Depends. With a digital euro, you can safely stash away your money without having allowing private banks to make a profit out of it. Same goes with transactions. Firms like Visa or Mastercard won’t turn a profit out of it. Of course there are many disadvantages as well.
With a digital euro, you can safely stash away your money without having allowing private banks to make a profit out of it.
According to OP’s article, the ECB is specifically aiming to make the digital euro not viable for storing a bunch of money, so I don’t think that that’s a target use case.
Sources with knowledge of the procedures explain to Capital.gr that the digital euro will take the form of a wallet that citizens will “load” with euros from their bank accounts. This means that the role of commercial banks is not canceled with the launch of the single digital currency, but they will still be an important part of the ecosystem.
For this reason, it is being considered to introduce a ceiling on the liquidity that citizens will be able to maintain in digital euro, in the order of 2,000 or 3,000 euros per user. The goal is for the digital euro to be used purely as a means of exchange and not as a means of accumulating wealth.
Would be interesting if there was a limited supply.
Otherwise I don’t see the advantage, it is still being controlled by a central entity.
Depends. With a digital euro, you can safely stash away your money without having allowing private banks to make a profit out of it. Same goes with transactions. Firms like Visa or Mastercard won’t turn a profit out of it. Of course there are many disadvantages as well.
According to OP’s article, the ECB is specifically aiming to make the digital euro not viable for storing a bunch of money, so I don’t think that that’s a target use case.
Indeed, I remembered when the ECB first talked about it (2-3years ago) and I read the article diagonally.
But it still, most people could get rid of their cash bank account as most people earn less than 3k€net per month and just keep a saving account.
All in all, I’d still argue it’s a not-so-bad initiative, especially for small businesses who pay a hefty fee per transactions
And then where would lending and borrowing money come from?
It would still be banks. Owning a bank account would just not be mandatory anymore.