All the good things a digital euro could do – and all the bad things it will
from Norbert Häring and current issue of RWER
On 2 October, the European Central Bank (ECB) announced in a press release that it intends to intensify its work on a digital euro. The ECB enumerated three scenarios under which it might want to issue a digital euro: (i) a sharp decline in the use of cash, (ii) “he launch of global private means of payment that might raise regulatory concerns and pose risks for financial stability and consumer protection” (read: Libra), and (iii) a broad take-up of central bank digital currencies (CBDC) issued by foreign central banks (read: digital yuan).
With a digital euro one could, if one wanted and was allowed to, actually do some good, namely:
- create a supplement for cash that protects privacy better than other digital means of payment,
- give citizens and companies an alternative to bank money which always carries the risk of bankruptcy,
- curtail the power of banks, by taking away or limiting their power to create money,
- help prevent a private company such as Facebook, with its own globally accepted currency, from crowding out the euro in payment transactions,
- prevent China from using its digital yuan to replace the euro (or the dollar) as a transaction currency.
On the other hand, however, it is also possible to do rather underhanded things with it, especially:
- facilitate and accelerate the abolition of cash in order to perfect financial control over citizens,
- defend and expand the sanctioning power of the U.S. government, with which it enforces its own law worldwide, including in Europe, in violation of international law.
I will briefly explain what a digital euro is and how it works. Then I will deal with the all-important questions of who controls it and to what end. read more
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—— Ugarteche, Puyana and Madi ——
Gerson Lima / Maria Alejandra Madi
Edward Fullbrook and Jamie Morgan
————— Michael Hudson ————–
Maria Alejandra Madi / Jack Reardon
————- Edward Fullbrook ————-
—————— Steve Keen —————–
————— Richard Smith —————
————– Gustavo Marques————
– Victor Beker and Beniamino Moro –
————– Lars Pålsson Syll ————-
—————– Stuart Birks —————-
Edward Fullbrook and Jamie Morgan
———— Armando Ochangco ———-
Shimshon Bichler / Jonathan Nitzan
————— Mauro Gallegati ————–
————— Herman Daly —————-
————— Asad Zaman —————
—————– C. T. Kurien —————
————— Robert Locke —————-
Several topics are handled by the article but some could be viewed from a different angle.
The privacy. In a civilized society, per today’s regulation against money laundering and organized crime, operating large amount of cash is largely prohibited. Banks are forced to report large cash withdrawals, thus this is the conversion from digital currency to physical cash. Stores ban large cash purchases as they are not allowed by the law.
So, the privacy and cash use is today really limited to small purchases. The same rule can be used to enforce the new central bank currencies. They could be used anonymously but up to a certain amount. The digital validation of the transaction could easily check for that limit to be observed. So, one rule could be easily implemented to be allowed to convert only few hundreds of bank digital currency to crypto- central bank currency. Anything above will be tagged as signed currency, no longer anonymous. So, each citizen can have two wallets, one private (optional) with a maximum limit of currencies and one signed and visible to regulators (fiscal authorities and anti-money-laundering forces).
To me, the ECB scenarios and the way they are listed highlights the real goal of the digital central bank currencies. The fight against the stablecoins. The middle point in their list.
The BTC and other stablecoins are a real danger to the world financial stability. I’m for banning the stablecoins. I don’t want for the government to lose the monopoly of currency control. The state is far from perfect in managing the printing. In fact, the last 10 years are a proof that the central banks are reckless and the law should guide the money flows to real projects not speculations. When the money funds want to invest tens of billions in a series of prime numbers instead of a bridge, an airport, a hospital or a train…. this tells you how insane the money printing has become.
I want to fix the Central Banks. I do not want for the world to abandon the fiat currency and all run to the hills hiding in a fix supply of crypto. The world was like that before, and it started exchanging goods instead of gold coins because they were too expensive and hard to find. The average and the poor were always deprived.
The state should not recognize private-based currencies. The state must not recognize any value associated with these currencies. Their markets are manipulated, are not regulated. I can create a market, issue a coin and manipulate it to be a million fiat. When somebody steals private crypto from an individual (hacking), the state must not recognize in a court of law any value associated with those claims. The only penalty to be given is the one of breaking an email account and reading harmless emails, a petty crime. A private crypto must not be evaluated by the state in any business. Converting it to fiat, yes, that calls for taxes to be gained. But that is all. And a commercial entity must be forbidden to convert its assets into private crypto currencies.
The SWIFT must ban conversion from crypto currencies into dollars. With the exception of specially created wallets that are watched by the IRS and which were approved to be open by the state. It is unfair for those who adopt the fiat digital currency to be scrutinized for anti-crime, while those who choose the private coins to bypass the law entirely. There is a law…. state, enforce it!
It begins …
Michael Saylor, CEO of a crypto-space startup suggested to Elon Musk
“If you want to do your shareholders a $100 billion favor, convert the $TSLA balance sheet from USD to #BTC. Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor.”
Elon Musk replied “Are such large transactions even possible?”
The state has tolerated corporations running with the profits into tax havens to avoid taxation. Now the corporations could render the fiat money useless as they begin printing their own currency (or capture a private one). These are the last months that the central banks and states have to understand that their ultimate power to do good, to fight world problems (including inequality), to control flows to socially important themes will simply be gone forever if the money is going to be captured by the big capital, and the last train to catch and act against it.