How to Relate Monetary Reform to CBDC?
Dutch monetary reformer, Edgar Wortmann, got his kick-start at American Monetary Institute's Chicago 2013 conference. Steven Zarlenga, Michael Kumhof and Steve Keen provided him with essential information to co-create the monetary reform movement in The Netherlands. This movement, Ons Geld (Our Money), was inspired by digitization of money. It considers digitization essential to providing sound money, outside the credit system. But digital money, such as Central Bank Digital Currency (CBDC) or a digital euro, can do harm too.
In 2017 Ons Geld raised the issue of a digital euro in a letter to the European Commission. In this letter Ons Geld exposed the relationship between the bank's balance sheets and the nation's currency and how it makes our money prone to runs and risks. Ons Geld suggested that digital technology can help to address this and stated, "The key is adoption of a virtual euro that does not represent a claim on the issuing entity."
The European Commission replied and showed it understood Ons Geld's proposal; however, it was concluded that it was not considering the creation of a digital euro as a measure to enhance the stability of the financial and monetary system. Some years later the European Central Bank (ECB) entered the discussion, and claimed it already provides safe money. The ECB made clear the risky nature of the bank money system is not on the table, as the main purpose for 'CBDC'. Moreover, the ECB has one design requirement which positions it directly against Ons Geld: the digital euro is a central bank liability.
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