The European Central Bank (ECB) announced on Oct. 2 that it is conducting studies and technology experiments in preparation by deciding, by mid-2021, whether to launch an ECB digital euro (ironically abbreviated DE, and the ECB patented this term ten days earlier at the European Union Intellectual Property Office). The announcement and review of “benefits and challenges” being discussed and debated uses safe phrases, such as that the DE “could support the Eurosystem’s objectives by providing citizens with a safe form of money in the fast-changing digital world.” An ECB Tweet said: “As technological changes are transforming how we pay, a digital euro could offer a universally accepted, risk-free and trusted means of payment to complement cash. We’ve analysed its possible benefits and challenges in our report https://ecb.europa.eu/euro/html/digitaleuro.en.html A digital euro would complement cash, not replace it: together they would offer people a greater choice and easier access to ways of paying. This should help financial inclusion and promote innovation in the field of retail payments. It is too early to identify any specific type of digital euro, but we have laid down some basic requirements, such as robustness, safety, efficiency, privacy and compliance with the law. We will now listen and experiment to define what it might look like in the future.”
The first part of the three-part tweet included a picture of ECB President Christine Lagarde, quoting her from the report as saying: “The euro belongs to Europeans and we are its guardian. We should be prepared to issue a digital euro, should the need arise.”
In the ECB’s patent application for the DE, one paragraph listing the functions and applications the DE is to carry out, shows clearly that these are not the functions of citizens’ or productive businesses’ use of cash, checks or credit cards; but rather that the ECB would use the DE to perform the functions of major private banks. It lists: “Financial affairs; monetary affairs; banking services; credit card and debit card services; verification, analysis and evaluation of payment transaction data (financial services); financial information concerning foreign exchange transactions; financial information concerning currencies; issuance and redemption of tokens; foreign exchange trading operations; foreign exchange trading; money transfer services; processing of electronic payments; management of real estate assets of electronic tokens (e-wallet); financial services provided by electronic means; cryptocurrency services, namely, a digital currency or digital token, incorporating cryptographic protocols, used to operate and build applications and block chains on a decentralized computer platform and as a method of payment for goods and services.”
In August 2019 Bank of England Governor Mark Carney, since made UN Special Envoy on Climate Action and Finance for the global green new deal, launched the proposal for a global digital currency run by the central banks to replace the dollar. Carney gave the reason: For a decade, the central banks had tried to inflate the dollar by printing fiat money, and failed; therefore, it should be replaced in reserve currency functions by a global digital currency which central banks could inflate or deflate as they wished, by creating or destroying block-chain currency.
