Do governments need a Blockchain?

[goldkingcoiner]

Maybe they want to adopt transparency style that blockchain have by exposing database to public, but whatever they will use to create their CBDC it will be centralized blockchain as centralized as it gets.

Their blockchain could be a faux blockchain imitating real blockchain with sql stack. Anything could happen with government and their centralized stack, so whatever comes up later I wouldn't be surprised.
They could've deployed their CBDC in existing public blockchain with some smart contract modification but I guess that's too easy for them.

Assuming it is in the government's interest to adopt transparency into the whole scheme.

They want control and transparency of their citizens. But they will not be happy with introducing their own transparency to the public. How will tax money disappear into the wrong pockets? Blockchain would destroy their fiat scam. They need a way to be in control of the people as well as the money. With the latter being far more important to them.

[Emjay24]

It makes sense for the authorities to use blockchain. First of all, what is government? It is a heterogeneous organization with interest groups and lobbyists. The blockchain allows for full control over transactions. Among other things, monitor the transactions of your own officials and authorities, stop theft, misuse of money, etc. In addition, I believe a CBDC will be very different from cryptocurrency. The fact that the functionality will necessarily include the possibility of blocking and maybe even forced cancellation of transactions, as well as an adjustable emission function. That is, it will essentially be the same monetary system as it is now, but with enhanced transaction control.

CBDC is government owned, so you cannot expect any form of decentralization there. It's is not entirely different from cryptocurrency, after so, we've centralized shit crypto coins like Ethereum, this is more like a medium that the government exerts total control and over see citizens crypto activities by providing them the flexibility of using their own CBDC across the globe. They surely needs a Blockchain to achieve this very well, but since there's no transparency in government activities, they may as well not want to use a ledger accessible to the public and I don't think would want to be building their various CBDCs on the Blockchain since I believe it's only Bahamas Sand Dollar that is actually built on Blockchain as at now.

[redsun114]

Governments are keen on launching digital currencies of their own (aka CBDCs) in an effort to undermine Bitcoin.

CBDCs are not cryptocurrencies and they lack transparency, unlike how bitcoin is. In all the countries CBDCs have been created, they said they are not cryptocurrencies but they are built with the blockchain technology.

What I am seeing some countries looking for now are stable coins. Some countries prefer blockchain like BSC which I have read in the past. Maybe such countries will have their own blockchain in the future.

Actually mate, CBDC is a form of crypto too. It is because they share the same technology, you know the Blockchain. So they can in fact be transparent too. It is just that they are fully centralized, so may be manipulations can take place as well. In these kind of coins or tokens, freezing is so popular. But is freezing a kind of manipulation too? Hmm..

A lot of CBDC were now created but not too much for us to say all country has now their own CBDC. But once they do, they will also be proud to call it a crypto. It looks like they agree on the saying that ''if you can't beat them join them'' . BSC was once dominated the chain world but eventually many are now created and may offer better performance than it but yeah, I'm sure they are planning on creating their own chains too, in order to attain maximum control.

[Karl_3000]

Actually mate, CBDC is a form of crypto too. It is because they share the same technology, you know the Blockchain. So they can in fact be transparent too. It is just that they are fully centralized, so may be manipulations can take place as well. In these kind of coins or tokens, freezing is so popular. But is freezing a kind of manipulation too? Hmm..

Yes, they can be called cryptocurrencies but that is technically. Like I have explained before, they make use of blockchain technology but the government of all countries that have created them will make it bold to their citizens that it is not cryptocurrencies but it make use of blockchain technology. I explained that.

[TastyChillySauce00]

Assuming it is in the government's interest to adopt transparency into the whole scheme.

They want control and transparency of their citizens. But they will not be happy with introducing their own transparency to the public. How will tax money disappear into the wrong pockets? Blockchain would destroy their fiat scam. They need a way to be in control of the people as well as the money. With the latter being far more important to them.

Yep, it's always all about transparency of the citizens and not the government itself. If they applied the same blockchain principle to their governance, every bit of money would be traceable and the system itself will expose corruption.

Since it's CBDC and using their own centralized tech stack, almost guaranteed that government transaction will be excluded from the transparent database.
Exactly why i'm hopeless with CBDC and any of its implementation. The fact that CBDC exist in the first place, means they don't even want the inherent decentralized feature of the existing public chains because it's censorless.

[Perfectbaby]

If they are having this feeling and thought of having a blockchain to deploy the CBDC currency then fine would be fine at least to have a form of a generalized control and monitoring to know how the currency would be managed, but for  other currency to be merged or built to Bitcoin chain could cause another network congestion and may probably spike the charges when making transactions, so in my opinion it would be that nice to have their own blockchain which they would be able to monitor the total direction on the currency.

[savetheFORUM]

I think that the government might need a blockchain if they want to integrate decentralized finance in their economy. Using already built solutions like bitcoins might not be the right choice for them due to regulation. Bitcoins have already reached mass community and regulating all those privately held bitcoins will never be possible. I think this is the only reason why they can't trust the existing blockchain and are considering building one. If government wants a blockchain, they will always build one instead of using the existing ones as they have the necessary resources available at their convenience.

Governments would not just be looking for faster speeds but an advanced level of security which can be one of the most important reason behind building their own blockchain instead of using the existing one.

[Cookdata]

Governments are keen on launching digital currencies of their own (aka CBDCs) in an effort to undermine Bitcoin. There's a lot of "buzz" surrounding Blockchain tech these days. But due to the centralized (permissioned) design of CBDCs, there might be no need for a Blockchain after all. Governments can just use an ordinary database system that would serve as the "ledger" for their very own digital currency. Or they can make a partnership with existing payment companies (eg: VISA and Mastercard) to help deploy CBDCs. All without the need for a Blockchain.

I mean, what use would a private Blockchain network have? The real security benefits exist on permission-less blockchain networks. Not the other way around. Why not build their CBDCs on top of Bitcoin instead (like a sidechain)?

Thoughts?

Have you consider the cost, the consequences because till date most of the commercial banks doesn't make instant transfer between intra bank transactions and not because they can't do it but because they don't want to do it. Look at the lightening transaction platforms like zelle, cash app, there are much scams which the government can't control, launching a free will transaction medium that is very fast will give the government more insecurities they can't contain.

What about privacy, traditional banks likes transactions hidden, as much as I don't like the way the system operate, it's part of their policy to make sure customers transactions remain hidden from the public, making a block chain will be difficult but it's not like if they launch one it wouldn't make sense.e Let's assume they launch one, it will be used by the public but the government will not use it, each country loves to hide development from other countries. Imagine north Korea viewing us transactions on the block explorer. 

[Jatiluhung]

Actually, I think this is about how the government wants to avoid appearing too stubborn in the eyes of its people.or indirectly, the government acknowledges that sooner or later the public will demand transparency in transactions. So, whether they like it or not, they have to adopt blockchain. And the government also realizes that the use of digital currency can no longer be avoided in the future. The majority perhaps even the entire Generation Z and beyond will use digital payments more frequently. And the government is trying to make this a reality. They don’t want to lose out to all the existing cryptocurrencies. And clearly, they want to maintain control over the money supply. CBDC is just their way of entering the space and trying to attract the attention of all crypto users. But personally, I prefer this approach to having nothing at all.

[AmoreJaz]

I think that the government might need a blockchain if they want to integrate decentralized finance in their economy. Using already built solutions like bitcoins might not be the right choice for them due to regulation. Bitcoins have already reached mass community and regulating all those privately held bitcoins will never be possible. I think this is the only reason why they can't trust the existing blockchain and are considering building one. If government wants a blockchain, they will always build one instead of using the existing ones as they have the necessary resources available at their convenience.

Governments would not just be looking for faster speeds but an advanced level of security which can be one of the most important reason behind building their own blockchain instead of using the existing one.

They can use the blockchain, but it will be their digital currency. So this will enforce transparency among government transactions. Thus, they can really utilize the concept of blockchain in their financial transactions. This digital transaction can improve the transparency as well as the efficiency of their transactions. Thus, blockchain tech can be used in their financial sector and it is up to them how they will utilize in their financial transactions. As we've seen how this tech can be utilized in the payment scheme, there's nothing wrong if they will indeed integrate this tech in their financial aspect. As to the question if they need it? They may or may not. Because financial transactions can happen even without blockchain. But if they want to improve transparency and efficiency, I believe blockchain can help in that aim.

[Accardo]

If they are having this feeling and thought of having a blockchain to deploy the CBDC currency then fine would be fine at least to have a form of a generalized control and monitoring to know how the currency would be managed, but for  other currency to be merged or built to Bitcoin chain could cause another network congestion and may probably spike the charges when making transactions, so in my opinion it would be that nice to have their own blockchain which they would be able to monitor the total direction on the currency.

Merging the CBDC to the bitcoin blockchain would take away some government controls, and considering the uncertainty around the network, for now, on quantum threats, Soft Forks, and proposed hard forks, the Government would prefer working on their own blockchain, or merge with the Ethereum network or the Tron network, like the tether coins.

[dansus021]

In my opinion government just need more transparent about public funding and anything. So do gov need Blockchain? Yes for transparent use, so we can know where the money goes and this means people can do audit. There is no need built another Blockchain just use Blockchain that already exist.

CBDC is double edge sword in positive side we can know like my previous said where the money flow. But also they can control our money like freeze and anything

[Abiky]

It makes sense for the authorities to use blockchain. First of all, what is government? It is a heterogeneous organization with interest groups and lobbyists. The blockchain allows for full control over transactions. Among other things, monitor the transactions of your own officials and authorities, stop theft, misuse of money, etc. In addition, I believe a CBDC will be very different from cryptocurrency. The fact that the functionality will necessarily include the possibility of blocking and maybe even forced cancellation of transactions, as well as an adjustable emission function. That is, it will essentially be the same monetary system as it is now, but with enhanced transaction control.

Can't they use just a centralized database? Like MySQL, MongoDB, or MariaDB? There's no need for a Blockchain when the system you're planning to implement is centralized. Blockchain is all about being permission-less. That's its main feature. The security benefits are lost when it becomes centralized. Databases can run just fine for a CBDC system. Especially if there's no need for consensus.

So I don't get what all of the "buzz" is, when governments really don't need a Blockchain. The hype has gone too far, that now everyone wants to use Blockchain for everything. Like an All-in-one solution for the world's problems. China has its own CBDC, but I don't think it makes use of a Blockchain. Why would it? They're better off using an existing Blockchain network (public chain) than making their own from scratch. Only if they decide to embrace Blockchain tech for their very own CBDCs. Just my two sats.

[free-bit.co.in]

No matter how many governments launch their own digital currencies, they will never be able to defeat decentralized Bitcoin. Even if the government creates a digital currency using blockchain technology, people will still chase Bitcoin for financial freedom, and then Bitcoin will gain much more popularity. When the government launches a digital currency, the general public of the country will learn about digital currencies, even if only to accept it, and when they learn about digital currencies, the real benefits of Bitcoin will be revealed to them, and more people will express interest in accepting Bitcoin.

Do you and the OP have any evidence to suggest that the government is trying to issue CBDC or its own digital currencies to compete with or undermine Bitcoin? Because if they really wanted to defeat and eliminate bitcoin, they would not have legalized it and then gone to the trouble of competing with it.

Honestly, I think we are exaggerating about bitcoin and somewhat delusional in assuming that government are afraid of it. The government may not completely eliminate bitcoin, but if they wanted to curb its popularity and growth, it would not be difficult.

With just a series of harsh regulations and bans, the popularity of Bitcoin would slow down immediately. Do not underestimate the government, because they are the ones who hold the power.

[Abiky]

Do you and the OP have any evidence to suggest that the government is trying to issue CBDC or its own digital currencies to compete with or undermine Bitcoin? Because if they really wanted to defeat and eliminate bitcoin, they would not have legalized it and then gone to the trouble of competing with it.

Honestly, I think we are exaggerating about bitcoin and somewhat delusional in assuming that government are afraid of it. The government may not completely eliminate bitcoin, but if they wanted to curb its popularity and growth, it would not be difficult.

With just a series of harsh regulations and bans, the popularity of Bitcoin would slow down immediately. Do not underestimate the government, because they are the ones who hold the power.

If it wasn't about competition, then why bother creating a digital currency of their own? Governments could've just "sticked" with cash (coins and paper money) and plastic cards (credit/debit). But seeing them so keen on releasing their very own CBDCs, tell us they have malicious intentions behind. It's all about power/control. They're only embracing Bitcoin and crypto because of the taxation benefits they provide. Not because governments are "okay" with this. Especially when it comes to decentralized money they can't get their hands on.

Ultimately, governments will stricken regulations to a point where crypto's growth will diminish. I mean, crypto will still be around, but it won't be as "fun" or "exciting" as it was back then. Personally, I don't think governments need a Blockchain. But if they do, we should expect the system to be highly-permissioned and "closed" by design. By all means, we should be prepared for the worst. Just my two sats.

[Pablo-wood]

I think why CBDC are created based on Blockchain technology is just to eliminate  credit risk while maintaining their full control through regulations from central banks. Blockchain is just for transparency and not ownership in government issued CBDC. It's just a means to eliminate commercial bank in the meddling of money exchange such that they are directly claimed through central banks.

Can't they use just a centralized database? Like MySQL, MongoDB, or MariaDB? There's no need for a Blockchain when the system you're planning to implement is centralized. Blockchain is all about being permission-less. That's its main feature. The security benefits are lost when it becomes centralized. Databases can run just fine for a CBDC system. Especially if there's no need for consensus.

My thoughts though. I am thinking the reason for using Blockchain instead of the regular centralised database is just to eliminate banks while maintaining a transparent transaction history. It will be difficult keeping records on a regular database of there is no financial bank to manage accounts. But with Blockchain the central bank an keep a clean record of every transaction made. Even though everything is centralised.

[free-bit.co.in]

If it wasn't about competition, then why bother creating a digital currency of their own? Governments could've just "sticked" with cash (coins and paper money) and plastic cards (credit/debit). But seeing them so keen on releasing their very own CBDCs, tell us they have malicious intentions behind.

The world is evolving and moving towards a fully digitized world. With the rise of AI, blockchain, and everything gradually shifting online. You expect bank to stick to their old model, is not that a bit selfish?

If they do not upgrade and innovate, we will assume they are outdated and obsolete. If they integrate and apply technology and innovation, we think they have bad intention. Do we really need to be so selfish, suspicious, and always think badly of them?

[X-ray]

If it wasn't about competition, then why bother creating a digital currency of their own? Governments could've just "sticked" with cash (coins and paper money) and plastic cards (credit/debit). But seeing them so keen on releasing their very own CBDCs, tell us they have malicious intentions behind.

The world is evolving and moving towards a fully digitized world. With the rise of AI, blockchain, and everything gradually shifting online. You expect bank to stick to their old model, is not that a bit selfish?

If they do not upgrade and innovate, we will assume they are outdated and obsolete. If they integrate and apply technology and innovation, we think they have bad intention. Do we really need to be so selfish, suspicious, and always think badly of them?

Banks are already innovating by including blockchain in their infrastructure. It's starting with the goliath like Visa and soon enough banks will accept stablecoin and finally true crypto like bitcoin and acts like a custody to take care of your asset.

CBDC is just one thing, the most concerning thing is when bank hold majority of crypto in their custody.

Anyway, I can't hardly see how CBDC gonna disrupt current crypto that we have.

[Somegory]

The government can do without the Blockchain, they already have everything they wanted or everything they want to build, the only reason why the government are now showing interest is because of the people.

People shows more interest in Blockchain and money are been made on the Blockchain that even the government are noticing it, they only want the piece of that pie, it's why Trump and his family are here too.

Every single play that Trump pulled was about making more money for his family, they are one of the biggest profit maker in this last bull market.

[Abiky]

The government can do without the Blockchain, they already have everything they wanted or everything they want to build, the only reason why the government are now showing interest is because of the people.

People shows more interest in Blockchain and money are been made on the Blockchain that even the government are noticing it, they only want the piece of that pie, it's why Trump and his family are here too.

Every single play that Trump pulled was about making more money for his family, they are one of the biggest profit maker in this last bull market.

You mean like the "World Liberty Financial" project? Trump and his family pulled it off big time, as they got richer, while investors got "rekt". There's an infamous lawsuit led by Tron founder, Justin Sun. While the odds of him winning are slim, you can see how governments take advantage of crypto's popularity for their own benefit (in this case, the Trump administration in the US).

Governments are just playing us. They're not really interested in Blockchain. They just want to collect as much taxes as possible, before they ultimately launch CBDCs to the public. Once that part's done, we can say bye-bye to mainstream use of crypto for good. I mean, crypto will still exist due to its decentralized nature. But it will be "illegal" for anyone to use it. At such point, why bother supporting crypto at all?