What’s more to that, cryptocurrencies are not backed by a tangible commodity, such as gold, either. Cryptocurrencies, on the other hand, have been created by private individuals, a decentralized sui generis social contract which does not involve the a state or a central authority.
The citizens have “ signed” a social contract with the sovereign whose monetary “ organ” guarantees the value of the banknotes, despite them being made of paper. Traditional currencies are established by laws marking the government’s and the state’s central bank approval. The digital euro isn’t a cryptocurrency, such as Bitcoin or Ether, either. The digital euro might just do the trick. Various forms of Street Markets are yet to be digitalized. This will further propel the digitalization of economy and fill existing gaps, efficiently making transactions faster. The digital euro is a separate European “wallet”, which will also act as a complementary payment solution to the already existing third party infrastructure. The digital euro is not linked to a bank deposit which you can access with e-banking. This pathway of transactions mostly involve commercial bank deposits or a third party wallet. Hence, while we already use electronic money, third parties and intermediaries are involved with different standards and procedures. We use debit cards, credit cards and electronic payment solutions, such as Paypal. When we order from Amazon, we do not launch a dollar bill paper towards Jeff Bezos’ direction. At the same time, given that the movement of individuals is restricted due to lockdowns, it is only natural that more and more people get acquainted with e-commerce. Despite lack of decisive evidence, people do believe that cash may be contaminated with the virus, as it has always been previously associated with carrying dirt, microbes and even particles of drugs. Moreover, the process of the development is accelerated by the changing behaviour of consumers within the environment Covid-19 pandemic. Digital Euro is one of them, with a special European Task Force unit working on this project since January of this year. As a statement of innovation and a reflex of defence, numerous countries are developing their own Central Bank Digital Currencies (CBDCs).
Furthermore, the uncertainty of the cryptocurrency and stablecoin markets warn us that private actors, once again, may evolve into a threat to financial stability of the Europe Union and its broader economy. Paying with your, mostly debit, card has become a habit and vendors do no longer roll their eyes because they have to boot the POS machine it is already powered, linked and waiting.
In fact, the amount of electronic payments has more than tripled between the years 20 1. This article is based on the information contained in the report released by the European Central Bank regarding the perspective of the Digital Euro.Īlthough the aforementioned statement sounded outrageous at the time, which is completely justifiable, that is exactly the direction towards which Greece has been heading, along with the rest of the Eurozone. When the scenario is repeated thousands of times by thousands of individuals, however, the loss is significant. Not much difference is seen if a case is isolated to one individual buying a bottle of water from a kiosk without a receipt. An everyday transaction involving cash may take place without the issuance of a receipt, whereas electronic transactions require an authentication process which is also reflected on a mandatory receipt. Along with other benefits, tax evasion would be diminished. He strongly recommended that paying with a card or electronically would be the rational choice, as banks would have larger deposits at their disposal allowing them to function more efficiently. He frowned upon keeping cash “ under a mattress“, completely disregarding the public sentiment that banks were unreliable during those times. I still remember the criticism raised by a politician at a conference hosted by the Hilton, an iconic hotel in Athens, in connection with how cash is perceived by an average Greek citizen. The year 2015 brought more than just capital controls to Greece, one of the changes being the rise of electronic payments.
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