Digital Euro – Progress or Tool for Control?

In our latest episode of the 21bitcoin podcast, we talked to Harald Betz, author of the bitcoin thriller "Mieses Geld". We explored his bitcoin journey and dove into the fascinating yet polarizing topic of the digital euro and central bank digital currencies (CBDCs). Harald offered a deep dive into the development of the digital euro and its potential impact on society and the financial system.

Goals and Functions of the Digital Euro

The digital euro is intended to complement cash by providing a secure and efficient means for digital payments. However, the motivation for a state-controlled digital currency goes beyond convenience. The European Central Bank (ECB) argues that a digital euro is essential to reduce reliance on private payment providers and help curb consumer debt.

Why Many View the Digital Euro with Skepticism

Many bitcoin enthusiasts, including Harald, are concerned that the digital euro could become a tool for control. The centralization of the payment infrastructure may increase the risk of state intervention in financial markets and personal privacy. Harald pointed out that the ECB could potentially censor certain types of transactions.

For instance, central banks could restrict the use of the digital euro to purchase cryptocurrencies, making it difficult for users to send funds to crypto exchanges. Thus, the digital euro’s development might also be a strategic move to sideline bitcoin while strengthening confidence in state-controlled digital currencies.

An Alternative: European Payment Initiative (EPI)

While the ECB is developing the digital euro, European banks are working on a parallel solution: the European Payment Initiative (EPI). This project aims to establish a privately-operated payment system within the eurozone, reducing dependency on American providers like Visa and Mastercard. This private alternative could limit the digital euro's influence on the market, ensuring some level of competition.

Conclusion: Bitcoin as an Alternative

Many bitcoin advocates see the digital euro as a potential restriction on individual freedom and financial autonomy. Bitcoin may remain an important alternative, offering a decentralized and censorship-resistant payment system. The evolution of CBDCs and bitcoin's competition could reshape the financial landscape, giving citizens new choices and more control over their finances.

Here you can listen to the podcast episode.