2w ago

The Digital Euro: Decoupling from PayPal, VISA & Mastercard

www.ecuradio.eu

The Digital Euro: Decoupling from PayPal, VISA & Mastercard - Ecu Radio

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.

31 comments

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.
  
  I actually appreciate you writing like that, because now I'm sure I don't get it.
  Don't you already have all the upsides with the traditional euro? Transfers between people seem to be the only reason you mention, which I still don't get what exactly the upside is.
  
  I'm going to use a personal case, now.
  I can get an instant transfer, within borders, two ways, in my EU corner:
  a) I use account to account immediate transfer order, where I can pay anything from a few cents to a few euros, depending on bank
  b) I can use a national subsystem, where phone numbers are used, and pay a few cents
  But doing this, even within EU borders, is, to my knowledge, border line impossible, with current systems.
  IBAN, BIC and SWIFT do exist but transfers through those channels can take days and be very expensive.
  My country ordered all national banks, still in the very early eighties, to get their acts together, and find a way for people to access their accounts, pay services, receive and transfer money, regardless the bank they had their account. Thus it was created Multibanco, a service network, built, paid for and maintained by all banks working on my country.
  The eEuro closely resembles this concept, in my understanding.
  The eEuro becomes a parallel subsystem, vouched for, surpervised and controlled by and through legally binded institutions, without the need to force federalization of european bank systems.
  The ECB issues eEuros, which you can exchange your conventional Euros for, through your bank account, but only use through the eEuro network. It's the ECB managing all those movements, not every single country (veilled federated banking), thus it can bypass a huge amount of beaurocracy.
  I can imagine this system as a precursor to something a lot bigger, like a world unified payment system. Individual creators and professionals could greatly benefit from it, using it to directly receive payments and donations
  
  So, the concept exists to fix a systematic problem. Creating a new currency is just collateral.
  I didn't know things were that bad with banks over there, now I get it.
  
  it's basically the numbers appearing instantly instead of waiting 3 days
  
  Wait, does it take 3 days to make a bank transfer in Europe? When I send money to family from Australia to Euro it takes like 2h, what's going on with the world?
  When I do from Australia to Australia it's more like 1 minute. No fees.
  
  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.

31 comments