From the 7th of April to the 9th, the European Central Bank spoke extensively about the Digital Euro, expressing hope about its potential and publishing an update of its rulebook. Its President, Christine Lagarde, also called for it, wishing to end European reliance on international payment solutions providers such as VISA, Mastercard, PayPal, Stripe and others.
I read the article.
Boiled down, it is essentially a direct exchange between physical (money in your bank account) currency and a fully digital counterpart, at a 1 to 1 ratio, that can be done both ways.
Unlike crypto, it is to be issued by a central bank and will have to be accessed through properly licensed bank entities or similar institutions.
This can work. I want to read the full rule book now.
So it’s like Fiat currency, that can be accessed digitally through your banking app, and it’s convertible to Fiat, but it’s not Fiat
Can you dumb it down what I’m missing here?
No need to dumb it down; you got the gist of it. But I’m going to do my worst to make my “explanation” as ridiculous as possible.
get bank account
get euro monies in said account
go to bank again
open linked account for digital euro monies
from bank app, convert euro monies into digital-euro monies
1 euro monie = 1 digital euro monie
send digital monies to anyone in Europe with no middle man, instantly; receive monies, too.
buy and sell with digital monies, in Europe, no assle
have digital Euro monies in linked account
want to buy breakfast with Euro monies
convert digital Euro monies to euro monies
1 digital euro monie = 1 euro monie
go to ATM, insert card, take euro monies out, get euro monies bill
go to cafe, get coffee and croissant, pay with euro monies
I laughed too many times writing that. I’m ridiculous and deserving of your scorn.
I’ll see myself out.
it’s basically the numbers appearing instantly instead of waiting 3 days
Exactly like this. There is such a system in Nigeria with the e-Naira, and there was a pilot program in the Eastern Caribbean with their dollar. It works pretty well, and is not that complicated to write and maintain. I’m taking from experience as I was part of the team that wrote that. I think I’m no longer under NDA because the company I worked for does not exist anymore, so if anyone has questions I can shine some light on how it works under the hood.
about fuckin time
Sounds less like a replacement for Visa/MasterCard and more like yet another bullshit crypto scam.
No. It’s similar to Gnu Taler.
It also says it (indirectly) in the article:
According to the ECB, the Digital Euro is “Central bank money in digital form”. In other words: the Euro, except digital.
Behind this truism, the ECB mean that it would be money, still issued by the ECB, but not taking the aspect of a banknote or a coin, available free of charge for all.
So no blockchain. If implemented correctly this could be not just a replacement for Paypal et al.
No blockchain, but I bet it will be tokenised and put on a blockchain.
So what? They already do that with every fiat currency in the form of stablecoins.
I’m really hyped for this but in typical EU fashion it’s taking years.
Not to mention how long it will take for cardreaders & ATMs / cash machines to be updated to work with this.
I can see this taking a long time, so as long as they move the whole infrastructure forwards, together, then it will better than developing the “eumasterpayvisapalcard” and then thinking about the end devices…
Unfortunately they bought into this right around the bitcoin hype, so I expect the entire project to become a wasteful slog that nobody has any real use for, except for maybe gambling on exchanges, like most cryptocurrencies.
A digital euro that requires no banks or payment processors definitely has a use. It’s all the benefits of cryptocurrency but with the backing of a central bank.
It sure does! Except that’s not what this will be. It’s what cryptocurrency should be, and how digital money should work, but it’s not that simple.
Payment processors don’t just magically take fees, they also verify and register transactions; something that will still need to be done even with cryptocurrency.
When Steam implemented cryptocurrency, they used a third party to do it. When El Salvador adopted Bitcoin nation-wide, it used a system of payment processors for most payments. Payment processors exist because having your local bank integrate directly with the payment ecosystem is not practical.
I can wire transfer money to banks for free already. The reason my grocery store isn’t letting me pay that way is because they don’t want to integrate with the bank directly. Better to pay a decimal point of a percentage on the transaction than to deal with all that crap.
The promise of the digital euro is “now the banks can’t screw you over”, but that promise is made by the people regulating the banks. This is just a bank account with the ECB, but with a ton of overhead and false promises (like promising “privacy” in a permanent ledger and accounts tied to names, lol) on top.
Out of all the cryptocurrencies, I do think one led by the ECB would be the best one, but it’s still a solution looking for a problem. Now, they’ve tied the very necessary removal of European dependence on American payment processing standards to this project. When the crypto-euro fails or doesn’t get taken up, we’re stuck with VISA/Mastercard for yet another decade.
Exactly. Best of both worlds. We actually want a currency that can be manipulated by government. That’s how they stabilise it. An unstable currency isn’t much use. Block chain transfers is great because it means easy, secure transfers in the open. No gatekeepers like WorldPay.
Why do they make it so confusing? In one sentence they talk about replacing visa and stripe and making a euro payment processor, and then they also want a separate wallet for some reason? Even tho our bank accounts are obviously already “digital” euros. Also it seems they want to comoete with Wero??
Because it’s basically a new currency:
“it would be money, still issued by the ECB, but not taking the aspect of a banknote or a coin”
The problem here is that this requires new digital wallets. The downside also means that governments have even more control and surveillance options on your finances. While currently your normal bank account can be blocked or frozen. They can’t really do it on a per payment basis. With the new digital wallets they could, potentially, restrict your use on a per payment basis. So rationing fuel could happen by only allowing someone to spend X digi-Euros on fuel. Also it would be impossible to spend money anonymously like you can do with cash.
There are of course upsides, but giving governments the option to do bad things is more likely to lead governments doing bad things.
From their FAQ:
Privacy is one of the most important design features of the digital euro.
The digital euro is designed to be able to function offline in a way that would offer users a cash-like level of privacy, both for sending money to other people and for paying in shops. When paying offline, only the payer and the payee would know the personal transaction details of the payments made.
For online digital euro payments, privacy would be implemented so that the Eurosystem itself – the issuer and payment infrastructure provider – would not be able to directly connect transactions to specific individuals.
Further reading link they provide: https://www.ecb.europa.eu/euro/digital_euro/features/privacy/html/index.en.html
not really
As with other digital payment methods, intermediaries like your bank would have access to the personal data that are necessary to comply with EU law, such as anti-money laundering and terrorism financing regulations
That’s what they say. Implementing it that way is an entirely other matter.
Yeah it confuses a lot of people that it is called “digital euro” when it is in fact a new currency, my guess is they chose that name because there would be more resistance against it otherwise
We need this so we can choose between providers, all we have now are private profit making companies like PayPal. And they can hold your cash, cut you off, etc.
Their wording clearly suggests they might be pushing a single candidate, yes.
They spoke extensively about it, because relying on US companies is relying on Trumps sanity…
They should just use existing blockchain and publish an EUR pegged stablecoin except with official backing of the central bank
This. Take the Tether model but with issuance directly from the central bank and guaranteed conversion to cash.
