From Athens, the ECB will announce the digital euro – How it will work
From Athens, the ECB will announce the digital euro – How it will work
By Vassos Angeletou In Athens, the board of directors of the European Central Bank will meet on October 26 in order to announce its crucial decisions, not only for the interest rates of the euro, but also for a historic project in the history of the Eurozone – the digital euro. It has been known… Co...
I welcome an European alternative to Visa/Mastercard/Amex. I think it could have some at-cost fees, especially to make shops that benefit from the system pay for it instead of all taxpayers. I hope it will respect privacy, and not just at first and then start on a slippery slope. Maybe this would then allow shopkeepers to price the different payment options. I think there is legislation now that price cannot depend on payment method.
Well, practically time to see lower transaction fees. It is ridiculous to have all of your money on a bank which can invest them for profit, but you are earning nothing from all of this, and they even charge you to send money to an another bank..
Like money, but digital I imagine? Is it really that complicated in a world were we've all used phones and contactless cards rather than cash for a decade now and crypto is a thing?
Would be interesting if there was a limited supply.
Otherwise I don’t see the advantage, it is still being controlled by a central entity.
I really don't see the added benefit in this. We can already use our existing money in a digital way.
Doesn't this just complicate things? Am I missing something?
Current transactions have a transaction fee. The digital euro will have maybe lower fees? Or 0 fee for non commercialized transactions?
The digital euro will be available to everyone, not just to people with bank accounts. In some countries, poor people have a hard time getting a bank account.
Privacy. Currently your bank knows what you buy and they can even potentially sell that information. Maybe with digital euro, only the government will know.
Offline. With digital euro you can buy stuff offline, ie without an internet connection. This in theory could also provide the same privacy as cash.
Maybe we can eventually cut the middleman, banks, out of the equation.
The immediate reaction in the thread seems to be something like "what makes it a good alternative to Bitcoin" but it might be that it's aimed more as a competitor to the physical euro.
If the government knows when payments have been made, that eliminates potential for not reporting sales, which I understand is a significant issue in some EU members.
There's also some cost to handling (including security) and maintaining physical currency that doesn't exist with digital currency.
Here's an article arguing that the US -- which has apparently not shown much interest in a "digital dollar" -- should adopt something similar. The rationales it gives seem more aimed at it being an alternative to physical cash:
https://www.nytimes.com/2021/07/22/opinion/cash-digital-currency-central-bank.html
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One benefit is security. Cash is vulnerable to loss and theft, a problem for both individuals and businesses, whereas digital currencies are relatively secure. Electronic hacking does pose a risk, but one that can be managed with new technologies.
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Digital currencies also benefit the poor and the “unbanked.” It is hard to get a credit card if you don’t have much money, and banks charge fees for low-balance accounts that can make them prohibitively expensive. But a digital dollar would give everyone, including the poor, access to a digital payment system and a portal for basic banking services.
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A central-bank digital currency can also be a useful policy tool. Typically, if the Federal Reserve wants to stimulate consumption and investment, it can cut interest rates and make cheap credit available. But if the economy is cratering and the Fed has already cut the short-term interest rate it controls to near zero, its options are limited. If cash were replaced with a digital dollar, however, the Fed could impose a negative interest rate by gradually shrinking the electronic balances in everyone’s digital currency accounts, creating an incentive for consumers to spend and for companies to invest.
That one might not be too popular with users.
- A digital dollar would also hinder illegal activities that rely on anonymous cash transactions, such as drug dealing, money laundering and terrorism financing. It would bring “off the books” economic activity out of the shadows and into the formal economy, increasing tax revenues.
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Relative to some other digital system, this is what WP has as ECB goals:
https://en.wikipedia.org/wiki/Digital_euro
Arguments and motives for the introduction of a digital euro are, according to the ECB:
- Maintain the role of central bank money as a monetary anchor for the payment system.
- Provide free digital access to a secure legal tender in the Eurozone
- Expanding payment options through alternative central bank money alongside cash and book money in commercial bank accounts, contributing to availability and inclusion
- Building trust in digital cash through a high level of privacy protection
- Promote innovation in retail payments
- Limiting the spread of foreign digital currencies to safeguard the financial stability and monetary sovereignty of the Eurozone
Let's hope they'll use GNU Taler for this. I only heard it being considered in Switzerland.