How a digital EURO may look like

[paxmao]

I have read about the digital euro talks here and I think it is worth sharing with the forum what is the current thinking or the European Institutions:

Citizen´s consultation yield concerns about:

- Privacy - 43% of people are worried about this!!
- Usefulness and safety
- Integration in the current systems
- Efficient and cost-less

While the ECB acknowledges the need for privacy, they also say:

Digital euro payments could guarantee different degrees of privacy[7], involving different trade-offs with other policy and regulatory objectives such as the need to combat illicit activities
<...>

In theory, digital euro payments could be anonymous if users’ identities were not verified when they access digital euro services. But this anonymity would provide fertile ground for unlawful activities and could prevent compliance with regulations on anti-money laundering and combating the financing of terrorism.

So, yes, privacy is going to be a concern, yes the institutions will not make digital euro anonymous per-se so I my view we should expect it to be very unlike cash and yes it does open the door to making cash restricted for very small payments and thus having a massive control over people.

My self-question is, up to what point a successful launch of a digital Euro, versus a Digital Yuan and a Digital USD may increase the attractive of these currencies and thus could impact the exchange rate beyond the usual interest rates / inflation / import-export components of the demand for currencies.

[Kittygalore]

If the government continues to implement digital currency that has a way of tracking your movement, I am pretty sure that there isn't going to be a lot of people that are going to like it. Also, privacy is a commodity in this world full of technology that tracks you. Remove the ability to trace the movement of the people and make it favor the people.

[Poker Player]

It is not clear to me. Yes, in theory they say they are concerned about privacy:

A digital euro would therefore allow people to make payments without sharing their data with third parties, other than what is required by regulation. This differs from private payments, where services are generally offered in exchange for personal data that are then used for commercial purposes.

I actually think, as I think you point out as well, that privacy, if any, is going to be in short supply. What are they going to offer privacy for if a digital Euro is every controller's dream?

In any case, there will always be ways to escape. The ECB will know everything that anyone using the digital euro does but for illicit activities (or pure privacy of licit activities) other fiat currencies, gold and silver coins or cryptos will be used as in Sweden, where cash has practically disappeared.

Regarding the last question, it is not clear to me. I think that both the Yuan, the Dollar and the digital Euro are going to be launched at about the same time, although it seems that the Yuan will be the first, and, when it does, the US and Europe will not want to be left behind, so I don't think it will affect the exchange rate significantly.

[buharikx31]

I have read about the digital euro talks here and I think it is worth sharing with the forum what is the current thinking or the European Institutions:

Citizen´s consultation yield concerns about:

- Privacy - 43% of people are worried about this!!
- Usefulness and safety
- Integration in the current systems
- Efficient and cost-less

While the ECB acknowledges the need for privacy, they also say:

Digital euro payments could guarantee different degrees of privacy[7], involving different trade-offs with other policy and regulatory objectives such as the need to combat illicit activities
<...>

In theory, digital euro payments could be anonymous if users’ identities were not verified when they access digital euro services. But this anonymity would provide fertile ground for unlawful activities and could prevent compliance with regulations on anti-money laundering and combating the financing of terrorism.

So, yes, privacy is going to be a concern, yes the institutions will not make digital euro anonymous per-se so I my view we should expect it to be very unlike cash and yes it does open the door to making cash restricted for very small payments and thus having a massive control over people.

My self-question is, up to what point a successful launch of a digital Euro, versus a Digital Yuan and a Digital USD may increase the attractive of these currencies and thus could impact the exchange rate beyond the usual interest rates / inflation / import-export components of the demand for currencies.

Personally, I think the reservation of funds should be made equally 1:1 for unpredictable problems with network and hacker attacks, but the difficulty of creating such system is really complicated including that it should be made for whole European union. Indeed it's so possible in current realities and in other hand really difficult to make it work ideally and securly working for whole union, will be great if they will make it decetralized as DEX exchanges, without a central control but it's impossible

[Mauser]

If they don't make their digital currencies anonymous I fail to see how people are going to like it. Maybe I am just too old but it doesn't seem like such a good deal. Traditional fiat currency can already be transfered within seconds,on top of that we can use payment services like PayPal to shop online. And für investing I would assume that investors are still going to prefer independent crypto currencies that are not controlled by central banks. To me it doesn't really matter if its the yuan euro or dollar. Bitcoin and ETH are going to be the future.

[fiulpro]

I do not think that people have to even be worried about the launch of digital fiats from around the would. Well at the end of the day, these things are not going to be anonymous and at the same time they are going to be stable, backed and slight fluctuations would be just comparable to the one's of a stock market. Why would people even consider holding them in the first place ? I do think that the governmental bodies will provide people with some benefits, like discounts etc.. which I do think is nothing but Manipulation to get their market started. At the same time they will try and ban cryptocurrencies to get the crowd more attracted towards their fiat 2.0. honestly I do think I would use them for trading in the worst case scenario if that would be an option. But much like stable coins they would not be that relevant at the end of the day.

[Febo]

Citizen´s consultation yield concerns about:

- Privacy - 43% of people are worried about this!!
- Usefulness and safety
- Integration in the current systems
- Efficient and cost-less

When central bank coins will be out the main FUD central banks will have toward Bitcoin will be lack of privacy. People will get very sceptical of using Bitcoin and give their information's for everyone to see compared to have same privacy as they have right now with central bank coins.

[ChrisPop]

I'm not really sold on the idea of why a digital EURO (crypto) would be better than the actual virtual currency (numbers in a bank account) and cash system.
Bank accounts, cards and internet banking makes our method of payment easy and effortless while cash payments offer us a certain degree of anonimity.

In order to analyse this properly we must ask ourselves what would be the benefits of using the blockchain technology instead of the current bank system:
- Cost effectiveness - probably more for banks and not for end-users - but could translate in certain discounts for clients as well
- Transparency on government transactions - this could finally be a solution to the corruption present especially in today's political systems\
- Smart contract functionalities - I don't know about you, but taking a loan using a smart contract sounds enticing to me.

I cannot think of anything else right now, but I'm sure there should be more benefits. However it shouldn't affect our lives too much even if the EU makes the transition to a cryptographically generated currency.

[20kevin20]

When central bank coins will be out the main FUD central banks will have toward Bitcoin will be lack of privacy. People will get very sceptical of using Bitcoin and give their information's for everyone to see compared to have same privacy as they have right now with central bank coins.

There's definitely more privacy with BTC than there'll be with CBDCs. What these guys'll do is they'll make it so that you'll probably have some kind of imaginary privacy, something similar to the COVID-tracing apps. You theoretically have privacy since the data is exchanged randomly, yet it's not that hard to link a device to their owner or two devices to each of their owners.

We are pseudonymous. CBDCs will be fully open to the authorities, something very similar to the banking system we have today. What I'm more worried about is that Bitcoin doesn't have any privacy besides coin control, mixers and CoinJoins, out of which the first is a quite difficult task if you want some persistent privacy while the other two are seen as coin-stainers. If that many people want privacy for a digital coin, then I'm afraid neither BTC or CBDCs are the proper answer.

[DigitalFox]

What privacy can there be for a centralized government controlled coin? Regardless, of course, of what that government tells its citizens. IMHO people who expect any privacy in this are straight out delusional.

[Theb]

The problem really here is most of the people who are concerned about the privacy part of currencies is that they aren't really private at all even the ones who are already being used by them. From Paypal, bank wire transactions, and even down to remittance centers all of them are under FATF and AML rules and a lot of people who are concerned about privacy are using it already. They undergo some kind of KYC and verification process and maybe they aren't aware that their transactions are being monitored. The general rule is if there is a monetary transaction involve it will most likely be monitored by the authorities.

[Hydrogen]

One issue with the euro is the EU's inability to effectively restructure and reformat the economy of greece to prevent it from being a debt liability to positive cash flow EU states. Greece's troubled economy is constantly being bailed out by the EU. Over the long term the arrangement could threaten to drag other EU states into unsustainability along with greece. #Brexit and the UK abandoning the EU further stressed this condition.

One of the more interesting ideas for CBDCs was venezuela's proposal to back their CBDC with oil. Central banks could initially back their digital currencies with oil, gold or other commodities. That could attract the type of mass adoption they're looking for. Based on what we've seen from china's initial CBDC proposals. Which included digital currencies with expiration dates and otherwise inferior strings attached in contrast to cash or competing technologies. It doesn't appear that the talent designing and developing the 1st draft of CBDC have much background in marketing.

[adzino]

I have read about the digital euro talks here and I think it is worth sharing with the forum what is the current thinking or the European Institutions:

Citizen´s consultation yield concerns about:

- Privacy - 43% of people are worried about this!!
- Usefulness and safety
- Integration in the current systems
- Efficient and cost-less

While the ECB acknowledges the need for privacy, they also say:

Digital euro payments could guarantee different degrees of privacy[7], involving different trade-offs with other policy and regulatory objectives such as the need to combat illicit activities
<...>

In theory, digital euro payments could be anonymous if users’ identities were not verified when they access digital euro services. But this anonymity would provide fertile ground for unlawful activities and could prevent compliance with regulations on anti-money laundering and combating the financing of terrorism.

So, yes, privacy is going to be a concern, yes the institutions will not make digital euro anonymous per-se so I my view we should expect it to be very unlike cash and yes it does open the door to making cash restricted for very small payments and thus having a massive control over people.

My self-question is, up to what point a successful launch of a digital Euro, versus a Digital Yuan and a Digital USD may increase the attractive of these currencies and thus could impact the exchange rate beyond the usual interest rates / inflation / import-export components of the demand for currencies.

Those 43% people use fiat currency. They do know that the fiat currency they are using isn't private at all, right? The other form of "digital fiat" such as digital wallets they use aren't giving them any privacy at all. Then what's the difference between using those and digital EURO? No difference at all. They are all the same. Centralized and controlled by a single entity. I doubt  they would be willing to make a currency that will give full privacy to their people/users. If they do that, they won't be able to control them.

[hatshepsut93]

My self-question is, up to what point a successful launch of a digital Euro, versus a Digital Yuan and a Digital USD may increase the attractive of these currencies and thus could impact the exchange rate beyond the usual interest rates / inflation / import-export components of the demand for currencies.

We had digital Euro, USD and other currencies for decades. If you're using credit card, that's digital fiat currency. The only difference between these new projects and old systems is that now the government will be the owner of the network, so they won't have to request information from private companies. And if these digital currencies will be a public good, their fees might be lower than in privately owned payment systems.

[Mahanton]

My self-question is, up to what point a successful launch of a digital Euro, versus a Digital Yuan and a Digital USD may increase the attractive of these currencies and thus could impact the exchange rate beyond the usual interest rates / inflation / import-export components of the demand for currencies.

We had digital Euro, USD and other currencies for decades. If you're using credit card, that's digital fiat currency. The only difference between these new projects and old systems is that now the government will be the owner of the network, so they won't have to request information from private companies. And if these digital currencies will be a public good, their fees might be lower than in privately owned payment systems.

Exactly!
I was supposed to say the same thing that we had been using digital fiat for a while now or through ages and it is just they are just trying to make it sound something new but its not really
that giving much of that difference. For fees and security then there's no doubt with that but with privacy? and this is where everything do changes for those people who do
value up their privacy then this isnt something new for them to care on and just simply stick into real crypto with having that anonymity feature.
Yes, it might not be regulated or mainly supported but nothings beats out the chance that you do have the full control of your finances.

[pixie85]

So, yes, privacy is going to be a concern, yes the institutions will not make digital euro anonymous per-se so I my view we should expect it to be very unlike cash and yes it does open the door to making cash restricted for very small payments and thus having a massive control over people.

Think of the panic among current cash holders.

What If I had 100 thousand in cash at home right now and heard in the news that next year I won't be able to buy a car anymore. All I'll be able to do is grocery shopping or paying in restaurants. Crazy!

Now due to low interest rates people are withdrawing cash and they want to stop it by making cash useless, that's their main goal.

[awik p]

So, yes, privacy is going to be a concern, yes the institutions will not make digital euro anonymous per-se so I my view we should expect it to be very unlike cash and yes it does open the door to making cash restricted for very small payments and thus having a massive control over people.

Think of the panic among current cash holders.

What If I had 100 thousand in cash at home right now and heard in the news that next year I won't be able to buy a car anymore. All I'll be able to do is grocery shopping or paying in restaurants. Crazy!

Now due to low interest rates people are withdrawing cash and they want to stop it by making cash useless, that's their main goal.

that's what happens to real currencies nowadays, inflation is always there, but I think if only one year the inflation is not too high. it is not good to save especially in a bank, of course the money we save will not develop. indeed crypto currently offers for transaction and investment tools

[franky1]

if anyone done some research about things many years ago where governments went into research on crypto.(hyperledger project)
its not a single blockchain. but if i ELI-5 it.. a master chain(reserve) with lots of sidechains
heck even bitcoin is shifting to this business model with LN and liquid banknotes bitcoin as the reserve asset

i can imagine it more like each euro country having its own sidechain. and each day it just aggregates the daily total coin movements with the reserve chain

this does not mean every country holds every piece of transaction data. nor all life history of balance holder.

...
it could go as far as every town has its own 'branch' of the bank.

..
one thing is for sure. they will end up having some way to 'freeze' accounts or gain access to funds in case of courtfines. taxes or illegal activity seize and comply stuff
so ELI- 5 that as multisig involvement

[Dilerium90]

The creation of a state digital currency goes against the main goal of cryptocurrencies - decentralization and freedom from banks and the old system. In fact, the digital state currency will also be controlled by the state. Perhaps there will be one plus - ease of use.

[davis196]

My self-question is, up to what point a successful launch of a digital Euro, versus a Digital Yuan and a Digital USD may increase the attractive of these currencies and thus could impact the exchange rate beyond the usual interest rates / inflation / import-export components of the demand for currencies.

The "digital euro" won't boost the value of the euro.The "digital euro" is not an attractive currency,because it will be more transparent and you will have less privacy,while using such currency.
All the central bank digital currencies are created for the same purpose-fighting illicit financial activities.
They won't improve the life of the average consumer.
I'm not sure who the digital euro will look like,but I'm sure that nothing significant will change in the way we use digital fiat money(credit cards,mobile payments,etc.)