Analysing the proposal to regulate the digital euro(blog.xot.nl)
blog.xot.nl
Analysing the proposal to regulate the digital euro
https://blog.xot.nl/2023/12/04/analysing-the-proposal-to-regulate-the-digital-euro/index.html
1 comments
The article is focusing on the technical side, but the economics are also silly. The ECB says that the Digital Euro will be free of charge for consumers as a "public service". And that it will ensure low fees for merchants because of mandatory acceptance laws. But they also claim that the Digital Euro will be operated by commercial payment service providers. So who will be in the business of operating a public service where they only can charge low, capped fees from merchants? Obviously the existing high-fee payment service providers will not line up here to ruin their working business models. However, the model will work for one group: criminals, that basically run completely insecure low-quality payment services and that fail to provide good customer service or even steal customer's money at a large scale. That business model will work, because the Digital Euro is designed to be a liability of the central bank, even though the operation will be done by commercial operators. So they didn't just mess up the technology (as you would expect from big government), they also messed up the economics (which may surprise some, given that this is largely a central bank proposal).