Citi Bank recommends UK create decentralised blockchain digital currency

Nice find by Coindesk, document from December 2014 recommends UK create its own crypto currency.

Citi: UK Government Should Create Own Digital Currency

Marting Armstrong would have a fit :wink:

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Automated Tax collection, State backed money (goodbye central banking), an international regulatory framework and the danger of losing key monetary metrics if currencies go dark.

From the report:

Government could experience, greater transparency at the transaction level by providing an immutable record of accounting, and ability to embed automated tax collection at the transaction level, enabling governments to decrease overhead and increase efficiency


Another option would be for the government to provide state-backed digital money for the benefit of, citizens, businesses, the government and the wider economy


Digital Money requires an international framework to regulate effectively


What risks do digital currencies pose to monetary and financial stability?

Digital currencies, despite price instability are managing to act as a store of value, albeit poorly. In cases where individuals choose to use digital currency in place of fiat currency for purchase of goods or remittance, information used to predict economic events is impacted.

Estimates on the velocity of money or monetary aggregates will lose accuracy as adoption of digital currency increases. Digital currency examples today are purposely built with their own formula for rate of creation and scarcity. This is intended to sidestep monetary policy mechanisms such as interest rate control and fractional reserve banking rules.

The risks include:

  • Price Volatility
  • Low Liquidity
  • Transaction Cost fluctuation
  • Loss of seignorage if digital currency originates from a non-governmental source.
  • Reduced visibility of financial activity
  • Reduced control over Money Supply
  • Reduced control over Interest Rates
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It going to happen, The difference will be it will be P2p between the banks and we be accessing our wallets on their servers. So it would be decentralized on centralized network between the banks.

I think it is great if they go down this line. They’ll find they’re standing on a giant sink hole.

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Looking at the CBs now, I really can’t tell the difference.

Me too, because that would be great for all non-gov cryptocurrencies.

Don’t think it will happen.

Mastercards latest idea will likely not make it as far as they expect, All they will be doing is allowing for easier access to bitcoin , allowing a more fluid and simple transaction into crypto currencies.

will they have charge backs? If charge backs happen then we will enter a new scam and fraud age that will make the scams on bitcoin look like baby mistakes.

The central banks and other big banks have for many many years wanted and have considered the idea of a cashless society , their opinion “if everyone uses their cards then every single transaction earns them fee’s and interest” they don’t make as much money with cash transactions, having the whole population stuck using the technology they massively over charge on is hugely beneficial to them and gives them even more central authority over everyone’s money.

The digital currency the government creates would most likely never be decentralized . a digital currency alone is a risk to people by those who wish to destroy it but not to the scale of a digital currency that a whole nation relies on. The risk vs reward paradigm gets turned on its head. The reward isn’t financial incentive, it’s the complete destruction of a nations currency and infrastructure. so the amount risk people are willing to take is greatly increased .

Only way to secure it’s value would be tying it directly to something physical, Gold , which would be just like we have done before, but isn’t really possible currently since we sold most of our gold to the Chinese at the bottom end of a gold price slump quite a few years back from a useless Prime minister at the time Gordon Brown.

Now we have David Cameron who believes end to end encryption should be stopped even after people expressly telling him companies require it to function securely.

I just don’t see it happening, It would be amazing if they did but it would be a completely warped and devoid of any of the original goals. I don’t think there is a single idea that once government tries to take care of it, they don’t completely screw it up and change everything good about it. It’s understandable thou , 200+ people looking over the creation of such a thing, all putting their opinions forward trying to appease the largest amount of people.

we even have this with maidsafe , within the first months of maidsafe forums existing, after the IPO. you get maidsafe introducing a completely unfiltered , unrestricted , anonymous new internet and you have people coming into the forums asking “how do we go about preventing and stopping all this stuff i don’t like from being on it”

If maidsafe was given to a random crowd of people to create it would be a network of cat pictures and other crypto coins blockchains , everything else would of been blocked and filtered out because someone doesn’t wanna see stuff like that.

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http://www.coindesk.com/will-the-new-uk-government-create-a-bitcoin-hub/

I found this an interesting read, it seems a UK digital currency is coming closer to reality. This does seem to be generally desired by businesses, some of whom are complaining that lack of regulation is "stifling growth and investment in this Market."
I personally think its a good thing and has always been rather inevitable.
I see it as a way to defeat tax evasion etc and we still have Safe to replace cash, which can’t really be touched.

All very positive. I wonder though if Osborne and the BoE can square a “light touch” welcome for cypto currency businesses with Cameron and May’s rhetoric over encryption and being able to read every form of communication. The conflict is not immediately obvious, but I think its there.

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I think it will do just fine; I mean, look at how great Auroracoin did!!!