More News, Rumors and Opinions Saturday Night 3-13-2021
KTFA:
Samson: Who needs a digital dollar?
11th March, 2021
The idea of a digital dollar has been on the horizon for a while. More recently, the idea was floated by US Treasury Secretary Janet Yellen and Federal Reserve Chairman Jay Powell.
At an event in February, Yellen referred to the idea as "totally worth considering," adding that the Boston Federal Reserve, in conjunction with academics at MIT, was already doing so. In testimony he gave to Congress the next day, Powell described the digital dollar as "a high priority project for us."
Some argue that this is another front in the technological cold war between the United States and China. The People's Bank of China will almost certainly be the first major central bank to introduce a digital currency in 2022, at the latest. If the United States does not act quickly, it will be left behind. And the American financial system will remain stuck in the twentieth century, which will harm the competitiveness of the United States. The dollar’s status as the dominant international currency will decline due to the ease of use of the Chinese digital unit in cross-border transactions, and the US will waste a unique source of financial and monetary strength.
In fact, these concerns are either exaggerated or completely false. The main impetus behind the issuance of the "Renminbi" digital currency by the People's Bank of China is to create a government-controlled alternative to two very large and weakly regulated platforms through which digital payments are made, namely "Alipay" and "WeChat-Pay".
The ubiquity of Alipay and WeChat-Pay raises the specter of Chinese authorities losing control of payments flows through the economy. Because it uses information about payments to guide its lending activities, its ubiquity indicates the possibility that authorities will lose control of financial flows, and credit allocations in general. Hence, the PBOC's determination to issue a digital currency is an integral part of the Chinese government's decision last November to cancel the initial public offering of Ant Group, the parent company of Alipay.
The US government does not have similar concerns. In the United States, dozens of different platforms, such as PayPal, Stripe and Square, conduct electronic payments, which are ultimately settled by banks, and then, through FedWire, the internal system of the Federal Reserve. To settle transactions between banks. Visa, MasterCard, Discover, and American Express process the lion’s share of electronic card payments, but their physical cards are issued by banks, which are subject to regulation, which limits the risks to payments and the financial system. And these operations are also subject to settlement by "FedWire".
Also, it is important to bear in mind the extent to which the "renminbi" lags behind the dollar as an international currency. Currently, the Chinese currency accounts for only 2% of global cross-border payments, a tiny share compared to 38% for the dollar.
The ease of dealing with the "renminbi" digital currency will certainly speed up its use in cross-border transactions. But this digital currency may also have a secret function that enables Chinese authorities to track transactions and identify who is doing them, thus discouraging its use by third parties. From this perspective, it is difficult to consider the Chinese digital currency as a game-changer at the international level.
So, the decision to offer a digital dollar must be justified for other reasons. The strongest justification is financial inclusion. Americans who do not have credit cards and bank accounts, and who depend entirely on cash transactions, are deprived not only of financial services, but also of other services. As Rideshare companies require you to link your app to your credit or debit card; If you do not have a card, you will not receive the money. If you do not have a bank account, you will not get a card.
In this context, he recalls the difficulty that the US Treasury Department faced in providing checks for epidemic relief to those without bank accounts. If everyone had a Federal Reserve electronic wallet in which digital dollars could be deposited, that problem would be solved.
Digital dollars can also tackle the prohibitive cost of cross-border money transfers. But foreign governments may be reluctant to allow their citizens to install a digital wallet for the Federal Reserve, as that would make them and their central banks unable to impose capital controls, which they view as holistic prudential tools. Alternatively, a Federal Reserve digital wallet could be made interoperable with foreign digital wallets. But interoperability requires close cooperation between central banks on the details of technology and security. While there are efforts in this direction, making them successful will be a daunting task, to say the least.
Ultimately, these benefits must be weighed against the costs and risks of digitizing the dollar. If people transfer their savings from banks to digital wallets, the banks' ability to lend will falter. Some banks will close, and the smaller companies that depend on banks for credit will have to look elsewhere. Moreover, the retail payment network managed by the Fed will be an important target for hackers and digital terrorists.
Security and financial stability are essential, and it is not clear that they can be guaranteed. All this means that although the issue of the digital dollar may be worth considering by Yellen and Powell, it is not so easy. LINK
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DeepWoodz: Imo...Question.....If the rate returning to the glory days of $3+ will be beneficial to the entire Iraqi economy and all the citizens,,,,, why do all the economists and politicians and specialists and professional accounting types in Iraq appear to have no clue about it?
17 plus years at a program rate of 1/1200 of a dollar, and now 3 plus months at 1/1450 of a dollar and all they can imagine is going back to the glory days of 1190!!!
Now Monday is supposed to be the day. I for one will be waiting for the smoke to clear and watching closely for the RUBBER TO HIT THE PAVEMENT. GOING TO BE VERY INTERESTING.
Trevor: kinda why i dont get how people read these articles and say it will go 1:1 when it says 1200
Ross: Continuing the discussion from 3/12 I have always heard that they cannot go international at a program rate...1,200 is still a program rate. Regardless if other countries have low rates they are not at a program rate. IMO the IMF has not invested the time and energy just to go back to where they were for the past 20 years. Also the NSCN's are absolutely worthless any rate less than 1:1 IMO.
IMOO the reason the articles have been either misleading, inaccurate are missing regarding a new rate is for the purpose if keeping the new rate hidden to the extent possible until the moment of the great reveal. I put my bets down on the inside info we get from Mr. Frank and Sir WS and with the encouraging analysis of MM. Tomorrow could be exciting and if not then the rest of the month is still IMO in the near proximal future. Revealing the NSCN IMOO may take place simultaneously with the rate change.
Bambe: IMO...TAKE 1200 and mooove that decimal to the left 3 places ( removing the three zeroes) ...then you have a DIGITAL RATE of 1.20...NICE NICE IMO...
FromBelgium: One thing is clear: if there are indeed NSCN's coming out - and definitely if they are already in the ATM's- then there is no doubt that the value has to go up. It would be utterly stupid to come out with small notes if still working with that low rate... IMO I have a gut feeling that we are indeed coming at the end of the ordeal. As said before, I wouldn't mind it going either way...to finally know 100% what the outcome is, will be so liberating! IMO
Solorat: Imo, We’ve all been waiting a long time. And I for 1 think this coming week is going to be Electric. The place we all wanted to be when we first bought our Dinar. I believe this is it, no more program rate, no more zeros, no more delays for any reason. Just the TIME TO RI. TIME TO BREATHE!!! WHAT A JOURNEY! IMO can I get a AMEN
Courtesy of Dinar Guru
Jeff The CBI will never ever tell you when they're going to revalue the currency. Nor will they ever tell you what the value of the currency is going to be. Has the CBI ever given their preferred ideal time frame when they would like to change the value of the currency? The answer is yes...at the beginning of a fiscal period. Second, you can not research Iraq's fiscal year on the internet...I have consulted with Iraq's government...Iraq's budget is April through March of the following year...when you look at historical action it's real easy to piece it together. That means they're pretty much going to change the rate most likely in late March exactly how Kuwait did...
Jeff December 20th they devalued the currency. That was the launch and implementation of the reforms. That was nothing more than a 90-day tool in preparation for the rate change to withdraw and bring in 3-zero notes from the citizens and within the country of Iraq . So Iraq has already technically started and have implemented the reforms by devaluing their currency...March 21st is a holiday we're looking for. It's the same exact historical Sunday when Kuwait changed the value of their currency in '91...that's our best guess as to when the rate's going to change...
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(2/13) REAL IRAQ NEWS
Mar 13, 2021