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Comment by dinkblam | Hacker News Reader

for all intents and purposes the Euro is already digital. you send money to persons and companies via instant wire transfer, you pay digitally when shopping online and you pay digitally in physical stores with your card or NFC phone.

what possible benefit over what already exists and is in wide use could a "digital euro" offered by the ECB provide to any EU citizen?

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I think it would help create fintech local alternatives to Visa and Mastercard, if it gets feature parity. It could be cool and, to be honest, this market could use a bit of a shakeup.

Here in Argentina we have as altetnatives the debit card (mostly a Visa variant), and QR from MercadoPago (MercadoLibre) and Modo (¿a alliance of the banks?) and a few minor ones. Even the guy that sells dobious products in the subway or sing or just ask for money my have a QR or a text alternative (like house.banana.dog). It's not necesary to create digital pesos, they are already digital.

We have that too, but it basically moves money around, like a debit card. A few key features from credit cards are missing, like reserving an amount for a car rental. That would be the most relevant thing to get right.

Both Visa and Mastercard work just fine with the regular old school euro, why would you need something entirely new to create a local competitor to an already existing service?

Why might someone be interested in replacing two monopolistic entities headquartered in a foreign and increasingly irrational power both of which have long histories (and recent controversies) in applying their own moralistic framework to economic activity?

That's a great question!

You don't need to make any changes to your currency to create an alternative to Visa and Mastercard, all you need is political will. Russia created its own system years ago and forced both Visa and Mastercard to comply with it, it's the reason that card payments continue to work as expected inside the country. You can even still use your old physical visa or mastercard cards inside Russia, even though the companies themselves left in 2022.

I'm not a finance wonk so I don't know for sure, but given how absolutely everything else in the EU works I'm fairly confident that every country has their own sovereign financial system for handling currency and then cross-border transfers are facilitated via hacks.

It would therefore follow that any international financial system would be very complicated and expensive to set up, and would be helped enormously by a burn-it-to-the-ground-and-start-again replacement system.

(...if that system was well designed, and given how everything in the EU works...)

Visa and Mastercard are subjected to political pressures to disincentivise conducting transactions. If the market would be more diverse, these pressures would be way less effective.

If a digital € would change that is questionable though. Perhaps ambitions would get even worse.

Also a very good argument for cash. I like untracable transactions. I isn't just to benefit crime, it is also about privacy.

I haven't looked into it much, but I assume the point is that it avoids the SWIFT system.

every euro account ultimately ends up on the ECB's balance sheet, so why keep middlemen?

So there is a middleman that can be blamed or used as a fall guy or whatnot. Also, non governments can arbitrarily deny services without recourse for customers, whereas governments in developed countries have to provide justification.

If they give money as some sort of relief they could specify what it can be used on: groceries, education etc

US already does that just fine with EBT.

I think most discussion of “digital dollars” is just jingling your keys in one hand while taking away physical currency with the other — as the final step in their long war on using cash.

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