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Comment by canoebuilder | Hacker News Reader

Bitcoin, et al. seek to approximate a monetary system, to bootstrap a workable currency outside the traditional trappings of a centralized state. Being digital is not the point, it just makes the idea possible whether or not it works in practice.

What exactly would a central bank “digital currency” bring to the table?

Dollars, pounds, yen, are already digital.

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The change here, from what I can tell, is that you could have consumers directly dealing with the central bank, holding accounts directly with it, cutting out the traditional retail banks.

I'm not sure one way or another if that's a good idea, and I guess they aren't either, hence the forming a committee to investigate.

This process of cutting out traditional retail banks destroys liquidity, which the central bank knows it would probably have to offset through either becoming an explicit uncollateralised lender to banks or other monetary policy. They are likely to be very conservative about that.

Indeed, that's the biggest change I could think of. Another, minor but important, change is CBDC will completely eliminate physical cash. How will that pan out is to be seen.

FWIW, China has been the farthest on this path to the extent that they are claiming they will do a 100% rollout by next year's Winter Olympics.

This is a really interesting phase in this space.

If a business wants to hold cash outside of a bank, it has to use bank notes. This would give them the option of holding digital currency directly.

Also you'd expect a ground up design of a digital first currency to include much lower cost of transfers enabling micro transactions and much better speed to settle.

This can be achieved while retaining the existing banking system.

https://nppa.com.au/the-platform/

It is a headache for banks, as they lose some of the rents (all kinds of public funds going through them). This should have no impact on cryptocurrencies.

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