Oxymoron Thread: Actually, the more a currency bloc insists on digital the less likely it is to become or remain a reserve currency.(1/) #CBDC
@Halsrethink @DiMartinoBooth @nglinsman @AlessandroPonz4 @amlivemon @Trinhnomics @bondstrategist @RudyHavenstein https://twitter.com/novogratz/status/1335711950043537412

Reserves, i.e. currencies accounts between Central Banks, have been "Digital" since the Telex. "Digital Dominance", as in "We're enthusiastically adopting a Central Bank Digital Currency", is what happens to final savers.(2/)

Just to relate the Italian Experience, the highest level at which it was legal to transact without a traceable electronic form has alternated between 1.000 and 3.000 EUR. The correlation between #NIRP and #CBDC is therefore.... suspect.(3/)

In the end, this is neither a market necessity, nor a technological advance: Under PSD2 for example it's more exhausting to transact with a digital wallet than with a credit card for anything over 30 EUR.(4/)

So, #CBDC s are the latest consequence of the suppression of market forces by the selfsame central banks: outside regulated market FINANCIAL participant, few know what they are and even less people want it.(5/)

It is quite interesting that, while the possibility has not been ruled out, no Central Bank has actually stood firm on two things that make paper currency what it is:
1. self custody outside the system;
2. Unreported transactions.
(6/)

That smells of a coming Modi maneuver, and no amount of Chanel no.5 bar an irrevocable clause in central bank statutes will do. It also beckons Negative interest rates for the masses (A.k.a. "taxes"). https://bit.ly/2JyIAvq  (7/)

In any case, the US is in a very different position than other countries and it has much more to lose in implementing such a cockamamie scheme.
#USD cash, PAPER cash, has been the backbone of many parallel economies (one of the reasons Argentina lives on). (8/)

There, real estate transactions routinely involve a side part of USD cash changing hands. It might be immoral, but USD is also the only way to trade goods in Venezuela and other failed states. (9/)

In fact, China really HAS a shot at becoming the reserve currency in the same way it behaves on Climate Change: Fake adherence, let hapless westerners drink that koolaid, sell them the rope to hang themselves and then do the opposite. (end)