41–50 of 67 posts
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Paper and coins euro doesn't come with interest, I don't see why digital would. That'd still be the job of a bank.
It’s not “digital cash”, there is no such thing as “digital cash.” It’s an account that a person has with a bank that’s intended for routine transactions, so it’s closer to a checking account than physical cash.
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> 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.
I really don't understand the hostility here. The digital euro seems like a good way to reduce the power of companies like visa and mastercard, and reduce the fees too. If the government is providing a way to pay freely in a digital way, why would I pay a company to do the same (or worse, see the last scandal between the card companies and steam)?
And the hostility probably come from experience with EU that makes decisions solely in interest of politicians and corporations instead of EU citizens in my opinion.
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How will you ignore it when they outlaw cash?
The EU doesn't have anything close to the police force necessary to enforce a cash ban in the face of public opposition, and doesn't have the money to pay for one.
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I think it would help create fintech local alternatives to Visa and Mastercard, if it gets feature parity. It could be cool and, to be honest, this market could use a bit of a shakeup.
Both Visa and Mastercard work just fine with the regular old school euro, why would you need something entirely new to create a local competitor to an already existing service?
That's a great question!
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I think a driver is the idea of a European payment system. Why this should be "digital Euros" I don't clearly understand. We don't have digital USD, and we have indigenous payment systems in the US.
Isn't SWIFT a European payment system already?
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I think it would help create fintech local alternatives to Visa and Mastercard, if it gets feature parity. It could be cool and, to be honest, this market could use a bit of a shakeup.
Both Visa and Mastercard work just fine with the regular old school euro, why would you need something entirely new to create a local competitor to an already existing service?
If a digital € would change that is questionable though. Perhaps ambitions would get even worse.
Also a very good argument for cash. I like untracable transactions. I isn't just to benefit crime, it is also about privacy.
How 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…
> The study, requested by European legislators, was aimed at evaluating the risks that a digital currency, On the one hand I feel stupid asking what I think are the obvious questions. On the other hand I don't feel stupid because there's no way a lot of people know the answer to these questions: Is this "digital currency" actually just the Euro? If it is, aren't the Euros in bank's computer also digital? And why are…
As it is today, things are much more decentralized, and each bank is responsible for keeping a record of its own books, and all the protocols that automate transfers still require the bank to be responsible for all that information. Sending money from one bank to another required both banks to have an agreement with each other and a protocol regarding how they would exchange money between them, or to go through one or multiple banks, until there is a path from the original bank to the receiving one. Obviously, this was already improved by having the ECB and enforcing cross-bank mechanisms, like IBAN, but when you fundamentally change the currency to be a cryptocurrency, all of this comes embedded in the currency itself.
There's obviously a downside, which is that everything, even the smallest of purchases, is now fully trackable on a much bigger scale. The fact that money is no longer just fungible money that you can exchange at any time, but programmable money, is also a problem. You could, for example, program some money to be usable in certain ways, have money that expires, etc. Currently, if you have 1€, you have 1€, and you know that you can spend that in any place that accepts euros, and that will remain so as long as people accept euros. But now, you could have 1€, but that 1€ can only be spent in certain places (let's say restaurants), or you could have 1€ that would expire in a year if you don't spend it. That fundamentally changes the relation with money and how people quantify money, and no one really knows what the repercussions would be.
It will also help reduce government debt since private sector assets are public sector liabilities. Rich people don't want to be less rich and they hold at least 10% of their assets liquid and force the central bank to do QE to perform the duration transformation (which means everyone directly or indirectly holds government bonds either way).
The classical paradigm of the government issuing infinite duration money to the public is a one way ratchet. It's actually pretty insane to me that so many people think that a fundamentally broken system can be fixed by "holding it right". I mean look at the Trump administration promising reductions in debt through spending cuts and then end up with even more debt.
CBDC, or "digital currency", is all about control where the authority can trace every single cent, wallet or transaction and with Know Your Transaction(KYT) know about what is being paid for as well.
Beside this, they can program expiration or block a wallet or individual "coins", giving the authority absolute control over people's finances.
This is why these are so dangerous. It is an absolute end of financial sovereignty of individuals. And once implemented, no government(or rather central bank) will give such power away without a bloody fight.
So thread carefully when things like these come up. It's no joke. This is likely the most dangerous "policy" in human history. The lately discussed "chat control" or backdooring cryptography by governments does not even come close to what this is.