Mean the end of Financial Freedom in Europe besides making memes to that effect informed ex users have also been factchecking Christine lards claim about the digital Euro using Community notes it’s safe to say that the push back has begun today we’re going to give you an update about what’s been going on with
The digital Euro explain what its next phase entails reveal when it could be launched and explore how you can protect yourself my name is guy and you are watching the coin Bureau I’ll start by saying that we’ve been keeping close tabs on digital Euro development over the last year or so to
Cap the European Central Bank or ECB released a working paper in August last year that detailed the economics of a central bank digital currency or cbdc if you watched our video summarizing that paper you’ll know that it implied that cash would be phased out and even implied that cbdcs would phase out
Stores of value like gold you’ll also know that it specified that cbdcs could be used to address quote moral hazards foreshadowing total control seriously give that video a watch when you get a chance it’s damning in every sense of the word now back in January the ECB released its second progress report
About its cbdc development if you watched our video summarizing it you’ll know that the first progress report was published in September 2022 but it apparently wasn’t publicized so naturally we dug it up and summarized what it said too not surprisingly the first progress report contain contained some similarly concerning claims namely
That there would be limits on how much digital Euro you can hold that there would be control of your digital Euro transactions and that privacy would not be possible this didn’t go over well with informed audiences lo and behold the second progress report contained a pivot instead of the ECB handling
Everything it would only handle the issuance and settlement of the digital Euro in turn the private sector would do everything else such as handling customer data this was a total 180 compared to the working paper then in May this year the ECB published its third progress report naturally we
Summarized that too and if you saw that video you’ll know that by that point the ECB was having a PR crisis when it came to the digital Euro that’s because Christine had been caught on camera admitting that it would be used for financial control this is probably probably why the third progress report
Changed programmability to conditional payments now for context programmability is what makes it possible to set limits on what you can buy where you can buy it and when you can buy it using a digital Euro obviously programmability was very controversial so in a blatant attempt to
Try and avert another PR crisis the ECB effectively rebranded programmability to conditional payments the only difference being that the private sector will be the one that implements the digital Euro controls not the ECB funnily enough though this will be done using tools provided by the ECB anyway since May
There have been multiple digital Euro updates one of the most notable happened in August the politician who is behind the markets in crypto assets or M regulation was put in charge of the digital Euro team this is interesting given that M was surprisingly Pro crypto more on that later
Note too that we have the biggest trading fee discounts and up to $40,000 of bonuses on the best crypto exchanges and the biggest discounts on the best hardware wallets too these are for a limited time and exclusively for the viewers of this channel so be sure to
Check it out with the link at the top of the description moving on now the other notable update happened earlier this month and that’s that the ECB has entered the preparation phase for the launch of its digital Euro not surprisingly there was lots of push back about potential privacy and control
Issues including from other European Regulators oddly enough let’s just see how bad these issues are shall we as part of the announcement that the ECB had entered the preparation phase it published a report titled quote a stock take on the digital Euro summary report on the investigation phase and outlook
On the next phase we’ll leave a link to the report in the description if you’re interested by the way way so the report starts with a short summary which I’ll keep short since the same topics are discussed later I just want to highlight three things that stood out to us the
First is that the authors spend almost half of the summary trying to justify the need for a digital Euro spoiler alert it’s not needed as you might have guessed the summary says that the digital Euro will ensure privacy what the summary doesn’t say is that the definition of privacy in the context of
Cbdc means not sharing your data with private companies in other words if you share your data with the ECB it’s still private within their lengthy justification the authors also State the following quote a digital Euro would also address risks stemming from geopolitical tensions this ties into something we speculated about in our
Previous digital Euro update and that’s that Christine is scared about the Euro being replaced the authors don’t say anything to that effect here but They Don’t Really elaborate on this claim either regardless it makes sense the euro is inherently unstable due to it being used by 19 different countries
Each with their own economy and fiscal policies total control is the only way to keep things together something that the ECB has tacitly admitted in the past by the way the second thing that stood out to us in the summary was the ECB not so subtly passing the Hot Potato on to
European politicians they say that it will be up to the European commission to ensure that the digital Euro has the same properties as cash for reference the ECB keeps claiming that the digital euro is like cash spoiler alert it’s not on that note the third thing that stood
Out to us was the confirmation that European politicians are currently debating whether to approve the creation of a digital Euro the legislative process began back in June and it will probably take another year or so to play out in the interim the ECB will keep working now the next part of the report
Is an introduction which provides a summary of its eight sections as with the summary I’ll just note what stood out to us in this case it’s a note by the authors which says that the terminology in this report may be inconsistent with the terminology in the legislative proposal the authors note
That this terminology will be clarified at a later date put differently the definitions that are being used by the ECB in this report are different from the ones being used by Eur European politicians depending on how these definitions are finalized the digital Euro could either be more or less
Dystopian if you’re enjoying this video so far by the way be sure to smash that like button to help others see it in any case the first part of the report is about the digital Euro which the authors refer to as a quote evolution of money
If you watched our video about how the financial system is rigged you’ll know this claim is incorrect gold is money currency like the Euro be they digital or physical are not anyway technicalities aside the authors insist that the digital Euro will not replace physical cash or other forms of digital
Currency by now you’ll know this is questionable the ECB had expressed an explicit interest in phasing out all other forms of currency to make way for the digital Euro including monies like gold the authors also insist that the ECB quote would not have access to or store or any personal data that would
Directly identify end users now the key term here is directly identify it’s likely that the ECB would have the ability to indirectly identify end users be it with the help of commercial Banks or otherwise the authors then go on to admit that there would be limits on digital Euro Holdings if you’ve been
Keeping up with our digital Euro coverage you’ll know the max limit is currently set at €3,000 you’ll also also know that any Holdings above this amount will automatically be converted into regular Euros by your bank this is something the authors allude to when they say quote
However they would still be able to make purchases beyond that amount as their digital Euro wallet could be linked to their commercial bank account linking your bank account to a digital Euro what could possibly go wrong anyways the authors finish off this section by essentially confirming that the digital
Euro will have no privacy quote it would respect people’s privacy without infringing on public policy objectives such as combating moneya laundering logically meeting these objectives will require surveillance and control so it’s all an oxymoron now the second part of the report explains what the digital
Euro will be like for end users here we go the authors start by saying that the digital Euro will initially only be available to those living in Euro countries I.E countries that use the euro as their currency they reveal that the next step will be to expand the
Availability of the digital Euro to other European countries that don’t use the euro as their currency speaking of which you should know that all countries that are part of the European Union technically need to adopt the Euro at some point the presence of a digital Euro in non-o countries could be the
Eu’s way of doing what the ECB is scared will happen to the euro namely flooding these non-euro countries with digital Euros this could set the stage for the weakening and elimination of currencies like the Czech Crown and Polish zotty food for thought anyhow the authors go on to explain how users will be
Onboarded as expected users would have access to the digital Euro at their Banks as we explained in our previous coverage it would probably start off as just another tab in your account if eventually though it will be the only tab in your account regarding limits on your Holdings the authors confirm that
There will be limits for financial stability reasons of course they explain that the exact limit will be set closer to the launch date so that €3,000 figure we’ve seen may be different when the rubber hits the road what is already set in stone however is that businesses will
Not be allowed to hold any amount of digital Euros listen to this quote business users would have a zero holding limit meaning they would not be able to accumulate Holdings of digital Euro oddly enough the same applies to public authorities basically their digital Euro accounts would be a portal of sorts
Where Euros are instantly converted into digital euros and vice versa for whatever purpose be it payments or otherwise it’s not entirely clear why the ECB made this decision perhaps it’s because these entities will use their own cbdc systems for those unfamiliar there are technically two types of cbdcs
Retail cbdcs which will be used by plebs like you and me and wholesale cbdcs which will be used by select individuals and institutions it’s exactly what it sounds like one payment system for us and one payment system for them if you thought that was crazy though get this
The authors reveal that the digital Euro will have two modes online where in the ECB can presumably see everything and offline wherein the ECB promises a cash-like level of privacy these offline payments would be peer-to-peer think tapping your phone on another to make these offline payments possible the ECB
Notes that they will leverage quote secure elements within phones this reminds me of something we read in one of the ecb’s previous reports and that’s the possibility that specialized Hardware would be created and mandated for devices to support this news flash that would be terrifying every EU device
Would have a government created chip in it naturally offline digital Euros would have limits on Holdings and your offline digital Euros would need to be topped up when you’re online interestingly quote like cash in a lost or stolen wallet any digital Euro stored locally on a lost or
Stolen device would not be recoverable interesting indeed anywh who after explaining how linking your digital Euro account to your other accounts isn’t mandatory in theory but will be necessary in practice the authors confirm that you will only have one digital Euro account even if you have multiple accounts at multiple banks
Financial stability reasons of course then the authors drop a statistic that they’re probably ashamed to admit quote in 2022 cash was still the most frequently used payment method at the point of sale in the Euro area and was used in 59% of transactions note that it was over 70% in 2019 they’re really
Pushing for that cashless Society this relates to the third part of the report and that’s how to make digital Euro payments available via payment service providers such as Banks and non-banks naturally these entities will be tasked with doing everything like for instance collecting kyc the ECB will just be in
The background settling digital Euro transactions now a lot of the information here is pretty straightforward but there are a few things that stood out to us first every user will get a digital Euro account number or Dean for short aliases could be attached to each Dean setting the
Stage for a digital ID which the EU is also in the process of rolling out more about digital IDs in the description and this pertains to the second thing that stood out to us and that’s that it sounds like you won’t be able to delete your Dean once it’s been created if you
Close your account the only thing you’ll be able to do is transfer that Dean to another Commercial Bank account nothing to see there I’m sure and if that wasn’t concerning enough the authors seem to imply that depositing or withdrawing cash to and from your Dean using an ATM
May not be an option for withdrawals they just say that it can be quote assumed that you have this ability whereas for deposits they say quote further analysis is needed very reassuring now the third thing that stood out to us is that although businesses will have a digital Euro
Holding limit of zero the authors note that they will be allowed to hold digital Euros in their offline form they note that the limit on offline digital Euro Holdings for businesses will be set closer to the launch the fourth thing that stood out to us was the author’s
Mention of quote the digital Euro app this is presumably a reference to the eu’s aforementioned digital ID which will come with a built-in wallet the promo videos for the digital Euro also mention quote the digital Euro wallet case in point the authors mentioned the eu’s digital identity wallet just a few
Sentences later the authors then pivot to discussing their so-called digital Euro scheme which was revealed in one of the earlier reports s in short this requires all businesses to make it possible to pay their employees in digital Euros once again setting the stage for an economy that is totally
Controlled from the top down what’s funny is that the authors reveal that the ECB will maintain a database of all the Deans but insist that the data will be pseudonymized this is deceptive wording it doesn’t mean Anonymous consider that most cryptos are pseudonymous or almost every transaction
Can be tracked on a blockchain Explorer the authors also revealed that the ECB will offer payment service providers quote a dedicated digital Euro Central fraud detection and prevention function if you watched our video about fed now you’ll know it also contains a fraud detection and prevention function that
Once again results in currency control oddly enough the authors seem to suggest that the ECB will actually develop its own digital Euro app this seems hard to believe given that the eu’s digital ID wallet would serve the same purpose then again I suppose you shouldn’t underestimate the tendency for
Politicians to overspend public money what’s even more odd is that the ECB will make it possible to onboard non Euro currencies in the back end even though it doesn’t plan on offering this function at the outset it’s circumstantial evidence to support the idea that the EU hopes to absorb all non
Euro European currencies into the digital Euro the last thing the authors discuss in this part of the report is how a digital Euro would fit into the existing payments ecosystem they spend a lot of time talking about how the digital Euro would complement cash and focus on the
Fact that the offline digital Euro would be similar to cash to their credit this makes it possible for the ECB to argue that the digital euro is like cash when in reality that’s only true when it applies to offline payments this is probably why the community notes pin to
Christine’s expost about the digital Euro not being equal to cash was subsequently removed clever girl now in the fourth part of the report the authors discuss how the digital Euro’s use as a means of investment will be limited they tacitly admit that this is because allowing people to say have
Unlimited digital Euro Holdings would create the risk of a digital Bank Run can’t have that the authors also hint that there will be transactional limits on digital Euro Holdings in the name of fraud prevention they don’t say what these limits will be but they will presumably be in line with existing
Rules for physical Euros this means transactions of more than a few hundred could raise a red flag this feature makes the fifth part of the report sound a bit silly because it’s about financial inclusion nothing says financial inclusion like limiting how much money you can hold and
Raising a red flag to Regulators every time you make a modestly sized transaction as expected the authors spend the whole section trying to argue that a bunch of complex digital Financial applications with built-in Capital controls are the best way to address Financial inclusivity to their credit it will be possible to hold
Digital Euros in card form which is pretty cool the authors also reveal that each EU country will have a designated entity that will oversee assisting regular people with the digital Euro the authors suggest post offices by the way if you watched our video about the companies that printed all the money you’ll also
Know that they printed all the stamps too big think also we found a spelling mistake they added an extra G to the word within doesn’t Inspire confidence in the digital Euro to say the least there will be errors somewhere and it won’t be pretty something tells me that
These errors will be related to the sixth part of the report privacy and data protection the author’s pinky promise that the ECB will uphold privacy and data protection for digital Euro users with a bunch of footnotes but they’ll also be on the look out for fraud and tax evasion in other words no
Privacy and the authors even note that payment service providers may have the ability to share their private data with the ECB to our understanding this could actually be mandated due to the eu’s recently passed data act which we discussed in another video link in description now to be fair the ECB does
Leave the door open to allowing lower value transactions in digital Euros to be totally Anonymous even when online the authors say this is fundamentally up to EU politicians but even if they approve this there will be no way of knowing for sure that privacy is being protected as the saying in crypto goes
Don’t trust verify and if you can’t verify then don’t trust as it happens the seventh section is relevant in this regard it’s about the ecb’s collaboration with stakeholders if you’ve watched any of our videos about the world economic Forum you’ll know that this means the world’s most powerful individuals and institutions of
Course the ECB is working closely with them the authors revealed that the ECB conducted a quote prototype exercise with these stakeholders some time ago they made sure that the digital Euro will be easy to integrate into the existing system what’s hilarious is that the authors only provide a single
Sentence about Consulting with the general public and it wasn’t even the general public they worked with small businesses to do the Outreach for them then in the final part of the report the authors reveal what comes next for starters the ECB will continue to work alongside EU politicians as they discuss
The digital Euro legislation which you’ll recall was introduced back in June notably they request that EU politicians come to the ECB for any questions assuming the digital Euro legislation is passed and it probably will be then the ecb’s governing Council will make the final decision to issue a
Digital Euro or not and they probably will in the meantime the ecb’s work will enter the preparation phase which will last for 2 years from November for what it’s worth the ECB plans on reaching out to the public during this stage but I suppose it doesn’t guarantee they’ll
Listen whatever the case it looks like the digital euro is on track for a launch in late 2025 or early 2026 consistent with the timeline the ECB has set since the very beginning almost as if it was already decided this brings me to the big question and that’s how you
Can protect yourself from the digital Euro you’d be forgiven for thinking that this only applies if you live in a European country over 90% of central banks are planning on rolling out a cbdc of their own this financial dystopia is coming to your country too in other
Words so the first way to protect protect yourself from a cbdc like a digital euro is to try and ensure that related legislation isn’t passed or is at least watered down to the point that it gives power back to the people at this stage though that is going to be
Very difficult to do for the digital Euro but it could be doable recall that the new lead on the digital Euro team is the same chap who put together the Micah crypto regulation if you’ve watched any of our videos about Micah you’ll know that it appears that the crypto industry
Specifically stable coin issuers had a significant influence on the regulation logically then it’s possible that this chap is still being lobbied by the same entities it’s therefore possible that the digital Euro legislation could be struck down in lie of a Euro stable coin alternatively it’s possible that a Euro
Stable coin will be adopted to the point that a digital Euro just isn’t needed this is more plausible than you think because a Euro stable coin would be backed by European government debt this would allow European governments to subsidize their spending and allow the ECB to keep spreads between their debts
In check without stimulus a Euro stable coin makes the most sense anyway speculation aside the second way to protect yourself from a cbdc is not to adopt it this is going to be easier said than done if they start requiring cbdcs for payments for public services and
Things like taxes in that case you’ll either have to make an account or find someone who can act as your proxy assuming designating someone as your proxy is possible that might actually be the best way to go give someone you know or trust or pay the authority to make
All digital Euro transactions on your behalf that way you can just tell them what you need and give them other currency in exchange come to think of it it’s possible that there will be new industries that provide these sorts of proxy services after all not everyone
Will have the capacity to use cbdcs this will necessitate accessibility Services which means that it should be possible to delegate dealing with cbdcs to someone else now the third way to protect yourself from a cbdc is along the lines of the first and that’s to use Alternatives wherever you can not sure
Who needs to hear it but stable coins aren’t that far off from cbdcs both are centrally controlled and programmable the only difference is that stable coins are privately issued so when I say Alternatives I mean truly decentralized cryptocurrencies like BTC even then it’s important to remember that all BTC
Transactions can be tracked with a bit of luck the crypto industry will come up with privacy solutions that don’t result in regulatory crackdowns we are optimistic about this and if all else fails there’s always physical cash and gold the problem is that the former may not last for long and governments will
Likely try to seize the latter as we’ve seen in countries like Nigeria however if there’s enough Civil Disobedience and alternative networks the government will be powerless at the end of the day what gives money its power is its Network effect last I checked there’s more of us
Than there are of them that means that we can create payment networks that are larger and more powerful than cbdcs this is what they’re afraid of and they will work hard to prevent it but in the end the people will prevail we always do eventually and that’s all for today’s
Video if you found it informative let us know by hitting that like button if you want to stay informed subscribe to the channel and ping that notification Bell if you want to help inform others be sure to share this video with any friends and family who you think would
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