Best, Sebastian

PS. I copy a background article from the Berlin-based daily Tagesspiegel, which really captures the essence of my talk.

Digitaler Euro: Nur „Zentralbanken-FOMO“?

Der digitale Euro befindet sich derzeit immer noch in einer Konsolidierungsphase, wie der Medienwissenschaftler Entscheidung der Europäischen Zentralbank aus, ob das Projekt in eine Umsetzungsphase übergeht. Nachdem mit dem Libra- beziehungsweise Diem-Projekt von Meta Zentralbanken aufgewacht seien und reihenweise „Zentralbanken-bekommen hätten, sei die Arbeit am digitalen Euro vorangegangen und befinde sich nun in einer kritischen Phase. Das sei Grund genug, die Einbindung der Zivilgesellschaft nun tatsächlich einzufordern, meint Gießmann.

Aus seiner Perspektive ist der digitale Euro im besten Fall eine Möglichkeit für Europa, seine Zahlungssouveränität wiederherzustellen, nachdem diese in den vergangenen Jahrzehnten an ausländische Zahlungsdienstleister nach und nach abgegeben wurde. Außerdem könne auch die Art, wie wir in Europa „peer to peer“ bezahlen, etwa in Familien, positiv verändern. Allerdings nur unter bestimmten Bedingungen. Es dürfe kein Projekt „der Finanzindustrie für die Finanzindustrie“ werden. Kaum jemand wisse, dass die EZB vor wenigen Tagen die Ergebnisse von Prototyp-Studien für den digitalen Euro veröffentlicht hatte. Zwar wurden diese zum Großteil von europäischen Unternehmen entwickelt. Warum ausgerechnet der US-Konzern Amazon allerdings den Prototypen für den Anwendungsfall E-Commerce entwickeln durfte, sei „ein Rätsel“.

Wie auch Lindner glaubt Gießmann, dass ein hohes Datenschutzniveau für – im Unterschied zu Paypal & Co. – tatsächlich anonymes Bezahlen, der wichtigste Punkt ist, wenn die Bürger:innen den digitalen Euro als Zahlungsmittel akzeptieren sollen. Eine EU-Konsultation im vergangenen Jahr hatte erhebliche Skepsis der Bevölkerung in dieser Hinsicht offenbart. „Unser Kapital ist nicht das Gold im Keller, sondern das Vertrauen der Menschen in uns als Zentralbank“, hatte David Ballaschk von der Deutschen Bundesbank am Montag bei seinem Vortrag zum digitalen Euro als neues Zentralbankengeld unterstrichen.

Für echte Transparenz brauche es zusätzlich aber Open-Source-Lösungen und „öffentliche Tests – keine Tests im Hinterzimmer“, forderte Gießmann. All dies vermisse er noch. Zum digitalen Euro als staatliches IT-Projekt äußerte der Wissenschaftler sich vorsichtig positiv, denn: „Staatliche IT-Projekte können nicht nur gelingen, sie müssen es auch.“

Related posting by Eduard de Jong on the MoneyLab email list

From: Eduard Karel de Jong <eduard@dejongfrz.nl>

Subject: Re: MoneyLab conference in Frankfurt on CBDC?

Date: 5 June 2023 at 9:48:09 am GMT+2

Hello all,

The prototype is based on a design that is different from what has been proposed by the ECB earlier this year in their  technology investigation. The key shared technical feature is the use of pseudonymous account data base maintained by the Eurosystem (=ECB+CBs).

The shared business feature between these too is that access to the digital euro funds can only be via existing intermediaries.  the intermediaries know about the payment of each used as they have to determine authorisation. There is some hand waving that in the future other parties, a.k.a fintech, could become intermediaries too, with market magic making things cheaper, but still profitable.

The banks and other intermediaries apparently have been successful in capturing the CBs. Starting form some abstract societal goals the technical design for the digital euro now implicitly, tacitly, reinforces the role of banks in the payment system in a future digital euro as essential for intermediating payments.

A non-intermediated digital payment instrument is possible, which would disrupt the cozy rent-seeking position banks, PSPs and FinTechs have created for themselves. With the hype built up around CBDC on both the left and right as instrument of future extended state suppression it will be a challenge to get the societal, political support to get a CBDC deployment that includes non-intermediated digital payments.

A discussion that focuses on technical design aspects might leave the bigger issue unaddressed: why do we as a society need a digital euro? And what should that do for us? Both the Vehblen institute and Positive Money are engaged to get answers to these questions.

The ECB and member-state CBs have people dedicated to the digital Euro, and I think it won’t be hard to find some of them who would be willing to participate in an event to discuss their project.

Do we have a theme for this moneylab?

Cheers, Eduard de Jong

Sebastian Gießmann wrote on 04/06/2023 08:06:

Hi everyone,

the ECB has published a paper on their commissioned prototypes for the Digital Euro on May 26: https://www.ecb.europa.eu/pub/pdf/other/ecb.prototype_summary20230526~71d0b26d55.en.pdf?1de0a9294f785fcbe59e163bd079fc23

I’ll try to unwrap its technocratic discourse at re:publica. There seems to be a sustantial tension between official statements by Fabio Panetta and the technical work on a proof-of-concept …

Plus, we should be able to see and test the prototypes ourselves! I’ll surely make a case for that! This whole ECB plus European payment industry plus Amazon configuration is pretty messy. But I really wonder how to get the central bank(s) aboard for MoneyLab, since there will be no change without them.

All the best, Sebastian

Am 14.05.23 um 21:19 schrieb Eduard Karel de Jong:

All,

There is indeed a lot of talking being done these days on CBDC. Two recent reports, by MIT Medialab and Vehblen, respectively, shine a clear critical light on the design ideas for CBDC that are being proposed by various central banks. The Positive Money think tank also has a some publications on this topic. Those reports point to a CBDC that should not be based on accounts with intermediated payment(MediaLab). On the other hand bank accounts with the main feature  that they are universally accessible (Vehblen, Positive Money), a so called ‘cash-like’ account., or alternatively as a standalone, comprehensive e-cash system (Vehblen). A summary of political objectives for a CDBC I worked upon with Peter Cattaneo (in the CC) can be found at my website. <https://eduard.dejongfrz.nl/papers/latest-digitaleuropolitics.pdf>

On that technology option, an offline digital payment system with e-cash stored in computers operated by the owners of the money, there exists a knowledge gap on the available technology that can implement such a system at the large scale of country like the US or the EU. And keep it operating safely. I wrote two papers(*) on one technical solution that fits that bill in the hope to fill that gap.

Currently here are proposals by the Bank of Englnad, ECB and Fed, neither of them seems ready to launch a CBDC before ’27 or ’28. Other CBs push ahead on their own without much consideration for privacy, financial inclusion, or other lofty objectives.  There is one industrial offer, from the German bank-note printing company G+D, that’s being trialed in Ghana. The crypto believers are still onto it, and the cross-border payment feature for CBDC seems to be heavily pushed from those quarters, likely as they believe blockchain/DLT could be used to do that. At least that is been tested in a trial (mocked) by a BIS Innovation Center. Apart from some ‘developing’ nations there is no appetite for DLT as CBDC. My suspicion is that these countries got offers by the DLT provider they could not refuse…

There is a lot of lobbying by vested interests, banking, Big IT, FinTech, DLT to prevent damage to their current or expected profitability of digital payments.

By the fall the investigative phase for the ECB into a digital Euro will be over. That will not be then end, I guess, rather I expect that the political debate will likely heat up as the ECB is presently on a course that is rather plying to the pressure by banking lobby.

The ideal CBDC will be the true digital equivalent of cash, universally accessible money stored in a personal secure device. To pay offline and online. Payment without fee, with full payer anonymity. Pay in fiat currency or simultaneously in a complementary currency,  secured by the same device. Such e-cash will in many ways be better that physical cash.

The political fight this autumn will likely be to make e-cash the way that the EU, UK and USA do their digital currency. And so push bit-tech and banks out of their rent seeking position/role in money&payments.

In that fight some kind of conference could be a vehicle to explore how such an universally accessible digital currency can be used in the online world. Now that we know digital money won’t be DLT/Blockchain based, we can ignore the crypto-anarchists’ wet dreams and focus om ideals that are more anchored in reality. Another question we could explore is on how to support the continued use of traditional cash, and in what the e-cash could help there.

Just my couple of (digital,virtual) cents

Cheers, Eduard  (*http://bit.ly/3I9klhm and https://eduard.dejongfrz.nl/papers/latest-howkingreturns.pdf)