You'd have an account at the ECB that you can keep your digital euros in and exchange to and for liquid euros. You'd get the ECB interest rate.
Then if banks want to convince you to hold your eurocoin on their wallet / exchange / stake it, they'd have to offer better features and better interest than the ECB.
Sadly banks are in full swing trying to torpedo the proposal with lobbying, to the point where there's a lot of noise about the ECB only being allowed to be a facilitator and not allowed to be actual competition to the bank, and instead it's banks that should get the sole right to hold digital euro accounts.
> But we enjoy pretty advanced banking services and arguably the most flourishing fintech ecosystem by worldwide standards
Interestingly enough the US does have very modern financial institutions: credit unions. An American woman I met in Vietnam and traveled together with for a bit had a Charles Schwab account that had more features, more free overseas withdrawals and a nicer mobile app than my Dutch bank. It was almost on par with Revolut / N26 / Bunq.
Charles Schwab is the 12th largest bank in the US by assets.
I do agree that credit unions can be great, however, the experience between them is wildly inconsistent. Some have apps that barely work, and some have decent apps that are a bit dated and clunky. The big banks generally have the best UX/support/etc.
It's weird to call it a "digital euro" because the euro is already digitized by traditional banks! At an existing traditional bank, your balance is already a discrete number. Money can be sent and received electronically on communications networks without using physical media like coins and bills and cheques.
1) Is that automatically good? Damn those capitalists and their slow and steady approach to major changes, I suppose. Wouldn't want to proceed too thoughtfully.
2) The free market in banking looks pretty much exactly like the crypto ecosystem. As people often put it, speedrunning banking history. The only thing slowing the financial institutions down is the regulation (which is pretty much the pro-regulation argument of "if we don't regulate it they'll do a bunch of stupid things too quickly").
There isn't something of a free market in banking but the limitations are extreme enough that it is more of a heavily mixed to centralised one. Interest rates are managed by a central committee and banks provide any colour of service you like as long as it is black. Typically heavy KYC regulations to link the system to law enforcement and state intelligence systems. There is enough freedom to keep the fees fair and a bit of flexibility in what the money gets invested in which is pretty good. But for transaction speed I'd actually be a little surprised if the banks were allowed to control their own settlement timelines; I assume going to quickly would start running in to KYC-style compliance problems.
Considering how long it’s taken even the most progressive regulations to be enacted, it’s arguable that we’ve done anything but proceed without thoughtfulness towards how these changes affect the other 99% of the population.
We sure do spend a lot of time letting the wealthiest folks skim those points off the top without spending any more than they are required to by regulations, though.
However, there's FedNow immediate transfers, Zelle (consortium of banks) immediate transfers, same day ach (several batches daily), same day fed wire transfers within banking hours, and that's just the faster options.
Decentralized systemd are slow to act and slow to change, which is why all of the faster banking initiatives tend to involve a centralized element.