The Digital Euro: Decoupling from PayPal, VISA & Mastercard
The Digital Euro: Decoupling from PayPal, VISA & Mastercard
The Digital Euro aims to be an electronic equivalent to banknotes and coins, allowing Europe to do its own e-payments. Let's explore this.
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'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.
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.
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.
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
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.
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.