"There are those among us who like the idea of swiping and tapping their way through life, armed with a lifetime of digital information as they enter buildings, book online appointments and take train rides to work. Others are not so keen, fearing that big brother databases chock full of personal details will one day control their movements, if that is not happening already."
"In the case of cryptocurrencies, and even their nicer sounding cousins stablecoins the potential for users to be tracked and traced is writ large, with the added prospect of a shift to digital money leading to unemployment-inducing financial crashes even more frequently than in the past. All the big financial centres, including London, have begun passing laws and consulting on rules to govern a future that is lubricated by digital money, pushing cash very much to one side."
"A stablecoin, like the name suggests, is a type of cryptocurrency that is supposed to have a stable value, such as US$1 per token. How they achieve that varies: the largest, such as tether and USD Coin, are effectively banks. They hold large reserves in cash, liquid assets, and other investments, and simply use those reserves to maintain a stable price. Others, known as "algorithmic stablecoins", attempt to do the same thing but without any reserves. They have been criticised as effectively being backed by Ponzi schemes, since they require continuous inflows of cash to ensure they don't collapse."
Some people welcome swiping and tapping through daily life, using lifelong digital records for access, appointments, and travel. Others fear extensive databases will enable surveillance and control. Cryptocurrencies and stablecoins allow user tracking and could exacerbate financial volatility, potentially causing more frequent, unemployment-inducing crashes. Major financial centers are passing laws and consulting on rules to prioritize digital money over cash. Bank of England officials seek to facilitate competing stablecoins within a robust regulatory regime while keeping a central bank digital currency as an option. Stablecoins vary: reserve-backed ones mirror banks, while algorithmic variants lack reserves and face Ponzi-like criticism.
Read at www.theguardian.com
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