Episode 1: Digital vs digitized money: What is the euro and in which forms does it exist?
In a four-part podcast series, Alexander Bechtel and Manuel Klein explain how the euro can be "digitized", which different forms the digital euro can take, and what hurdles must be overcome to make the digital euro a reality. Terms such as fiat money, central bank reserves, (synthetic) CBDC, stablecoins, the e-money token as well as tokenized commercial bank money will be defined and differentiated from each other. Look forward to four exciting episodes about the money system of the future. We help you to be able to participate in in-depth-discussions on the exciting topic of digital money.
The first episode, "Digital vs digitized money: what is the euro and in which forms does it exist?", explains how the existing money system works. This first episode provides an important foundation for the discussions in the next three episodes and is indispensable to understand the challenges that lie ahead of the digital Euro. Alexander and Manuel describe how today's euro is created through the cooperation of the central bank and commercial banks in a public private partnership and, in particular, shed light on the different roles the institutions have in the existing money system. A special focus lies on the differences between central bank money and commercial bank money. Furthermore, they discuss the accounting of the respective types of money and explain how the creation of money by central banks and commercial banks differs and how it is regulated.
The goal of the episode is to understand how today's digital processes in the transfer of money differ from the way digital money of the future might be transferred. Alexander and Manuel explain why the English language with its distinction between "digitalized" and "digitized" is well suited to describe the new, digital form of money. In the end, the two provide their definition of the digital euro.