As an analyst with a background in finance and privacy concerns, I find the ECB’s digital Euro CBDC initiative troubling. While the bank emphasizes privacy and data protection as top priorities, the features outlined in the progress report raise red flags. The ability to limit how much of the currency people can hold and monitor financial transactions online opens up opportunities for increased surveillance and control.
As a crypto investor, I’ve been closely following the developments of the digital Euro Central Bank Digital Currency (CBDC). On June 25th, the European Central Bank (ECB) released an update on its two-year preparation phase for this project, which is set to conclude in October 2025.
Despite the central bank’s emphasis on privacy and data protection as its main concerns, several troubling aspects of the currency contradict this statement.
On June 26, crypto entrepreneur and investor Daniel Batten highlighted a few of them.
JUST IN: ECB announce first progress report on the digital Euro
As a researcher studying the implications of digital platforms, I’ve come across certain features that can impact user experience and control:
— Daniel Batten (@DSBatten) June 26, 2024
Central Bank Surveillance
As a researcher exploring central bank digital currencies (CBDCs), I would describe them as digitized funds issued by central banks that operate on a blockchain and are regulated by smart contracts. This setup enables banks to manage the quantity of the currency in circulation, effectively acting as the issuer and controller.
As a financial analyst, I would recommend the European Central Bank (ECB) implement a measure to ensure a robust financial infrastructure. Specifically, this could involve setting a restriction on the maximum amount of digital euro that individuals can hold in their respective accounts.
As a crypto investor, I believe the ultimate goal is for me to phase out the use of physical cash and conduct all financial transactions digitally. This way, every transaction can be monitored and tracked for security and transparency purposes. The European Central Bank (ECB) clarified that their imposed limits on digital Euro are not meant to completely eliminate its role as a store of value but rather to control its usage in this capacity.
This maintains banks’ crucial function in facilitating economic credit, the statement continued. Notably, banks would gain the ability to monitor individuals more closely, disconnect them from the system if desired, and restrict their accounts. Previously, Batten expressed concerns that institutions like the ECB were collaborating to weaken cryptocurrencies and financial autonomy.
As a crypto investor, I’d explain it this way: With the Central Bank Digital Currency (CBDC), you can enjoy offline transactions, providing you the convenience and privacy of cash. By pre-funding your account, you can make payments even without an internet connection.
Observers have noted that a potential Euro Central Bank Digital Currency (CBDC) would rely on the central bank’s database for operation, potentially undermining the privacy claims of the bank. However, the EU regulatory procedure must be finalized, and the preparatory stage must be concluded before a decision on issuing a Euro CBDC is made.
Back in October 2023, during the early stages of preparation for the digital Euro, I, as a concerned crypto investor, heeded the warning from fintech entrepreneur Kim Dotcom. He emphasized that the digital Euro was not just a new form of currency but a potential tool for financial surveillance and control. According to him, this would pave the way for digital IDs and social scores, and those who voiced or acted against the authorities’ liking risked having their funds frozen.
CBDC Pilots Increasing
As a researcher studying monetary trends, I can tell you that Europe, along with various other nations, is determinedly working towards eliminating physical currency and transitioning to a digitally managed central bank currency instead.
Based on information from the Atlantic Council, just three nations have released their central bank digital currencies: Nigeria, the Bahamas, and Jamaica.
Thirty-six central bank digital currency (CBDC) projects are currently underway around the world, involving countries such as Europe, China, Russia, Brazil, India, Japan, South Africa, and Australia.
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2024-06-29 20:38