Bye bye Visa, Mastercard, Paypal, and many others. They can go and play "America First". We'll have our own independent system by november 2025.
this post was submitted on 10 Apr 2025
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It's super confusing when anyone tries to explain it, but it's actually simple. You get a free as in paid for by the taxpayer bank account from the central bank and you will be able to use that card as freely as cash. No card processing fees, no account fees no nothing.
That said I'd be extermely sceptical about any plans since it would kill commercial banking in our current sense.
You know many countires have implemented something as simple as that. Singapore has PayNow, India has UPI, Thailand has prompt pay. And they've had it for about half a decade or more. West (EU, US, UK are catching up). Commercial banking is still alive in these Asian countires. And it's not so hard for banks to adapt.
It won’t kill commercial banks because there’ll be limitations. Biggest is you won’t be able to take a loan from the central bank, which is the largest slice of the pie for any bank making money. They can also put other limitations, such as no non-EU transactions, or having a max limit per month.
Yeah, but if everyone keeps their money on their dEuro account, what do banks loan out money from? Also most people don't need anything other than basic SWIFT transfers in their lives.
Not all your money. Most people have more than 1 bank account. So this won’t change that. Also SWIFT transfers also include international transfers, and most people aren’t doing that outside of rare instances. Digital currency is only within EU regions, so this solution won’t affect non EU transfers. As OP said the goal is to reduce commissions to Visa and Mastercard.
That's the western EU you are talking about. The average amount of bank accounts in Italy, Romania, Hungary is actually less than one, as in not everyone even has a bank account. A collapse of the Italian banking sector would still cause an EU-wide problem.
And the question is how much money will stay with commercial banks. If close to 100%, then the whole initiative is pointless since nobody uses it. If it's less than 50%, then that means that 50% of the money in the commercial banking system is gone.
I wonder how that would even work, since the CDBC should be fungible with the Euro. Does that mean I would not be able to pay someone in Albania in dEuros, only in physical Euros?
Even so, my point is that there is no point in creating another European payment system besides SWIFT, and if the new accounts could do SWIFT, then they can do most everything and they won't be limited to Europe. And even if they are, I imagine most payments - like 98%+ - of Europeans are within Europe anyway.
Yeah I think they want the front end experience to be as much like what we have now, but the inner workings of the digital euro (or any CBDC) is very different compared to what we have now.