Why the Digital Euro is a threat to your financial Freedom
The European Central Bank (ECB) is pushing forward with the idea of a Central Bank Digital Currency (CBDC), commonly referred to as the "digital euro." At first glance, this might seem like a logical step in our increasingly digital world. After all, we’ve already gone cashless in many respects, with online banking, contactless payments, and mobile apps making the handling of physical money seem outdated. But the introduction of a digital euro is not just a technological upgrade. It brings with it a host of dangers that threaten to undermine the very essence of financial freedom.
Programmability: The Digital Euro’s Trojan Horse
A core feature of the digital euro, as proposed by the ECB, is its programmability. By definition, this means that the currency could come with built-in restrictions or rules, dictated by the authorities. In theory, it might seem harmless—imagine a government program that sends digital euros to citizens with conditions on how they are spent, such as only allowing them to be used for basic necessities.
But let’s face the harsh reality. Programmability is a slippery slope. Once a government or central bank can dictate how money is spent, they hold unprecedented control over citizens' financial autonomy. What happens if these restrictions are expanded? Will you be barred from using your digital euros for things that don’t align with government policies? Could your money be programmed to expire, forcing you to spend it within a certain time frame or lose it entirely? These aren’t far-fetched questions, because it’s exactly the kind of control that a programmable currency makes possible.
Limits and Expiry: The End of Economic Freedom
Cash is versatile. You can save it, store it, and spend it as you see fit. But the digital euro would come with limits—both on how much you can hold and possibly on how long you can hold it. The ECB has hinted that individual holdings of the digital euro could be capped to prevent “excessive” use. Essentially, this would mean that the state could decide how much money is “too much” for an individual to possess.
What’s more, with the programmability feature, which the ECB marketeers systematically deny or even shrug of as "no issue", the ECB or other governing bodies could impose expiry dates on your digital euros. Imagine being unable to save your money for the long term, as your digital balance shrinks or vanishes after a specific period. This is the opposite of financial security. It's financial control.
A Currency Tied to Your Identity
Unlike physical cash, which provides a certain degree of anonymity, a digital euro will be linked to your ID through the metadata embedded in every transaction. Authorities will have complete visibility of how, where, and when you spend your money. While this might be sold as a tool for combating fraud or tax evasion, it also opens the door to surveillance and control.
The idea that the government could have unfettered access to your financial activity is deeply unsettling. Every transaction could be monitored and analyzed, creating a financial surveillance state where the authorities wield immense power over your economic life. The concept of financial privacy would become a thing of the past.
An Endless Supply: Inflation’s Silent Thief
Another fundamental problem with the digital euro is that it will have no fixed supply. The ECB could create as much of it as they see fit, which is the very definition of inflationary monetary policy. In the long term, this endless creation of digital euros will erode the purchasing power of the currency, robbing savers of their wealth.
Unlike Bitcoin, which has a fixed supply of 21 million coins, the digital euro would be subject to the whims of central bankers. Whenever they decide to print more, the value of the currency in your digital wallet will decrease. This inflationary risk is another way that citizens would lose out in the long run.
A True Digital Equivalent for Cash? Put It in the Constitution
If the ECB genuinely wants to convince the public that the digital euro can be trusted as a real digital equivalent for cash, they must do more than offer assurances. They should enshrine its fundamental characteristics in the European Constitution, ensuring that no entity—not even the ECB itself—can ever program, limit, seize, or impose expiry dates on digital euros. These principles should be protected by law, ensuring that the digital euro retains the essential freedoms of physical cash.
Unfortunately, this is unlikely to happen because programmable control, limits, and surveillance are not just theoretical concerns—they are central to the ECB’s plans. The ECB is moving towards a system that benefits central banks and governments at the expense of ordinary citizens.
Conclusion: A Digital Euro We Cannot Trust
The introduction of the digital euro represents a threat to financial freedom. It is programmable by nature, tied to your personal identity, and subject to limits and inflationary risks. If the ECB truly wants to establish a digital currency that citizens can trust, they must constitutionally guarantee that it will never be subject to control, manipulation, or expiration.
Until such guarantees are made, the digital euro will remain a tool for potential financial control—one that every European citizen should view with extreme caution.
(this was written as a distillation from my previous blogposts in Dutch, and compressed by an AI because of time constraints).
