1.2. The Digital Euro – “CBDC” and Online Payments

A new money is entering the world: central bank digital currencies, known in technical jargon short as CBDCs. The probability that we will have and use such money in a few years is quite high: in the Eurosystem this would be the so-called digital Euro. But what such CBDCs are for, is often unclear.

We rarely think about what happens underneath when we hold our devices or cards up to the payment device or click on this or that payment option on the Internet. But in order to get an idea of the potential of a CBDC, it is worth taking a look behind the scenes..

In this episode, eFin & Democracy takes a closer look at digital payments and gets to the bottom of the argument that a digital euro secures European sovereignty and independence. The historical background of today’s monetary system, the first steps of digital payments in the post-war period and how Europe differs from the United States when it comes to digital payments are addressed by Frankfurt-based economic sociologist Barbara Brandl. The fact that the prominent payment service providers and main drivers of digital innovation are seated in the United States has recently raised skepticism. At the same time, new global players are entering the scene. China is also working on setting up its currency as an attractive digital payment infrastructure. In this context, the “digital euro” project is particularly important, explains Carola Westermeier, who researches financial infrastructures, geopolitics and security from the perspective of political economy.

The Digitalgelddickicht discusses which needs Europe might specifically have with regard to payments. Since we use a global payment network on a daily basis, with 1. no significant major European player around and 2. with only private providers to choose amongst: Is there a need for a European infrastructure or a public alternative?