European banks want to torpedo the digital euro (opens in new tab)

“Non-bank payment providers, such as Stripe, Paypal or Wise, would really like for that to happen.

‘A level playing field cannot exist today because payment institutions and e-money institutions cannot access payment systems on an equal footing with banks,’ said American payment provider Stripe in a paper submitted to the Commission.”

In Germany ATMs had no fees and were plentiful. I didn’t have enough cash to pay at a crepes place in Aachen, and the owner directed me to a bank down the street (and told me to sit down and enjoy my meal before running to the ATM).

EU banks already allow you to electronically pay people and do free transfers.

Back in the U.S. what does PayPal offer? Freezing people’s accounts with no recourse. Avoiding bank regulatory laws which exist for a reason. And charging high fees, currently 4.5%, for purchases regardless of if funded by a bank account or credit card.

This kind of “unregulated” banking will also attract fraud and seedy uses like money laundering, and then complex KYC will have to be set up to do that.

If PayPal or Stripe want to compete: go start a bank or buy an existing one.

The title is clickbait. They don't want to torpedo it, they just want to make sure that it won't cost them money. You can agree with that or not, but surprising it is not.

There is something to say for that, because banks have to comply will all kinds of government regulations that cost them money. E.g. they have to check their customers for suspicions of money laundering, they have to have some financial buffer to make sure they can deal with financial market shocks.

If you allow competition that takes part of the market share for payment traffic but doesn't have to deal with those regulations, it's not a fair competition.

There is already a limit on cash payments in the EU:

- €7,000 (US$7,645) max limit across the whole EU (€1,000 for crypto), down from €10,000 just 2 years ago (2 years of high inflation).

- Just €1,000 (US$1,081) limit in France and Italy.

They always blame AML/CFT but it's really just forcing payments into banks and credit card companies that can skim 1-3% of everything.

https://www.europarl.europa.eu/news/en/press-room/20230327IP...

Imho a „digital euro“ (ie retail CDBC) will remain an utopia: Knowing who transfers money on the ledger of the central bank is very important for the central bank to remain credible. KYC is the banks job in this, so the bank takes the hit in fraud cases, never the central bank. If central banks loose their face, their currency/country takes the hit.

Turkeys will never vote for Thanksgiving/Christmas.

They will always try to engineer perpetual feeding.

But it should not be up to the turkeys to decide.

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