10 ms·

The EU is getting ready to pilot a Central Bank Digital Currency by 2028

25 points by ltadeut 3y ago

nabla9 3y ago
Benefits: https://ec.europa.eu/commission/presscorner/detail/en/qanda_23_3502 https://ec.europa.eu/commission/presscorner/detail/en/qanda_... - Digital payments wherever you are in the euro area - Possibility to pay digitally even without access to the internet - More choice for consumers (alternative to Visa/Mastercard) - Possibility to pay digitally even if you do not have a bank account - Enhanced privacy for users: The digital euro would enable users to make digital payments while ensuring their data is protected. When using the digital euro offline, the privacy of the user is the same as when they use cash. The European Central Bank would not be able to identify individual digital euro users, nor what users do with their money. They would only have access to encrypted data, and only to the extent that this is necessary to settle digital euro transactions, and support payment services providers in performing their tasks. This means that state-of-the-art security and privacy-preserving measures would be used, to ensure that data cannot be used to directly identify a specific digital euro user by the ECB and the national central banks.Overall, the level of privacy introduced with the digital euro would be unprecedented for electronic payments. The European Data Protection Supervisor (EDPS) would ensure that this high degree of privacy is respected. cost: Basic services for end users such as opening and closing a digital euro account, consulting balances, funding and defunding your digital euro account, and making transfers and payments would be provided free of charge.
- toomuchtodo 3y ago
  EU delivering on what the US Fed couldn't: FedAccounts https://rooseveltinstitute.org/wp-content/uploads/2021/08/GDI_Central-Banking-For-All_201806.pdf https://rooseveltinstitute.org/wp-content/uploads/2021/08/GD...
  - wcoenen 3y ago
    I think we are still a long way from "delivered". This is a proposal by the Commission. Next this needs to be approved by the European Parliament and Council. Then the ECB needs to decide on all the details (technical and otherwise). Then the ECB needs to build, test and deploy the system. Banks will still play a role so they will need to build, test and deploy their part as well. Then the system needs to work well enough and see sufficient adoption to be actually useful.
sigmar 3y ago
I don't understand (and don't see answers on Google) about how an "offline digital euro" would work. Unless the EU comes up with some magically unhackable hardware/software combo, or the 'offline' transfers are explicitly not trustless (ie- I can see your digitally-signed transfer of 5 euros, but will only be able to verify that it settles when I eventually get a connection)
- papichulo2023 3y ago
  Cash is also hackable (even more so) so I dont think that is a blocker. And about the online thing, we are moving towards a always-online-world fairly quickly.
  - sigmar 3y ago
    yea, maybe they're thinking it'll look like a combination of both- using smartphone secure element and less trust in settlement of the transfer. It sort of makes me think of the xkcd comic though: some EU official was like "just make digital currencies settle offline, how long could that take, a year?" https://xkcd.com/1425/ https://xkcd.com/1425/
  - eggy 3y ago
    Yes, but if you have the cash in your pocket, it's not. Robbery is not hacking, and you can confront your robber. Hacking allows nerds to dip into thousands of pockets with hardly a chance of getting caught. The modern world and its youth seem to be very eager to live the digital life and give up all under the guise of "I have nothing to hide" as justification for surrendering liberties. Government centralized digital currencies are the beginning of the end. Europe was heading for the dark ages again, and this will only speed it up.
- KRAKRISMOTT 3y ago
  You would think with all the "offline-first" blogposts dominating HN's front page right now, people here would have some faith in CRDTs and conflict resolution algorithms.
- imtringued 3y ago
eggy 3y ago
I attended the first HOPE (Hackers On Planet Earth) 1994 and heard a panel speak that included Eric Hughes, famous for the Cypherpunk's Manifesto among other things, about cryptography, banking, cypherpunk, etc. This was 15 years before the blockchain paper by Satoshi Nakamoto in 2008 and the start of Bitcoin on the market in 2009. The dream was to have anonymity and privacy for everyone. It would also eliminate the middle man. When you buy a late at Starbucks, it goes through at least 4 or 5 agencies, and they all take a cut, and track your information. Due to typical scare tactics, "drug dealers and pedophiles will use it to avoid prosecution", like cash was never used anonymously for drug deals! Also a few bad players in the crypto market didn't help with the reputation. However, to totally cave and move to centralized government control of your wallet is insane. Yes, you already have a lot of that with ATMs, debit cards, credit cards, Paypal, Apple and Google, but now you are going to put it all in one basket? It's bad enough paper money is now just a joke without a gold-backed or other real world commodity, just print as much as you can to keep the average joe/jane in the dark about how bad the value of the currency really is. Europe is going to crash hard economically for many reasons in the coming years, and this will give the government the power to control the populace even more when it does.
- imtringued 3y ago
  >It's bad enough paper money is now just a joke without a gold-backed or other real world commodity, just print as much as you can to keep the average joe/jane in the dark about how bad the value of the currency really is Why does this matter? According to Fisher Black people just substitute the money they don't want with the money they want. So far the only widespread substitution that is happening is boring fractional reserve banking. Barter clubs are an unimportant niche. For everyone else they can just trade their money for something that matches their philosophy better. If you think gold is the right choice, then don't force it onto other people. Also, the value of money today is mostly backed by contractual obligations, so the situation is actually pretty good.
- jacooper 3y ago
  Honesrly why should i deal with the risk of a bank going out of business, because of some stupid management mistake? Banks are directly connected to the government, might as well skip the middle man and put my money direct with the government then. Also this doesn't replace the current euro, its a new type of Euro with a separate account and payment system and so on.
TurkishPoptart 3y ago
Why? What problem does this solve? Our money is already digital; with my tinfoil hat on, this just seems to give the government way more control over the monetary supply than it deserves.
- gbalduzzi 3y ago
  It avoids having companies (mastercard / visa) as digital currency middleman, taking a cut for every money you move.
- nabla9 3y ago
  Today only banks have ECB accounts. It allows individuals and regular business to have access into central bank money directly. (it's not mentioned anywhere, but if ECB wants to do quantitative easing in the future, it could give every EU citizen 100 EUR directly, so called helicopter money. It would be the most effective way to do monetary easing and would allow many negative effects of QE trough banks)
- imtringued 3y ago
  What do you mean by more? It already controls it. No CDBC proposal is about getting rid of banks or minimum reserve requirements below 100%. I understand the privacy concerns because bearer bonds are illegal or impossible to issue nowadays so getting rid of cash would be a death knell but that isn't your concern.
- leobg 3y ago
  Search HN for “Ask HN: Stripe froze my account”. Make no mistake, I don’t like the government. But at least I can sue the government if they do something that jeopardizes my business without a solid reason. With these private companies, posting a cry for help on HN is pretty much the only thing you can do.
  - JimtheCoder 3y ago
    "But at least I can sue the government if they do something that jeopardizes my business without a solid reason. " What country are you from, if you don't mind sharing? To me, as a North American...this just sounds implausible.

25 points by ltadeut 3y ago

Benefits: https://ec.europa.eu/commission/presscorner/detail/en/qanda_23_3502 https://ec.europa.eu/commission/presscorner/detail/en/qanda_... - Digital payments wherever you are in the euro area - Possibility to pay digitally even without access to the internet - More choice for consumers (alternative to Visa/Mastercard) - Possibility to pay digitally even if you do not have a bank account - Enhanced privacy for users: The digital euro would enable users to make digital payments while ensuring their data is protected. When using the digital euro offline, the privacy of the user is the same as when they use cash. The European Central Bank would not be able to identify individual digital euro users, nor what users do with their money. They would only have access to encrypted data, and only to the extent that this is necessary to settle digital euro transactions, and support payment services providers in performing their tasks. This means that state-of-the-art security and privacy-preserving measures would be used, to ensure that data cannot be used to directly identify a specific digital euro user by the ECB and the national central banks.Overall, the level of privacy introduced with the digital euro would be unprecedented for electronic payments. The European Data Protection Supervisor (EDPS) would ensure that this high degree of privacy is respected. cost: Basic services for end users such as opening and closing a digital euro account, consulting balances, funding and defunding your digital euro account, and making transfers and payments would be provided free of charge.

toomuchtodo 3y ago
EU delivering on what the US Fed couldn't: FedAccounts https://rooseveltinstitute.org/wp-content/uploads/2021/08/GDI_Central-Banking-For-All_201806.pdf https://rooseveltinstitute.org/wp-content/uploads/2021/08/GD...
- wcoenen 3y ago
  I think we are still a long way from "delivered". This is a proposal by the Commission. Next this needs to be approved by the European Parliament and Council. Then the ECB needs to decide on all the details (technical and otherwise). Then the ECB needs to build, test and deploy the system. Banks will still play a role so they will need to build, test and deploy their part as well. Then the system needs to work well enough and see sufficient adoption to be actually useful.

sigmar 3y ago

I don't understand (and don't see answers on Google) about how an "offline digital euro" would work. Unless the EU comes up with some magically unhackable hardware/software combo, or the 'offline' transfers are explicitly not trustless (ie- I can see your digitally-signed transfer of 5 euros, but will only be able to verify that it settles when I eventually get a connection)

papichulo2023 3y ago
Cash is also hackable (even more so) so I dont think that is a blocker. And about the online thing, we are moving towards a always-online-world fairly quickly.
- sigmar 3y ago
  yea, maybe they're thinking it'll look like a combination of both- using smartphone secure element and less trust in settlement of the transfer. It sort of makes me think of the xkcd comic though: some EU official was like "just make digital currencies settle offline, how long could that take, a year?" https://xkcd.com/1425/ https://xkcd.com/1425/
- eggy 3y ago
  Yes, but if you have the cash in your pocket, it's not. Robbery is not hacking, and you can confront your robber. Hacking allows nerds to dip into thousands of pockets with hardly a chance of getting caught. The modern world and its youth seem to be very eager to live the digital life and give up all under the guise of "I have nothing to hide" as justification for surrendering liberties. Government centralized digital currencies are the beginning of the end. Europe was heading for the dark ages again, and this will only speed it up.
KRAKRISMOTT 3y ago
You would think with all the "offline-first" blogposts dominating HN's front page right now, people here would have some faith in CRDTs and conflict resolution algorithms.
imtringued 3y ago

eggy 3y ago

I attended the first HOPE (Hackers On Planet Earth) 1994 and heard a panel speak that included Eric Hughes, famous for the Cypherpunk's Manifesto among other things, about cryptography, banking, cypherpunk, etc. This was 15 years before the blockchain paper by Satoshi Nakamoto in 2008 and the start of Bitcoin on the market in 2009. The dream was to have anonymity and privacy for everyone. It would also eliminate the middle man. When you buy a late at Starbucks, it goes through at least 4 or 5 agencies, and they all take a cut, and track your information. Due to typical scare tactics, "drug dealers and pedophiles will use it to avoid prosecution", like cash was never used anonymously for drug deals! Also a few bad players in the crypto market didn't help with the reputation. However, to totally cave and move to centralized government control of your wallet is insane. Yes, you already have a lot of that with ATMs, debit cards, credit cards, Paypal, Apple and Google, but now you are going to put it all in one basket? It's bad enough paper money is now just a joke without a gold-backed or other real world commodity, just print as much as you can to keep the average joe/jane in the dark about how bad the value of the currency really is. Europe is going to crash hard economically for many reasons in the coming years, and this will give the government the power to control the populace even more when it does.

imtringued 3y ago
>It's bad enough paper money is now just a joke without a gold-backed or other real world commodity, just print as much as you can to keep the average joe/jane in the dark about how bad the value of the currency really is Why does this matter? According to Fisher Black people just substitute the money they don't want with the money they want. So far the only widespread substitution that is happening is boring fractional reserve banking. Barter clubs are an unimportant niche. For everyone else they can just trade their money for something that matches their philosophy better. If you think gold is the right choice, then don't force it onto other people. Also, the value of money today is mostly backed by contractual obligations, so the situation is actually pretty good.
jacooper 3y ago
Honesrly why should i deal with the risk of a bank going out of business, because of some stupid management mistake? Banks are directly connected to the government, might as well skip the middle man and put my money direct with the government then. Also this doesn't replace the current euro, its a new type of Euro with a separate account and payment system and so on.

TurkishPoptart 3y ago

Why? What problem does this solve? Our money is already digital; with my tinfoil hat on, this just seems to give the government way more control over the monetary supply than it deserves.

gbalduzzi 3y ago
It avoids having companies (mastercard / visa) as digital currency middleman, taking a cut for every money you move.
nabla9 3y ago
Today only banks have ECB accounts. It allows individuals and regular business to have access into central bank money directly. (it's not mentioned anywhere, but if ECB wants to do quantitative easing in the future, it could give every EU citizen 100 EUR directly, so called helicopter money. It would be the most effective way to do monetary easing and would allow many negative effects of QE trough banks)
imtringued 3y ago
What do you mean by more? It already controls it. No CDBC proposal is about getting rid of banks or minimum reserve requirements below 100%. I understand the privacy concerns because bearer bonds are illegal or impossible to issue nowadays so getting rid of cash would be a death knell but that isn't your concern.
leobg 3y ago
Search HN for “Ask HN: Stripe froze my account”. Make no mistake, I don’t like the government. But at least I can sue the government if they do something that jeopardizes my business without a solid reason. With these private companies, posting a cry for help on HN is pretty much the only thing you can do.
- JimtheCoder 3y ago
  "But at least I can sue the government if they do something that jeopardizes my business without a solid reason. " What country are you from, if you don't mind sharing? To me, as a North American...this just sounds implausible.