A European Perspective on Central Bank Digital Currency

Throughout 2019 I posted numerous articles on the subject of central bank digital currency (CBDC’s) and how simultaneous reforms of payment systems throughout the world are being undertaken in preparation for the full digitisation of money.

I have demonstrated through the words of central bankers themselves how the goal of introducing digital currency is an integral part of their plans over the next decade. It is on record that global planners want to ‘reset‘ the current financial system and replace it with a new set up underpinned by intangible assets. Global elites refer to this as either the rise of the Fourth Industrial Revolution or a ‘new world order‘ of finance. What is a carefully preordained agenda has been fashioned to appear as nothing more than the innocent evolution of technology. It is a deception that can be challenged using the communications issued by central banks.

Rather than rely on supposition, let’s allow those within the central banking community to speak for themselves.

In November 2019 Johannes Beermann, a member of the German Bundesbank responsible for cash management, gave a speech in China called ‘Cash and digital currencies from a central bank’s perspective.’ Beermann confirmed that cash circulation in Germany is on the rise, with the Bundesbank having issued over half the total value of euro banknotes now in circulation. ‘There may be less cash around‘, said Beermann, ‘but we are far from being cashless.’

Beermann went on to say that new methods of payments ‘tend to evolve in stages‘, and that ‘the transition towards a society with less cash has to be driven by the user and not the supplier.’ But even though a large proportion of German citizens are still demanding banknotes, it has not prevented the Bundesbank from openly discussing the possibility of a central bank digital currency superseding cash in the future.

Publicly, the Bundesbank remain at the stage of viewing blockchain and distributed ledger technology as ‘promising‘, with ‘central banks open to them in principle.’ The ‘transformation‘ of the payment landscape, therefore, remains in flux and ‘anything but complete.’

As mentioned by Beermann, what has propelled the issue of central bank digital currency to the forefront of debate is the prospect of Libra, a new global payment system proposed by Facebook which would be built upon blockchain technology. It has prompted discussions on the need for a ‘pan-European digital payment solution‘. Prior to the announcement of Libra and subsequent criticism by central bank officials, digital currency was largely a niche concept within the mainstream. Only now has it begun to take a more prominent role, and given central banks the platform to shape the narrative on the future of money.

Near term, however, public issuance of central bank digital currency is not on the horizon. ‘We should go one step at a time‘, cautioned Beermann, who believes that cash will ‘continue to enjoy great popularity in the euro area.’

Following on from Beermann was Benoit Coeure, who later this month will step down as a member of the executive board of the European Central Bank to head up the Bank for International Settlement’s Innovation BIS 2025 initiative. In discussing ‘a European strategy‘ for ‘the retail payments of tomorrow‘, Coeure brought up the subject of CBDC’s and payment systems. As with Beermann, he stressed the need for a ‘pan-European market-led solution‘, one that transcends national boundaries and becomes the accepted standard throughout the entire European continent. But as we have come to expect from global planners, ambitions on this scale are advanced gradually. Which is probably why Coeure remarked that ‘global acceptance should be a long-term goal.’

The ECB, according to Coeure, will ‘continue to monitor how new technologies change payment behaviour in the euro area‘. This is predominately in response to a decline in the demand for physical money. The key takeaway from Coeure’s speech was in declaring that the implementation of central bank digital currency would ensure that ‘citizens remain able to use central bank money even if cash is eventually no longer used.’

This is why the notion of central banks being opposed to digital currency and seeing it as a threat to their supremacy is nonsense. With cash comes anonymity, and with that an inability to track and trace the economic behaviour of individuals. It was Mark Carney who back in 2018 declared data to be ‘the new oil‘. What central banks want is for every citizen to become entirely dependent on an all digitised system that the banking elites control. For instance, the growth of contactless payment technology is just one element which has greatly assisted them in this endeavour.

Another voice that is prominent on the subject of digital currency is Francois Villeroy de Galhau, governor of the Bank of France. Speaking in December last year (Central bank digital currency and innovative payments), de Galhau talked about the emergence of ‘new players‘ in the field of payments and how they have taken the initiative to transform the payment industry. De Galhau sees this as a challenge for banks, and potentially even a ‘threat to European sovereignty‘ if these players are based outside of Europe (most notably China).

As you might expect, de Galhau proposed a two fold response to this ‘threat‘. First, central banks should increase the speed on new payment solutions, and second they should consider the viability of introducing central bank digital currency.

In de Galhau’s own words:

We first have to take advantage of the opportunities offered by the digital revolution to develop a genuine pan European payment solution.

We as central banks must and want to take up this call for innovation at a time when private initiatives – especially payments between financial players – and technologies are accelerating, and public and political demand is increasing.

This stance is exactly in line with those of Johannes Beermann and Benoit Coeure, and reinforces the coordinated nature of central bank communications. The innovations of private developers are not so much a threat as more an opportunity to position central banks as the lynch pin of a future all digital system. It is why the likes of the Fed and the Bank of England are engaged in reforming their payment systems. The plan seems to be that the private sector spearheads the technological side, whilst the central banks act as the gatekeepers on aspects such as coverage and regulation. It is they who will ultimately determine who gains access to the next generation of payment systems and who does not, through a swathe of new regulatory requirements.

2020 is the year when the encroachment towards CBDC’s will kick up a notch. In France, de Galhau wants to begin experimenting with the technology over the next few months. It will amount to a test bed for the Euro system as a whole, and for de Galhau will ‘make looking into the possibility of an ‘e-euro’ one of its next focuses.’ The Bank of France will also take part in the BIS Innovation Hub, which will be led by Benoit Coeure. As shown in previous articles, the BIS are at the forefront of the central bank digital currency agenda.

But where will banks start with their experimentation? CBDC’s can be classified on two levels – wholesale and retail. Wholesale refers to payments made exclusively between financial sector firms, whereas the retail variant would be for general consumption at the public level. De Galhau believes that there would be ‘some advantage in moving rapidly to issue at least a wholesale CBDC.’ This would benefit central banks given that a limited release would enable them to iron out deficiencies before moving towards a full scale release that in the end would be at the expense of banknotes.

Finishing out 2019 was a speech by Mark Carney at a farewell dinner in honour of Benoit Coeure. Here, Carney explained the necessity behind central banks and private innovators working together to build a new financial system. The goal is to ‘provide the
best-in-class payment infrastructure that can enable private innovators to deliver the payment products and services our citizens need.’ Infrastructure that is of course controlled by the central banking system. From the Bank of England’s perspective, they plan to ‘allow new entrants access to the same resources as incumbents, while holding similar risks to similar standards.’
Central banks are making every attempt to convince those interested that innovations in the field of payments will result in broader competition and the growth of a decentralised network of operators. If the extent to which global industry is scrupulously monopolised by a handful of corporations is anything to go by, I highly doubt a CBDC future will be decentralised. An indication of this is in how developers and central bank officials have spoken of endorsing ‘permissioned‘ blockchain systems over ‘unpermissioned‘. The developers behind Libra want to use a permissioned network, meaning access is restricted to participants. On the opposite side today you have Bitcoin which uses unpermissioned blockchain. This is one of the reasons why central banks have cited Bitcoin as both an unstable asset and a risk to financial stability. But whilst they may speak out against Bitcoin, what they have not done is ostracise the technology behind it.
So far in 2020 we have heard from Bundesbank President Jens Weidmann and ECB governor Christine Lagarde on the prospect of digital currency. In light of Facebook’s Libra, Weidmann was asked in an interview whether the ECB should counter it with it’s own digital currency. ‘I don’t believe in always calling for the state right away,’ said Weidmann.
Whilst central banks continue to quietly advance their digital currency objectives, a narrative playing out within the financial media is that private innovations such as Libra represent a threat to the financial system due to a lack of regulatory oversight. This has created a sense of distrust with private led innovations. Important to recognise is how CBDC’s are a medium to long term goal. When banks are ready to launch digital currency, they will want it to be in an environment where people are increasingly looking to global institutions to provide stability in an increasingly unstable financial system.
As with fellow central bank officials, Weidmann pledged that central banks ‘will provide cash as long as citizens want it to.’ My concern is that as digital payment options become ever more convenient and cash usage falls, citizens will overlook the obvious dangers of entrusting their life assets to a digital only construct.
In a separate interview, Christine Lagarde was quizzed on whether creating a cryptocurrency was ‘a legitimate task for the ECB‘.

Innovation in the area of payments is racing ahead in response to the urgent demand for quicker and cheaper payments, especially cross-border ones. The Eurosystem in general and the ECB in particular want to play an active role in this field, rather than just acting as observers of a changing world.

I think we can safely take that as a yes.

When you combine all the comments raised there is one overarching message. Central banks are more than prepared for the digital revolution, primarily because they are the leading architects behind its inception.


  1. There is something about the psychology or social aspect that really bugs me, but for now I cannot pin it properly. It goes beyond the physical exchange of one thing for another, say a note or coin for an item purchased, which itself is a form of obvious recognition between people of the meaning of exchange. Similar would be when someone gifts money as opposed to crediting an account. However both those examples do lead to a perception of sorts as to direction. For now use of digital payment is usually voluntary, it is often useful and especially with distance transaction, but it is not obliged. So a person is saying to another in practice, “I’ll pay with my card, if you don’t mind”, and the reply is usually “certainly” . Usually a person is thinking “I can pay in cash if need be” as well.

    Once that is gone, where are we ? “You have to accept digital payment” and “you have to pay digitally “. That is to say every transaction only occurs at some non-present third point of registry that communicates authorisation, every single time.

    I’m thinking on my feet here….

    The significance of this is that we are recognising outside control on every one of our spending actions, that without accepting that control we basically cannot take part in the economy, in day to day transactions.

    I think we will find the non-present third party is actually ever present and domineering, because we will know that without its authority we are “nothing”, because there is no private friendly personal transaction allowed without its oversight, and so no private friendly personal transaction will take place in settlement of the purchase, it will be registered by people we don’t know, even if we would choose not to trust them.


    Spain just introduced “something of a monstrosity of a government” , with four vice/deputy presidents some call it “the endless government”. This time I am not going to write about it, but not for lack of intrigue and argument, but instead single out one figure.

    Nadia Calviño has been part of the PSOE caretaker government since mid 2018 (where it was sworn in only after winning a vote of no-confidence against the pre-existing PP government which was used to assume to grant it authority, but its subsequent attempts at government and proper election failing until the fragile coalition now formed) but only now has a fuller authority as deputy/economy. This is a weak, strongly pro-EU government now. Her background pedia under “other activities” has her tied into various banks and funds, including IMF. She has a long list of EU commission titles and employ. I think she would be pivotal in further integrating EU finance and payment schemes in Spain.


    • “The significance of this is that we are recognising outside control on every one of our spending actions…” Quite so, Re, and it is foretold:

      Among the goyim, animals and even slaves were branded with a mark as an indication of ownership. In the case of humans, such property marks were placed on a conspicuous part of the body, such as the forehead.

      Rev 13:16-17
      16 – It puts under compulsion all people—the small and the great, the rich and the poor, the free and the slaves—that these should be marked on their right hand or on their forehead
      17 – and that nobody can buy or sell except a person having the mark, the name of the wild beast or the number of its name.


      • A lot of my research relates to identification and social formatting by the state. This goes back a long long way, to the earliest declarations on constituency , through to the introduction of forms of formal registry, and why or how they occured. Mixed into this are religious concepts, social management , even simply the recognition wanted by authority of being understood as authority. This became quite synchronised with central banking and legal tender law, where arbitration of civil and commercial matters were reckoned in a monopolised monetary system , which in turn more recently “had to” transpose itself to fiat to become manageable, which is our modern MMT, big government, low rate high credit environment. Debtors need to be identified to enforce contract, and as fiat is future debt in theory owed by everyone via taxation, even though we are “in credit” by holding it, we are also subject to its future payment and so are viewed as debtors. So in a round about way “it’s all for our own good, and the good of the whole” and we should therefore not complain as the method is “refined” to make it “more efficient or fairer” .

        Somewhere in all of that we lose our freedom of choice though, if not our freedom altogether, and maybe in future the freedoms we enjoy now (that are left) will be unknown, replaced by other design.

        It is a dreadful thought, as we should always be in a position to reject a proposition without it having an unnecessary direct negative cost on ourselves. If we cannot turn away, we are not free, exclusion from society was once considered one of the harshest punishments possible, in this case “for what?” . The complexity of modern commitments that somehow we find woven into our lives are subtle but endless, or as has been said to me with a wry irony by those older and certainly wiser, “it makes you wonder how we ever used to manage”.

        Interestingly the word freedom has its root in the word “family”, whereas liberty originates from the definition of an absence of restraint. The two have become synonymous but there is a subtle difference, and of how the overlap works.


        is one place to start that gives something of an overview on identification. I am a third through it and it touches on various themes, but it seems to try to include various perspectives. The closing phrase it offers

        ” Or will the system of registration and control be merely privatized, and such functions supplied by credit reference agencies? Are these the forces that are driving the current effacement of the dis-tinctions between juridical persons, citizen, aliens and deviants, in the realm of identification that have subsisted for centuries? The price of freedom maybe eternal vigilance but what if vigilance involves a level of identification and surveillance that itself curtails freedom? But such questions lie in the realm of choice, not of necessity. ”

        is very pertinent, because there is definitely a blur between choice and necessity in today’s world.

        Here is another interesting read


        which gives some explanation behind civil registration changes.

        As we are at a monetary site here, and though there are other interesting tangents such as nationality law and imperial practice, and because the newer obligation of identification policy will likely be via commercial and financial registration given the overall rejection in UK to other identity initiatives (except video surveillance, but does that count as getting one’s face on the goggle box ? ) , we have to go back to the early nineteenth century creation of legal tender and central banking to understand how this has been channelled. The reasons given for those moves also are worth study, it is where I am at now in my research, but “disorganisation, oversupply of credit, lack of coinage” etc. are given, which basically speaks of credit events that are used as reason to create government control, oversight and wider management. This did not reach its current level of imposition until the world wars.

        Well, I start writing 🙂 … and leave even more to read… but there is a lot to study, and have barely touched on the religious side properly, that is fascinating as well as being a minefield when it comes to discussion, as you would know.

        Best regards.


  2. The REAL unanswered question is: how long a central bank can play the role of the rogue sovereign distributing seigniorage to a small clique of oligarchs ?


  3. It is my personal opinion that maintaining the digital currency by the central bank is almost impossible due to the nature of this virtual currency. Blockchain technology exists there where only giver and receiver know what they are dealing with and no need the middleman assistance.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.