Digital Euro CBDC – Is THIS The Year?! Latest Update!

Over 90 percent of central banks around The world are working on Central Bank Digital currencies or cbdcs Cbdcs will make it possible for the Government to control how you spend and How much you can save the prospect of This power has been especially appealing To the European Central Bank or ECB and It has been rushing to roll out its Digital Euro before it's inherently Unstable monetary Union implodes so Today I'm going to summarize a recent Progress report about the digital Euro Published by the ECB explain what it Says in simple terms and tell you what It means for other cbdcs and Cryptocurrency The progress report I'll be summarizing Today is titled quote progress on the Investigation phase of a digital Euro Second report and it was published by The ECB in late December last year I'll Leave a link to the full document in the Description along with a link to our Previous video about the digital Euro Now the report begins with a bit of Background about the digital Euro the Authors explain that the ECB has been Actively exploring a digital Euro since October 2021. this is shortly before the Crypto Market peaked which is not a Coincidence the ECB has explicitly Stated that it sees stable coins as Competition the authors then revealed

That the ECB has been an active Discussion with entities in both the Public and private sectors about the Development of its digital Euro the Authors specify that consultation with The private sector has been happening Via the Euro retail payments board which Was founded in 2013. on that note you Should know that there are two types of Cbdc wholesale cbdcs which will be used By select individuals and institutions And Retail cbdcs which will be used by Regular People Like You and Me In other Words there will be two cbdc systems one For the elites and one for everyone else Naturally the ecb's progress report Pertains to a retail cbdc not Surprisingly the authors note that the ECB will quote retain full control of Digital Euro issuance and settlement What is surprising is that the authors Claim the ECB will not be able to see How much digital Euro end users hold With intermediaries this is surprising Because the ECB and others have Repeatedly stated that privacy will not Be possible with cbdcs however I suspect That Financial intermediaries such as Mega Banks and asset managers were not Fans of this I reckon they need privacy To continue doing Shady stuff behind the Scenes case in point the authors clearly State that it will be up to these Financial intermediaries to handle all

Due diligence kyc Etc in theory this Means that this information would only Be accessible by these Financial Intermediaries but in practice it's Possible that the ECB has created a Secret privacy loophole now obviously The absence of privacy in cbdcs is Extremely unpopular and not just with Big money managers it seems the eu's Solution to this problem is to allow Intermediaries to hold the information But require them to share it with Governments via the data governance act And data act more about those in the Description I digress The authors reveal that a so-called Digital Euro scheme will be established In partnership with the private sector Which will quote establish a set of Common rules standards and procedures For this setup they also reveal that This digital Euro scheme will start to Be drafted in January 2023 which is well Now The authors then conclude the Introduction with yet another important Revelation quote the European commission Intends to propose a regulation to Establish a digital Euro in the second Quarter of 2023 and has started Legislative preparations this means we Could see a digital Euro live by 2026 Even by 2025. now the next part of the Report references the first digital Euro

Progress report published by the ECB in September 2022. this first report Explained the rationale for introducing A digital Euro and its initial design Options what's odd is the ECB apparently Did not announce the publication of this Earlier report I take this as a sign That they don't want too many people to Read it which is why I'll take the time To quickly break it down for you here so Like the second progress report the First progress report begins with a bit Of background round about the digital Euro it talks about lots of the Dystopian stuff I mentioned earlier for Example The authors talk about quote limit and Renumeration based tools in the design Of a digital Euro to curb its use as a Form of investment this is code for Setting limits on how much digital Euro You can hold and introducing negative Interest rates that slowly delete your Savings to incentivize spending The authors then revealed that quote the Body in charge of steering the digital Euro project is the high level task Force on Central Bank digital currency Hltf cbdc which is composed of Representatives from the ECB and the National central banks of the Euro area First I've heard of them and what's Strange is I can't seem to find any Information about this organization that

Said they seem to be related to the Aforementioned Euro retail payments Board given that they share the same President however this infographic Suggests they are two separate entities Typical EU bureaucracy anyhow the Authors go on to list the Characteristics of the digital Euro they Start by saying that the digital Euro Will not replace cash This is surprising because the ECB Suggested in previous cbdc reports that It wanted to eliminate cash and all Other alternatives to ensure adoption of Its digital Euro the authors also state That the digital euro is not just an ECB Initiative but a quote common European Project which involves a quote very Diverse set of stakeholders this reminds Me of world economic Forum founder Klaus Schwab's comments about how the weft is Where such stakeholders gather more About the weft in the description moving On The second section of the first report Details why a digital euro is required The authors list off the usual reasons Including digital payments ensuring that The ECB maintains control of the Currency preventing the EU from falling Apart and peer-to-peer payments two of These reasons are not like the others The authors also provide this handy Infographic which appears to underscore

The idea that the digital euro is meant For the plebs and not for the elites Outside of the digital Euro bubble you Have big business and big Tech and Within the bubble you have small Business the government and the average Person This ties into the third section of the First report wherein the authors unpack A few of the possible designs for the Digital Euro as you can see the ECB is Not actually a fan of peer-to-peer Payments because it removes the need for Intermediaries and that would be very Bad news for the big Banks instead the ECB wants most digital Euro transactions To involve an intermediary which means Of course big Banks I should note that This is something that central banks Have lamented they don't actually want To work with the big Banks either but They don't have the infrastructure to Support a payment system the fact that The central banks need the big Banks is Probably what gave the latter The Leverage to implement some degree of Privacy for the digital Euro as it so Happens part of the first report is Dedicated to privacy and the authors Start by reiterating that it's the Primary concern for users quote in a Public consultation conducted by the ECB In 2020 43 of respondents ranked privacy As the most important aspect of the

Digital Euro well ahead of other Features unfortunately the authors also Reiterate that full anonymity is not Possible with the digital Euro and not Just because of crime the authors Explained that if the digital euro is Anonymous then it would be possible for People to protect their purchasing power By holding lots of cbdc this is Something the ECB doesn't want for quote Financial stability reasons as such the ECB wants a similar level of privacy to Existing digital payments the authors Also discussed the possibility of Introducing quote selective privacy for Low value or so-called low-risk digital Euro payments this selective privacy Could also be applied to offline Payments and peer-to-peer payments Something tells me the threshold here Will be very low Speculation aside another subsection in The first report is bluntly titled quote Tools to control the amount of digital Euro in circulation the authors note That the ECB will pay close attention to Financial stability and will ensure that The digital euro is designed to minimize The risks to financial stability say the Financial system sounds awfully unstable Surely it has nothing to do with Centralization In all seriousness the authors also note That the ECB could set different types

Of restrictions on different amounts of Digital Euro Holdings to disincentivize Excessive saving incredibly the authors Admit that it won't be possible to know Exactly what effects a digital Euro Would have on the financial system to Ensure that the ECB can handle all the Possible outcomes the digital Euro would Be designed so that almost anything can Be done with it this includes limits of Offline Holdings of digital Euros Transferring your digital Euros to other Institutions and automatically Exchanging your digital Euros for other Assets Now the first progress report Concludes with the authors emphasizing That a digital Euro may not need to be Introduced and that this will be decided Later this year specifically October This is yet another surprising opinion Pivot the EU seems to have been dead set On the release of a digital Euro I have A hunch that this Sudden Change relates To circle the issuer of the usdc Stablecoin circle created a Euro stable Coin last year and it's quite possible That it could act as a de facto cbdc for The European Union this possibility has Been discussed before and it's something Circle is positioning itself for more About Circle in the description Anyways with all this context in mind we Can return to the second progress report And see what happened between September

And December I'll start by saying that The ECB seems to have accelerated their Timeline this could be a sign that They're rushing or that the digital euro Is dead in any case the first part of The second report Dives deeper into the Design options of the digital Euro this Is where the ecb's private sector pivot Becomes apparent the author State quote The close involvement of the private Sector is seen as a key factor for Successful implementation of a digital Euro the authors go as far as Acknowledging that the ECB doesn't have The infrastructure or experience to run A payment system I must stress how Unprecedented this is The ECB has historically been very Hostile to the private sector heck they Called these intermediaries monopolists Just a few months ago don't get too Excited though because the authors Repeat that the ECB will ultimately have Control over the issuance and settlement Of the digital Euro they also repeat That the role of these so-called Supervised intermediaries will be the User-facing side apps websites wallets You name it this is actually a bit Peculiar because the EU is in the Process of creating its own digital ID Wallet you heard that right a digital ID With a built-in wallet The eu's digital ID wallet is set to be

Released in 2024 or 2025 just like the Digital IDs in most other countries more About digital ID in the description Now you'll recall that the ECB wants Most digital Euro transactions to take Place with an intermediary AKA a big Bank this intermediation is discussed at Length in the next subsection of the Second report and you can see what roles The big Banks and the central bank will Play in the image here what's Interesting about this image is that it Appears the ECB truly won't have Oversight of digital Euro holders they Will only have oversight of the Intermediaries which will in turn have Oversight of holders but remember there Could be a back door here with those Data related regulations What's also interesting is that the way The authors explain this setup suggests That the digital Euro will be custodial This means that it will technically be The bank you use which holds your Digital euros and not you They also suggest that transactions Within the same bank will be faster as Is the case today what's even more Interesting is that the processing of Offline transactions will require quote Secure elements in Hardware devices Possessed by end users this begs the Question of whether the EU will mandate This kind of hardware on all devices

Sold on the continent and what other Stuff it could do and yet another Interesting thing is that the ECB hasn't Decided whether a distributed Ledger Technology will be used for the digital Euro it arguably doesn't matter as the ECB itself will be a single point of Failure due to its centralized control Of the system there will always be a Real risk of failure with such a setup After discussing how users should have The ability to seamlessly switch between Digital Euros physical cache and Existing digital currency the authors Introduced the so-called digital Euro Scheme funnily enough the scheme sounds Eerily similar to El Salvador's Bitcoin Legal tender law that's because it Requires every Merchant in the Eurozone To not only accept payments in digital Euros but also have the ability to pay Employees in digital Euros it also Requires that digital Euros be made Accessible to people who have no access To digital payments let's hope it Doesn't become mandatory anyhow the Authors explain that the ecb's digital Euro scheme will ensure that Intermediaries have the flexibility to Make a digital Euro work in a way that Doesn't totally mess up the financial System they'll basically be able to do Whatever they want with it so long as It's within the ecb's requirements you

Know Financial stability Etc This relates to the final section of the Second report and that's the next steps The ECB will take the authors reveal That for the remainder of the Investigation phase the focus will be on Programmability cross-border payments And the distribution of the digital Euro This includes things like user Onboarding now this is a bit concerning Because programmability means setting Limits on your ability to buy certain Things for well whatever reason many Have speculated that the digital Euro Will be programmed to limit how much of Something you can buy in the event of Say a global pandemic or another such Crisis regardless the ECB will be Presenting its finalized digital Euro Design to the EU later this year then The ECB the EU and other unnamed Stakeholders will decide whether it's Appropriate to actually create a digital Euro this is also scheduled to occur Later this year rest assured that I'll Be keeping you updated This brings me to the big question and That's what the ecb's progress report Means for other cbdcs and for Cryptocurrency let's start with the Former I have long suspected that the Central banks didn't have the capacity To roll out a cbdc in any meaningful way And the ecb's private sector pivot is

Proof of that it sounds like the digital Euro will literally just be another tab In your bank account it will probably be Required to pay taxes and to receive Stimulus money besides that it will be a Mostly benign asset so long as Alternatives exist the ECB will not be Able to exercise the digital Euro's dark Powers as it wants to it's a relief to See that the ECB is starting to realize That nobody will willingly adopt a Digital Euro and that it's extremely Unlikely that it will see any actual Usage outside of taxes and stimulus Payments look no further than Nigeria For evidence of that just 0 0.5 percent Of Nigerians have adopted the E naira After one year if you want even more Evidence consider that the bank for International settlements the bank for Central banks estimates that between 4 And 12 percent of citizens in G20 Countries will voluntarily adopt cbdc's This is consistent with the less than 10 Voluntary adoption of digital ID Projected by McKinsey and Co not only That but adoption is not the same thing As usage this was made clear in a recent Comment by a former official of the People's Bank of China who admitted that The actual usage of the digital Yuan has Been very low the fact that usage Couldn't be achieved despite China's Authoritarianism says a lot

As other central banks start to run into The same issues I truly believe that They will look to partner with Stablecoin issuers such as Circle to Find a solution that's more in the Middle alternatively the ECB and its ilk May simply opt to play the waiting game Take their time to phase out cash crypto And even gold the problem with that Approach is that it will only further Undermine trust in institutions around The world which has hit record lows in Almost every country as time goes on it Will become clear that the only digital Currency people will accept is one that They do not have to trust one which they Can verify that's awfully convenient for Cryptocurrency because most coins and Tokens are trustless To be clear this is not the case for Centralized stable coins most Centralized stable coins are not all That different from cbdcs except that Their transactions are public and Sometimes you pay high transaction fees That's why it's probably going to be a Different cryptocurrency that gets Adopted by central banks in the end I Want to say it'll be bitcoin's BTC but It's too valuable to be used for Everyday transactions that's why I think It will be a decentralized stablecoin of Some kind one that probably doesn't Exist yet ironically the eu's upcoming

Crypto regulations could create the Environment required for a robust Decentralized stablecoin to be built if This happens and I reckon it's Inevitable then there won't really be a Need for central banks at all anymore But that's not a discussion they're Ready to have just yet oh and you can Find out about the eu's upcoming crypto Regulations using the link in the Description description and that is it For today folks see you next time [Music]


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