the ones benefiting.

[Argoo]

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

If we use the digitized currencies of the central banks of states, this does not mean at all that we will get rid of intermediaries. The intermediary in their use will always be the same central banks or their subordinate banks, which will see and control any of our transactions.
However, the very introduction of digitized currencies of the central banks of states is progressive for states, the financial system and participants in this market. In terms of efficiency, stable coins of states are much higher than ordinary non-cash payments.

[Rruchi man]

CBDCs are meant to compliment cash not replace it. What this means is that  CBDCs  could serve as  a  complementary  means of  payment  that  addresse  market  failures. In addition, there's a massive likelihood that it will  help to speed up the continuous innovation  and  competition  in payments, finance  and  commerce.

Therefore, CBDC s must be designed in such a way as not to topple commercial banks.

[kryptqnick]

I used to think the way op does. It seems logical that if a state creates its own digital currency, it's done to provide an alternative to decentralized cryptos for its citizens, and then restrict the usage of true cryptos. However, as I've seen Ukraine's roadmap on crypto adoption which plans both to issue a digital currency and allow using Bitcoin for payments and trading, it seems that the intention of issuing a digital currency doesn't always lead to tough regulations. The policy wasn't implemented yet, so it might not work out, but it's hypothetically possible for digital currencies to coexist peacefully with cryptos.

[oHnK]

I dont think so, as the regulator even if they created CBDC as a respond for existance of Crypto especially for BTC they still keep their positioning in monetary regulator. They will keep CBDC to be centralized and will be covered by decentralized design. This is just manipulated the market, they dont want crypto take revolution for new financial system. 

[jrrsparkles]

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

Will make the things easier for the government to do anything what they wanted with the money and controlling power also will increase multiple times compared to digital fiat because government is going to take Direct control with centralized cryptocurrency. Anyway the idea is going to remain the same, they just want you to keep their citizens poor.

[Coyster]

CBDCs are meant to compliment cash not replace it. What this means is that  CBDCs  could serve as  a  complementary  means of  payment  that  addresse  market  failures. In addition, there's a massive likelihood that it will  help to speed up the continuous innovation  and  competition  in payments, finance  and  commerce.

I second the first part of your post as I believe CBDC's aren't going to be launched in reaction to fiat currencies or to do away with paper money, they both will function in the same way, just one will be digital, whilst the other will be in paper form, they'll coexist with each other without much fuss cause the government controls the both of them, and that's exactly how they want it.

Having said that, I don't really believe CBDC's are being created cause of the desire for innovation, I believe this ideology is more directed towards competition, first competition against other economies launching CBDC's as well (like China v U.S.), and then competition against Bitcoin, though that's erroneous on the part of the government as Bitcoin is decentralized and operates differently from Bitcoin. Tbh, I don't really fancy the idea of CBDC's, most of the latest regulations and sanctions against Bitcoin is just to pave way for CBDC's. The thing is, the government would understand that in the long run Bitcoin wouldn't really be affected by most of their shady and selfish moves.

[XUNing]

The digital currency issued by the central bank is still centralized, and it is supervised by the government. The government has complete control and can monitor bank accounts through the banking system.
But the issuance of digital currency may also promote the growth of the currency economy. People learn about the concept of digital currency and blockchain, and increase their awareness of this new thing, thereby attracting more people to invest in it.

[Ayiranorea]

Monetary Policy needs to have control over the money supply as well as needs to support the economic growth. With the term central digital currency, it means they're are controlled by an authority. Someone please clarify it for me, if we're talking about the decentralized crypto then it'll be difficult for the government to make plans on emergency. Central digital currencies are being developed by the countries itself.

[guydin]

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

I don't believe in any digital state currencies. They will still be regulated by the government. The main feature of digital money is decentralisation and uncontrollability from authorities, but digital euros, rubles, yuan will be under control, so it is the same as just non-cash money but on blockchain instead of bank account. And I don’t understand why you think that it  will be impossible for the government to print money, it will also be easy for them.

[Argoo]

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

The digitized currencies of the central banks of states are so called because they are issued by the central bank and all transactions will be under their control. Banks in this case will act as intermediaries and will be able to suspend or cancel any transaction.
Therefore, I do not think that the use of this digitized currency will complicate the work of the banking system. On the contrary, it will work more efficiently when using blockchain technology.

[davis196]

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

I don't really think that the central bank digital currencies will make banks obsolete.
Someone will have to evaluate the customers,who want to borrow money.
The monetary policy of the big central banks is getting less and less effective mostly because of the negative interest rates and the increasing levels of globalization.
I don't think that fractional reserve banking will disappear due to CBDCs.Fractional reserve banking can be done with digital currencies."Money printing" can also be done with CBDCs.
I also think that "skipping the intermediaries",like you said,can have more pros than cons,but we still don't know what will happen.
What I don't like about CBDCs is that they are trying to imitate cryptocurrencies.

[Kong Hey Pakboy]

That's it's just the start, these people don't exactly know yet what exactly they should do before putting some sort of regulation on cryptocurrency and I don't think that we will ever see a good regulation this year for cryptocurrency because there's still a lot of things that these government have to learn and understand.

[MoneyJ]

That's it's just the start, these people don't exactly know yet what exactly they should do before putting some sort of regulation on cryptocurrency and I don't think that we will ever see a good regulation this year for cryptocurrency because there's still a lot of things that these government have to learn and understand.

Digital currencies are inevitable but I truly agree with your sentiment. Most people in regulation sectors don't even know the fundamentals of cryptocurrency. Monetary policies have to be amended but would take herculean effort from the crypto community to lobby this in favor or just regulating but not halting the progressions or tax it heavily.

[TheGreatPython]

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

Sorry, I could not get your point; how CBDC will skip intermediaries but traditional fiat in electronic format will not? I mean in my understanding, all CBDCs are just digital version of what we have today in the name of fiats. So, could you explain more on by intermediaries, whom you are referring; which definitely will help me to interpret your point in more better way.

The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

That is the old problem of our governments and I guess that will not intensify just because of adoption of central digital currencies. I mean governments will keep printing more than their reserves even they delay adopting CBDC.

[sapnu]

When a crisis arrives, central banks usually say that they will do whatever it takes to solve it, which usually means ridiculous amounts of money being printed a large amount of debt being bought. The traditional banking system "multiplies" the effect as a result of the fiduciary system (you can lend more than you have).

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries. I think that this will have a negative effect on the ability to cope with further crisis by monetary policies. The risk should not be ignored.

Maybe some of us would think that it will somehow destroy the balance which will lead to having monetary policies getting messed up more. Banks, regardless if it is fiat or digital state currency, will still be under the government's control which means it is far from becoming a recognized cryptocurrency. We can call it digital money hence it is not the same with cryptocurrency. On the other hand, the imbalance caused by the innovation in the monetary system will surely face crisis at the beginning but sooner or later, things will get settled down and the balance will return as well as the peace with regards to the issue.

[Ozero]

With the new digital central currencies such as yuan, euro, dollar,... anyone could potentially hold an account on a central bank skipping the intermediaries.

not at all. there won't be even a tiny bit of difference between any new digital (crypto) currencies and the existing digital currencies run by the banking system. even the same laws would apply including the KYCs and who can and who can't open an account.

I do not think that the digitized currencies of the central banks of the states will somehow complicate their monetary policy. On the contrary, their digitized currencies will be more efficient in everything and the current global financial system will only benefit from this.
Stable coins of states will actually not differ from their usual currencies, including in terms of centralization. Digitized currencies will also be strictly regulated by central banks and, if necessary, digitized accounts will be blocked. There will be work efficiency, but nothing else will change.

[semobo]

It will make more easier for them in my opinion because the name of such tokens are CBDC means Central bank has the complete control and completely digitized money so they can print money simply and liquidate them into the people via banks but CBDC isn't supported by the most of the governments yet and I hope they won't because it will result into uncontrollable inflation rate at the time of economic crisis.

[palle11]

It will make more easier for them in my opinion because the name of such tokens are CBDC means Central bank has the complete control and completely digitized money so they can print money simply and liquidate them into the people via banks but CBDC isn't supported by the most of the governments yet and I hope they won't because it will result into uncontrollable inflation rate at the time of economic crisis.

It is not that factual to say that CBDC will lead to uncontrollable inflation. That can happen because the government don't really keep checks on what they should do or what they need to do. Even fiat should lead to uncontrollable inflation if the government knows exactly how to go about controlling it so likewise the challenges of fiat may happen to CBDC and not just because it is digital currency then it is bad and will be facing uncontrollable inflation, the challenge is with government that don't do proper diligent work on her agencies in charge of different duties.