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Bank for central banks admits decentralised cryptocurrencies are a pretty good idea

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I'm somewhat confused.

Surely, the usual banks already offer and transact in "digital cash", online transactions, debit cards, standing orders etc? Denominated in GBP. US $, Euro's , Yen etc

Granted, they are not cryptocurrencies backed by blockchains.

Apple Pay, Paypal etc, aren't they also "digital cash"? Being ignorant of these, does Apple process all transactions themselves or is each and every one processed through a normal bank?

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Re: I'm somewhat confused.

To use Apple Pay you scan a credit/debit card with your phone, it reads the numbers, contacts the bank, uses the numbers to generate an anonymous stand-in number so your real card number is never passed to merchants (and presumably in there somewhere is a step where Apple and/or the bank determines whether you are the proper owner of that card)

Then the transactions are processed as normal, using that other number instead of the one on the card. Apple isn't a "bank", it is just facilitating transactions. Though given that they have $260 billion in cash socked away, maybe they should consider becoming a bank!

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Re: I'm somewhat confused.

Cash has the property that it doesn't leave an audit trail.

If you buy stuff from, say, Tesco and pay with cash (notes/coins) they record the transaction for financial purposes, they record the items for stock control, but they cannot record who paid for it (unless you also present your Club Card).

If you buy stuff from, say, Tesco and pay with debit card, credit card, cheque, or similar, they record who paid for it even if you don't present your Club Card.

Cash is essentially anonymous. Yes, it's possible to record serial numbers of notes and perhaps get some sort of trail, but it's a lot of work so used only in cases of serious crime (supposedly).

Apple Pay, Paypal, etc. do not give anonymity. There may be some steps taken to (try to) ensure security, but not anonymity: there's a trail showing that debit card X paid Y pounds for product Z from supplier W. They're not cash, just another way of conducting a debit/credit card transaction. Even if you use a debit card to put beer tokens into your Paypal account then weeks later use those beer tokens to buy something on Fleabay, there's a trail that wouldn't happen with cash.

Note that cryptocurrencies are not perfectly anonymous, just as cash isn't. With enough monitoring in place you may be able to figure things out. But cryptocurrencies are a lot closer to being "cash" than Paypal is.

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Anonymous Coward

Re: I'm somewhat confused.

These supermarkets also offer awards point which can be used to buy catalog items or used to offset the shopping bill as well as transferred between accounts. I once had to buy a weeks shopping using nothing but awards points.

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Big Brother

Privacy?

Why wouldn't you want the government to know where every penny you spend goes? What are you trying to hide?

/s

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Anonymous Coward

Fraud?

How much fraud and corruption did the UK Banks commit and get away with it? Ironic springs to mind that they want to monitor this.

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I thought several banks were already working with or experimenting with Ripple.

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