The digital euro

First of all we want to make sure that everybody knows the hard facts about that topic.

The European Central Bank is developing a prototype systeme at the moment. This system runs through a lot of testing processes before they publish any informations and details about it. Nevertheless there are a few interesting facts that we want to share with you!

Since the news got published, a lot of finance experts and journalists are warning about the negative effects that such a digital banking system would bring with. For example demonstrators in Hongkong got identified for taking part at a demonstration just with their online banking transactions. Of course this seems very worrying and for this reason a lot of privacy experts are turning crazy right now.  But the ECB assured that the data protection regulations will be incorporated at the "digital euro".

Not just the European Central Bank is currently working on a digital currency, a lot of well - known central banks are doing the same thing.

But why is everyone so convinced that a online currency would be such abgreat deal?

One advantage is the resistance towards crisis. It offers a stability for the financial ecosystem and is reliable in terms of insolvencies. The digital euro will be "cash like", that means that it will work like a cash payment - just online! At the beginning the digital cashsysteme is going to be limited on 3000,- for each bank account.

There will be two options of the digital euro - an offline and online version :

The online version is handled over a decentralised payment processor. There wonˋt be any big differences compared to payment pocesses that weˋre familiar with.

But itˋs a little bit more exciting with the offline version. The business is going to be transacted over a seperate bank card. It will be like a credit account. You can charge this card, the recharged amount of money will be saved on this card and every time you pay, the credit decreases. The offline version also relaies on decentralised systemes e.g. blockchain.

Of course there also a few negatives. The data protection is one of them. As the "Hongkong - dilemma" shows, data protection is a a huge point. Every transaction you take (no matter if you do it off - or online) will be tracked. Furthermore the ECB says that the digital euro should not be seen as a new currency.

Amazon got commissioned to create a prototype and implement them into their billing system. Of course the reactions about that "outsourcing" to a private tech concern followed immediately. A decision about the following steps will be made in October 2023. Experts consider such kind of banking systeme at the earliest 2026.

But weˋll see, what the future will bring!

What do you think about it? Would you like to have a digital currency and how would it effect your life?