Draft digital euro legislation supports permissionless blockchains
The most recent draft of the digital euro legislation being discussed by the European parliamentary Committee on Economic and Monetary Affairs includes support for permissionless blockchains. “Conditional payments in Digital Euros may also be carried out on permissionless distributed ledgers where until now only privately issued assets like crypto-assets or stable coins are available as a means of payment. With the approval and under conditions set by the European Central Bank (ECB), the Digital Euro would be made available as a token to be referenced on these chains.” The ECB and European Council previously stated they don’t want programmable money at the base layer, so the legislation now specifies conditional payments will happen in the “layer above”. [Read more at Ledger Insights]
Digital euro: The case against it being legal tender
SUERF published an article by Christian Pfister that the notion of legal tender is a “barbarous relic” that is unfit in a digital environment where there is a wide choice of payment instruments. Furthermore, making the digital euro legal tender could even undo some the expected benefits of its launch and entail risks. That is not to say that making a retail central bank digital currency (CBDC) legal tender may be more justified in a context where the wide majority of payments are made in cash and the public authorities wish to encourage the modernization of payments, i.e. in some developing and emerging economies. [Read more at SUERF]
In any case, by the typical definition of legal tender (payment in it cannot be refused by the payee) it is an irrelevant distinction, since in many jurisdictions there are so many exceptions, or there is little to no enforcement (e.g., in China and Sweden).
FYI here are some of my upcoming speaking engagements:
– Digital Euro Conference 2024 (Frankfurt on February 29)[Register here and get a 20% discount with the Kiffmeister20 code]
*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.
Kiffmeister’s central bank digital currency monthly monitor
Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com
The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).
Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]
WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]
