> your bank account would just hold USDC or Bitcoin, and you could send a billion dollars to anyone in the world in a few seconds. That belief is powerful and I still ascribe to it.
These statements still surprise me to this day. If you're a good person engineer, why does sending money in seconds need blockchain? There's parts of the world where this is commonplace and free as well.
I don't believe cross border was there in 2010 or so but why not implement that feature in an existing system instead of building out a parallel universe
The cross border not about technical capacity but legal control. For example if you are a refugee you might not be able to pull your bank savings and liquid stock with you from your home country to another without it being seized or taxed, but your crypto is always yours as long as you are the only holder of the keys. This scenario is one of the rare real world utilities I see with crypto.
Specifically for a refugee, at least with crypto you have the possibility to declare your assets in your destination, since you actually still hold on to them. Which is unlikely if it is tied to banks or investment platforms of an authoritarian country trying to genocide you. I understand this sounds like a fringe example but there are over 100 million forcibly displaced people globally.
A lot of countries cracked down on merchants accepting bitcoin, and in a lot of places it's illegal to offer BTC->cash conversions without KYC.
I suspect authoritarian regimes would be the first to close this loophole. This is not theoretical - Russia did this in 2022 to stop people from offloading their rubles and/or fleeing the country with their money.
Crypto is qualified as property and regulated in a very similar way. There is a market for borrowing using tokens regulated by digital assets act (цифровые финансовые активы).
> If you're a good person engineer, why does sending money in seconds need blockchain? There's parts of the world where this is commonplace and free as well.
The promise was to make this available for everyone, to send money everywhere.
For example for me in Sweden it's really, really hard to send money directly to people in Ukraine since the Swedish banks simply refuse to send money there.
You are questioning the method when people just see the need.
If you're an engineer, no matter what you say about the method, you know a country at war will make you lose all your savings. Or if you're a foreign citizen in a country that will seize your assets, even "by accident".
It is not an engineering problem, it is a geopolitical and legacy banking problem. Yes sending an encrypted message somewhere in the world in under a second is solved.
It was a legit question. Your link is about EU regulation, not actual transfer mechanics.
Your bank does not have your money because it has lent it to someone else. If a bank has 5 business days to make a transfer then it can buy bonds, put money into an overnight deposit and do many other things. If a bank has 10 seconds then it has to maintain larger reserves which is a pile of money doing nothing.
A good bank would model cash flows to predict capital requirements and borrow from the CB as needed. Instant payments increase bank’s capital requirements and reduce margins. An EU bank cannot borrow from US Fed Reserve. Therefore EUR -> USD transfers are more problematic. The bank has to keep some USD buffer and/or be able to borrow in USD. Lenders will do fraud checks at various steps in the process, some steps can be manual. It does not happen at the time of the instant payment but rather triggered by it at a later time. Still, the end result is bank needs more capital.
As a user of fiat financial system you would observe:
1. Cross border instant payments are rare.
2. Large instant payments (>1M) do not exist.
3. Large payments may stuck at a middleman. Especially true at the time of political instability, even more so between unfriendly countries (e.g. China - India).
These statements still surprise me to this day. If you're a good person engineer, why does sending money in seconds need blockchain? There's parts of the world where this is commonplace and free as well.
I don't believe cross border was there in 2010 or so but why not implement that feature in an existing system instead of building out a parallel universe