Digital Euro: ECB starts test phase from mid-October – This idea originally came from the author of this news

Digital Euro: ECB starts test phase from mid-October – This idea originally came from the author of this news

Comment, on my own behalf: In 2008, as chairman of the BDOA, I happened to have a two-minute one-on-one conversation with the then President of the ECB, Jean-Claude Trichet. At that time I convinced him of the necessity of my idea that the ECB should also bring out cash in digital form. Something completely new at the time and something that first had to be explained to experts. In 2008 and 2009 we had various discussions in and with the ECB, supported by the HDE, EuroCommerce, the bvh and the law firm GSK & Kollegen, among others. Bitcoin was also created in 2008. I was aware of the political explosiveness and the threat posed by a Facebook currency, for example. From my Cologne university professor Prof. Karl-Heinrich Hansmeyer († 2007) I had learned in the 80s that an economy that no longer controls its money economy will eventually lose its political legitimacy (maybe THAT was also one of the central Reasons for the then rapid demise of the “GDR”?). What would happen if international corporations now emit their own virtual money (digits that are accepted with the monetary functions of storage of value, means of payment, calculation size, speculation, value compensation) out of nothing without counter-coverage and give this to consumers who are as willing as possible to work for them ? In my opinion, that would inevitably be the beginning of the end of our free democratic basic order. Out of this motivation I developed systems, registered patents and fought for the topic for many years, especially laughed at by many in politics who thought they already had everything under control. Even the mid-level staff in the administration of the ECB were not interested in this topic, as it probably did not promise enough prestige for real central bankers. Often the smiles came from politicians who were not even familiar with the principles of the money economy. They had no idea, but they already had an opinion. Thanks to its ingenious and committed President Lagarde, the ECB has recently pulled itself together and is testing procedures. From my point of view, unfortunately, the completely wrong ones, because the distributed leger technology as a blockchain is in my opinion not at all suitable for a digital euro. Now hundreds of millions of euros or more in consulting fees and donated research projects are being distributed to the usual suspects. Unfortunately, today’s events are far removed from our idealism at that time (we all did this as a sideline to our daily work and responsibility, without any prospect of payment). Even more: the ECB does not even see the threat in strategic and political terms. As I read it, she is primarily concerned with two things: First, the preservation of the seniorage profits of the commercial banks. In other words, about their ability to conjure up additional liquidity themselves, for which consumers still have to pay hefty interest and thus generate inefficient profit from an economic point of view. And secondly, to prevent the threat that payment transactions themselves no longer take place in the traditional banking sector and that strategic information options may be lost. Quasi: “You are welcome to have Bitcoins, Ether, Tether, XRP, etc., but then please only clear with us …”. Yes: I also absolutely believe that state authorities, in order to combat money laundering, terrorist financing, etc., must be able to inspect larger flows of money, e.g. from EUR 400.00. I too strongly believe that in our tried and tested two-tier banking system (central bank commercial banks) we must also enable commercial banks to make a reasonable profit for their important functions. However, banks only manage the values of their customers (deposit business) and are not there to artificially keep unsuitable business models alive through irresponsible further lending, as Alfred Herrhausen presented to us young studies at Cologne University in 1988. Shadow banking monsters that are currently rampant and, in my opinion, unsuitable attempts at a real digital cash euro are still causing me great economic and political concern for the future. (Manfred Wolff)