What is the status of CBDC, the controversial digital euro?

There has been a lot of hype around CBDC, or digital euro, for some time now. Research platform Follow the money Evelyn Whitlocks is interviewed, Director of the Digital Euro at the European Central Bank (ECB). What did she say about digital currency? And the fears that arise from society?

CBDC, whose full name is Central Bank Digital Currency, has been generating buzz for some time. Former Finance Minister Sigrid Kaag and Queen Máxima, among others, appear to be strong supporters of the cash alternative in the Netherlands. This is the amount you can pay in cash in the Netherlands.

What is CBDC again?

But why do Cage, Maxima and their companions want this coin? We currently pay in cash (general, currency) and with funds from our bank account (private and non-cash). To put it bluntly, we get our money from the state, or the central bank. Our bank balance passes through a commercial bank. So the only public money is cash, but there is no digital public payment method. In addition, Europeans rarely pay in cash, and we rely heavily on banks (which makes us vulnerable in the event of a banking crisis). This accreditation gives banks many opportunities to deal with our money freely and without regulation.

But our Dutch Parliament has little influence on these plans. Europe is at the forefront when it comes to central bank digital currencies (CBDC). Such as the European Commission and the European Central Bank.

Euro Digital Director Evelyn Whitlocks

But the digitization of all kinds of things also raises questions. This is what scientists warned the research platform Follow the money For digital identity and there has been criticism of a future European medical file. According to critics, privacy, neutrality and independence are also at risk due to this digital government currency. In addition, opponents fear that the digital euro is intended to monitor citizens' transactions. In the future, payment for unhealthy or polluting products may be banned.

Economist and Follow the moneyJournalist Thomas Pullen has often written about the controversial central bank digital currency (CBDC). Talk to Evelyn Whitlocks, Director of the Digital Euro at the European Central Bank. What do you think is the added value of this digital currency? “We will not force anyone to pay with the digital euro, but we give citizens an additional choice: I pay with cash, I pay with a special payment method, or I pay with the digital euro.”

Privacy and government surveillance

FTM Witlox also presents concerns about CBDCs, and about privacy and government surveillance. But according to Witlox, the privacy standards for a digital euro will be “superior” to those currently in place when it comes to digital payments.

Because commercial banks can now identify the people behind digital transactions. According to Witlox, this will not be possible in a CBDC. “It will provide a level of privacy similar to that of cash, as personal transaction data will only be known to the payer and payee.”

Public and private money

Bitcoin, Libra (the currency owned by Facebook, Mastercard, and Uber, among others) or other digital currencies are of no benefit to the central bank, monetary sovereignty of any country, or the eurozone. According to Witlox, the funds should also be available as a public resource and not come only from private organizations.

Bolin points out that you also need banks or payment service providers for the digital euro. Witlox asks why a CBDC is independent from private parties. “Cash is also distributed through banks. This works well. You can get cash from your bank and put it in your wallet. The same goes for the digital euro: you can access your digital euro via your bank or Payment providerBut it's your money, “Your direct claim is on the central bank, just like cash.” But soon there will also be a public way to get this money.

Redeem for cash?

The limit for using the digital euro is 3,000 euros. You cannot save with CBDC. According to Witlox, it is therefore a means of payment. Although the digital euro must coexist with cash, it would not be surprising if physical central bank money were partially replaced by digital central bank money.

The truth week of the government formation: 4 questions and answers

Geert Wilders leaves his talk show in the cold: Op1 leaves seat available until 'it comes at some point'

comments