I started writing about the disruption that blockchain and crypto assets would bring when Facebook first announced the intention to launch Libra in 2019 with a consortium of 28 companies to develop its distribution ecosystem. A lot has happened since then and at no point has Facebook given up on its ambitions in redefining the payments landscape.
Hereby, the Digital Euro Association (DEA) announces the DEA Thesis Award, a call for theses on the digital Euro. Paper topics should cover either the public digital euro in the form of a central bank digital currency (CBDC) or the private digital Euro in the form of euro stablecoins, tokenized commercial bank money, etc. Note that this is not a call for academic papers but instead targets student papers that have been submitted at academic institutions all over the world as we want to encourage young students to research these topics. With this first call for papers, the DEA awards the best and most innovative theses around the digital Euro to contribute to our mission of supporting education around the digital Euro.
Episode 4: Why do we need a digital euro, who will create it and when will it exist?
In the fourth and final episode of the four-part series on the digital Euro, Alexander Bechtel and Manuel Klein address the crucial question of why the euro should be digitized and which institution will ultimately provide it. After a detailed analysis of the existing money system in the first episode, as well as a description of the digital euro issued by the public and private sector in the second and third episode, the last episode provides an outlook into the future and presents concrete use cases of the different forms of the digital Euro. The goal of the episode is to understand which benefits a Digital Euro will bring, which institutions will provide it for which purposes, and when we will see the Digital Euro.
In the beginning of the episode, the different motivations to create a Digital Euro are presented. Here, Alexander and Manuel distinguish between the technological perspective of end users - especially in the financial and manufacturing industries - and the perspective of central banks. The aim of this episode is to understand that central banks have different motives for issuing digital money than some tech-savvy citizens might assume. This is because, unlike what you often read in the media when CBDC is discussed as the savior of the blockchain-based economy, central banks are much less focused on the technical side of a digital euro than it seems. Rather, it remains unclear whether a retail CBDC will be built on "state of the art" blockchain technology which enables machine-to-machine payments and programmable payments.
Moreover, it remains unclear whether a wholesale CBDC will soon be available to meet the demand for the technological benefits of blockchain technology in the financial and interbank payment-system and digital capital markets. Alexander and Manuel therefore look into the future of money, describe which institutions are likely to provide the tokenized digital euro for which specific use cases and when to expect the respective forms of the digital euro.
Finally, they summarize the past four episodes in three "key takeaways." These points should help listeners remember the core theses of the large content of the past episodes in order to have a say in the exciting topic of digital money.
Episode 3: Private Digital Euro
Episode 2: Public Sector Digital Euro (CBDC)
Episode 1: Digital vs digitized money: What is the euro and in which forms does it exist?
We are pleased to announce that cLabs has joined the DEA community and is now an active and supporting institutional member.
cLabs aims at creating global prosperity by building financial technology.
cLabs is working on celo, an open-source blockchain for peer-to-peer payments. Celo makes crypto and stablecoin payments accessible on mobile phones. Their stablecoins cUSD and cEUR enable safe and efficient cross-border payments and, thus, intend to foster financial inclusion globally. The DEA is convinced that the partnership with cLabs will be exceptionally valuable. The cooperation will help further support our mission to contribute to the public and political discourse on a digital euro.
The European Central Bank (ECB) recently announced that it will start an investigative phase of the digital euro project in Q4 2021. While this was not a big surprise to many who closely follow the worldwide discussions about CBDCs and digital money, the ECB released a very interesting report on experiments that were conducted over the past 9 months. This report and its results caught many by surprise. It shows that the ECB has already tested different technologies as the core infrastructure for a potential digital euro and investigates how to mimic cash-like privacy and offline payments in a digital world. This article provides a brief overview about the background of why the ECB looks into the digitization of physical cash, which experiments it has already conducted, and which results these experiments produced.
What did the ECB announce?
On July 14, the European Central Bank (ECB) announced the launch of a digital euro project, a project that will determine whether a central bank digital currency (CBDC) will be introduced in the euro area. The project will start with an investigation phase taking from Q4 2021 to Q4 2023.