I invite Marxmailers and PEN-L'ers to check out the discussion, which for my money (pun intended) is about as interesting as any I have seen on a website in many a day. Although it is fairly technical and involves contributions from IT professionals, it is very useful in terms of coming to grips with the technical obstacles to a quick exit from the eurozone. I understand that many leftists feel that alluding to such problems is a red herring and a concession to TINA but you at least have to be aware that they exist. In this exchange, someone proposes a kind of Bitcoin solution and a Naked Capitalism editor named Clive who has many years experience in IT explains why it is not feasible.
http://www.nakedcapitalism.com/2015/07/more-on-the-it-implications-of-a-grexit.html#comments Michael Clancy July 29, 2015 at 11:44 pm An immediate change to the drachma isn’t needed when a neutral ‘digital cash’, that acts as global trading currency, can be implemented within several months. The brick and mortar businesses can act as the ATM for their own benefit to receive euros in exchange for digital cash with no fees involved for either party. The people of Greece have mobiles so they are not separated from the world. It seems everyone is going around some of the issues like allowing the people of Greece to start correcting the economy from within their own environment, they can get some traction organically without any cost – the other issues can keep going for years. There is more to what I’m adding here but it pains me to read some of the comments. An economic system has been developed over several years to avoid such issues that Greece is going through. An intro to it can be seen here http://qwickpic.com It’s been tested with billion dollar processes during some live processes before being placed hiatus to expand it more. I maybe sticking my nose in here but wanted to add something to the issues. Clive July 30, 2015 at 8:26 am Your suggestions fall into the basic, broad category of “a digital currency would solve most, if not all, of the problems which Greece would face if it exited the euro”. The main issue with your suggestion is that it confuses two things which sound similar (a digital currency which you’re viewing like an alternative to physical notes and coins but which you envisage operating in the same way as the existing card payments networks because transactions are electronic and don’t require the exchange of a physical token like cash) and the function of the existing card payments networks themselves, which is to facilitate payments. It is important when analysing what might be feasible should Greece end up leaving the Eurozone to consider both needs (the need for a currency in circulation to replace the euro which for the sake of convenience I’ll refer to the drachma from here on in and the payments networks which would have to be adapted to cope with the new currency) separately. If you roll out a drachma as a replacement for the euro to meet the need for a new currency, you can as you say use some form of digital currency in lieu of physical notes and coins. This gives the appearance of solving the problem of manufacturing (“printing”) the currency and the necessary distributions of the correct quantities and denominations of notes and coins throughout Greece. I would stress that this is indeed a major problem and one that is not easily or quickly solved because manufacturing a new currency and then distributing it needs planning, physical resources like secure storage and labor to do the cash management. So I can quite understand why creative minds would seek to find a simpler solution. A digital currency would not need that physical product distribution and so seems like it overcomes a big hurdle which Greece would face. But in reality, all it does is exchange one set of problems (manufacture and distribution of a physical item – notes and coins) for another (the design, build and testing of an infrastructure – smartphone apps, stored value cards or other mobile form factors) which would be needed to allow people to use the new digital currency in a retail / merchant environment or web-based payment interfaces to allow people to settle things like taxes, utility bills, rents and suchlike online using a digital currency. Obviously, this “digital currency infrastructure”, if I may call it that, doesn’t exist in Greece on any scale. Indeed, it doesn’t exist anywhere in the world apart from a few niche examples used by early adopters of things like Bitcoin. Am I being harsh in describing these as “hobbyist” ? From my perspective, working in the traditional payment / big finance industry, that is what they seem like to me in terms of their maturity. It is at this point that proponents of a digital currency-based solution for a Greek euro exit often get a bit hazy and start implying that the traditional card payments infrastructure can somehow bridge the gap. You seem to be suggesting this when you refer to “businesses can act as the ATM for their own benefit to receive euros in exchange for digital…” which would require a merchant to take payments in euros and exchange them for the new digital currency. If it wasn’t physical currency euros being paid to the merchant in exchange for digital currency it would have to be card payments – as Naked Capitalism has pointed out at length, card payments are vital to the tourist industry and the tourist industry is vital to Greece’s economy. Now, either you’re proposing that the existing card payment infrastructure EPoS terminals can take a card payment from one of the existing card networks’ cards (VISA, MasterCard etc.), hold the payment in the terminal, then credit the mobile form factor for the digital currency (such as a smartphone app or stored value card or similar). If not that, then the merchant has to take physical euros in cash off the customer and then use the conventional EPoS terminal to credit the digital currency mobile form factor. But this would mean that the digital currency mobile form factor would have to comply with exactly the same specification that conventional card networks’ cards have to adhere to. Before blithely coming up with ideas for how some new-fangled digital currency could work, I really urge any reader to review how onerous the current standards for the conventional card payments networks are. Here’s MasterCard’s merchant guide: http://www.mastercard.com/us/merchant/pdf/SPME-Entire_Manual_public.pdf. And that is just for merchants. Card issuers have an equally detailed set of requirements to fulfil for card manufacturing. Adding support for a digital currency mobile form factor to the existing card payments infrastructure while being backwards-compatible with the existing standards for “conventional” cards is a huge undertaking. Just reading the standards takes days, let alone understanding it and then coming up with a set of designs. The card payments industry has recently introduced a modest change in the form of additional feature – support for Apple Pay. If I tell you that this incremental advance (it really is merely a re-use of the existing facility to handle contactless NFC enabled cards) took over two years of planning and testing (plus co-ordination between the myriad of actors in the payments industry) to deliver. The only significant change to the standards was PAN tokenisation which was previously an “option” for the EPoS terminals, this became a “mandatory” to allow card PANs to be selected in the Apple Pay “wallet” and then transmitted to the EPoS terminal securely. Two whole years. Just for that. What you’re suggesting implies not only passing of the unique ID for the form-factor information but also the stored value position change too between the digital currency and the EPoS terminal. So it could hardly be developed and rolled out any quicker than Apple Pay support. Now, I might well have misunderstood you here. If you’re not suggesting that the existing conventional card payments networks’ infrastructure (such as EPoS terminals) is being changed to support a digital currency’s mobile form factor, then you are presumably talking about some other, new, equivalent ? In which case, you land on the big snake and go back to square-one – having to introduce a new, parallel, infrastructure to support the digital currency in every merchant and every bank in Greece. I’m open to sensible suggestions for how long that would take to achieve, say, a 95% penetration rate. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
