by Martin Armstrong, Armstrong Economics:
The European Central Bank is moving ahead with the digital euro and expects to begin a 12-month pilot during the second half of 2027. Thirty-six banks and payment providers have already been selected to participate, legislation is expected to be completed by the end of 2026, and the ECB intends to be ready for a potential first issuance during 2029. Brussels is spending approximately €1.3 billion to prepare the system, with projected operating costs of €320 million annually beginning in 2029, while pretending the final decision has not already been politically engineered.
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The ECB insists the digital euro will never be “programmable money,” but in the same breath admits that it will facilitate “conditional payments.” This is the word game they always play. Programmable money is defined narrowly as currency restricted by where, when, or with whom it may be spent. Conditional payments, meanwhile, occur automatically only after predefined conditions have been satisfied. Brussels claims these are completely different concepts because the condition is attached to the payment service rather than the currency itself. To the person whose transaction is blocked until the system approves it, that distinction is meaningless.
The first examples sound harmless. A customer orders a product online, the money is reserved, and payment is released after delivery. Funds could be transferred according to milestones, pay-per-use arrangements, or other automated terms. That may offer convenience and reduce fraud, but the infrastructure does not possess morality. A system capable of withholding a payment until a commercial condition is satisfied can also withhold it until a regulatory, tax, identity, geographic, or political condition is satisfied. The technology only executes the rules written by those who control it.
The ECB also says the digital euro will complement rather than replace cash, just as every government program begins as voluntary before the alternatives are slowly made inconvenient, expensive, or unacceptable. Merchants that accept digital payments could be required to accept the digital euro, and banks could be required to distribute it to their customers. This is not a product attempting to win public support through competition. Brussels intends to manufacture adoption through regulation while calling it consumer choice.
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