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Digital euro could drain up to 700B euros of deposits in bank run, ECB says

reuters.com

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Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says

#11

Post by baq »

dinkblam wrote: post #7
baq wrote: post #3

Earlier quoted context omitted.

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.

that's the best case scenario.

Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says

#12

Post by naldb »

dinkblam wrote: post #7
baq wrote: post #3

Earlier quoted context omitted.

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.

How will you ignore it when they outlaw cash?

Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says

#13

Post by baq »

dinkblam wrote: post #6

for 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?

every euro account ultimately ends up on the ECB's balance sheet, so why keep middlemen?

Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says

#14

Post by mejutoco »

dinkblam wrote: post #6

for 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?

If they give money as some sort of relief they could specify what it can be used on: groceries, education etc

Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says

#16

Post by logicchains »

naldb wrote: post #12
dinkblam wrote: post #7

Earlier quoted context omitted.

> 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.

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.

Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says

#17

Post by bitmasher9 »

LunaSea wrote: post #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,…

I think there are significant differences between the two events, with the major similarity being “there is a large change in regulation regarding how ordinary people handle money.”

In 1933 the major goal was to force ordinary citizens to trade their gold for cash, and then inflate the cash. That is why it became legal to hold gold again in 1975, the dollar value became disconnected from gold.

In modern Europe I don’t see the same rug-pull and a digital euro will continue to be just as valuable as a physical one. There are other valid concerns for going digital-only with currency.

Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says

#18

Post by broeng »

dinkblam wrote: post #6

for 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?

I haven't looked into it much, but I assume the point is that it avoids the SWIFT system.

Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says

#19

Post by carlosjobim »

nabla9 wrote: post #8
tokai wrote: post #5

So 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.

> This is ECB giving normal people direct access to ECB money past banking.

That's one way of saying "This is normal people giving the ECB direct access to their finances past banking."

Let's not forget who is the wolf and who are the oxen in this business.

Re: Digital euro could drain up to 700B euros of deposits in bank run, ECB says

#20

Post by ForHackernews »

logicchains wrote: post #16
naldb wrote: post #12

Earlier quoted context omitted.

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.

If there are no ATMs, and no shops accept cash, and they no longer mint Euro currency, what is there to enforce?

This is effectively already the case in parts of Scandinavia.

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