What do you think about a global electronic currency?

[Anderz]

19 hours ago, Leo Gura said:

Won't happen for a long time because every government needs the ability to print money to finance themselves.

To have a world currency will require having a world government, which won't happen in our lifetimes.

BitCoin is the closest thing. But it is already very heavily regulated by all governments precisely because they cannot print more of it.

I'm not so sure. China's e-yuan (DCEP) is already being tested. It may become a threat to the western powers who then quickly need to combat the threat and because of China's large first-mover advantage only a global digital currency will be able to replace DCEP.

My proposal is that IMF issues a global digital currency here called e-global and then each country tokenizes it into their own national currency such as e-dollar, e-euro, e-pound, e-yen and e-yuan. It's the same e-global so transactions and conversion can be done automatically between countries.

[Leo Gura]

@Anderz Pipe dreams

[Anderz]

@Leo Gura Governments are lusting after central bank digital currencies (CBDCs) not only for distributing helicopter money and giving access to the unbanked, but also to grab the power over money creation.

Today almost all money is created by the private banking sector through fractional reserve banking, often with zero reserve requirements. Governments today, including central banks, lack most of the power and control over the money creation.

China is the exception and is already steamrolling ahead with their CBDC. And the only way for the west to stop that avalanche is to implement a global digital currency that replaces China's CBDC.

[Anderz]

Simon Dixon has amazing knowledge about money. In this video he explains how money is created:

 

[Anderz]

A global digital currency is also a tool for international taxation. The G20 meetings in 2020 will likely include talks about international taxation and even e-money. Here is a recent report from OECD to the G20 Finance Ministers and Central Bank Governors:

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"In order for a jurisdiction to be considered to comply with respect to international tax transparency, it would need to meet the benchmarks of at least two of the three below-mentioned criteria. 1. The exchange of information on request (the EOIR standard): ... 2. The automatic exchange of information (the AEOI standard): ...

The BEPS Action Plan recognised that the international tax rules should be improved in order to put more emphasis on value creation in highly integrated groups, tackling the use of intangibles, risks, capital and other high-risk transactions to shift profits." - OECD Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors, July 2020

Automatic exchange of information, in relation to international taxation. The BEPS Action Plan I found described in another older OECD document:

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"As the economy became more globally integrated, so did corporations. Multi-national enterprises (MNE) now represent a large proportion of global GDP. ... 

These developments have opened up opportunities for MNEs to greatly minimise their tax burden. This has led to a tense situation in which citizens have become more sensitive to tax fairness issues. It has become a critical issue for all parties:

• Governments are harmed. Many governments have to cope with less revenue and a higher cost to ensure compliance. Moreover, Base Erosion and Profit Shifting (BEPS) undermines the integrity of the tax system, as the public, the media and some taxpayers deem reported low corporate taxes to be unfair. In developing countries, the lack of tax revenue leads to critical under-funding of public investment that could help promote economic growth. Overall resource allocation, affected by tax-motivated behaviour, is not optimal.
   
• Individual taxpayers are harmed. When tax rules permit businesses to reduce their tax burden by shifting their income away from jurisdictions where income producing activities are conducted, other taxpayers in that jurisdiction bear a greater share of the burden.
   
• Businesses are harmed. MNEs may face significant reputational risk if their effective tax rate is viewed as being too low. At the same time, different businesses may assess such risk differently, and failing to take advantage of legal opportunities to reduce an enterprise’s tax burden can put it at a competitive disadvantage. Similarly, corporations that operate only in domestic markets, including family-owned businesses or new innovative companies, have difficulty competing with MNEs that have the ability to shift their profits across borders to avoid or reduce tax. Fair competition is harmed by the distortions induced by BEPS." - OECD, Action Plan on Base Erosion and Profit Shifting

[Anderz]

The U.S. has a curious situation where the government has to get money from the Federal Reserve as loans and then pay interest. Simon Dixon said in the video below that today the amount of interest the U.S. government has to pay to the Federal Reserve is almost as much as all the tax incomes!

So for the U.S. it would be beneficial to have a global digital currency if the government is in control of the creation of e-dollar instead of the Federal Reserve. And I heard that the U.S. has veto power over IMF regulations, so if the IMF issues a global digital currency, the U.S. government will make sure that when the IMF currency is created as e-dollars it's the U.S. government who has the power and control over that money creation.