Digital euro could drain up to 700B euros of deposits in bank run, ECB says
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Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says
#2How is the digital euro saved? Is it insured? Does it earn interest?
Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says
#3How is the digital euro saved? Is it insured? Does it earn interest?
it's a personal account in the ECB, it's insured by the ECB's digital printer and interest will likely be whatever the ECB decides; it'll need to pick a value that doesn't blow up commercial banks as the article says, and even if does and chooses a very low deposit limit, it'll still cause stress.
> The study, requested by European legislators, was aimed at evaluating the risks that a digital currency, essentially an electronic wallet guaranteed by the ECB, would pose to the banking sector under different scenarios, including a hypothetical "flight to safety".
Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says
#4Clickbait title. This is a simulation of an unexpected event and IMO meant to dissuade the public from digital currency.
Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says
#5So its not really about a digital euro and is actually about ECB doing private banking?
Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says
#6for all intents and purposes the Euro is already digital. you send money to persons and companies via instant wire transfer, you pay digitally when shopping online and you pay digitally in physical stores with your card or NFC phone.
what possible benefit over what already exists and is in wide use could a "digital euro" offered by the ECB provide to any EU citizen?
Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says
#7How is the digital euro saved? Is it insured? Does it earn interest?
it's a personal account in the ECB, it's insured by the ECB's digital printer and interest will likely be whatever the ECB decides; it'll need to pick a value that doesn't blow up commercial banks as the article says, and even if does and chooses a very low deposit limit, it'll still cause stress. > The study, requested by European legislators, was aimed at evaluating the risks that a digital currency, essentially an…
> it'll need to pick a value that doesn't blow up commercial banks as the article says, and even if does and chooses a very low deposit limit, it'll still cause stress.
or, more likely, everyone in the EU will ignore this "digital euro" nonsense and it will just be another unnecessary waste of taxpayer money.
Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says
#8So its not really about a digital euro and is actually about ECB doing private banking?
No. Private banking refers to for banking, investment and other financial services provided by banks and financial institutions primarily serving high-net-worth individuals (HNWIs) – those with very high income or substantial assets.
This is ECB giving normal people direct access to ECB money past banking.
Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says
#9for all intents and purposes the Euro is already digital. you send money to persons and companies via instant wire transfer, you pay digitally when shopping online and you pay digitally in physical stores with your card or NFC phone. what possible benefit over what already exists and is in wide use could a "digital euro" offered by the ECB provide to any EU citizen?
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Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says
#10> The ECB also simulated individual holding limits of 500 euros, 1,000 euros and 2,000 euros, obtaining lower outflow estimates.
Seems like we'd be going into the same direction as the US did when it banned people from holding gold from 1933 to 1975 under Executive Order 6102 (https://en.wikipedia.org/wiki/Executive_Order_6102).
Not a great look on the financial value and stability of a currency in my very humble, non-expert opinion.