EU Digital Euro Bill Leaked: Interest Outlawed and Programmability Restricted

The European Union (EU) has been working towards creating a digital version of its currency, the euro. A leaked version of the proposed digital euro bill reveals that the EU is looking to outlaw interest payments on the currency and restrict its programmability.

Interest Outlawed

The digital euro will operate differently than traditional currencies in that it will not pay interest. This means that holders of the digital euro will not earn any income on their holdings. The leaked bill reveals that this is intentional and is meant to discourage hoarding of the currency.

The European Central Bank (ECB) has previously voiced concerns that a digital euro could lead to a surge in the demand for cash deposits. By outlawing interest on the digital euro, the EU hopes to avoid this and ensure that the currency is used for transactions rather than as a store of value.

Programmability Restricted

The leaked bill also indicates that the digital euro will be less programmable than other cryptocurrencies. Programmability refers to the ability of a currency to contain smart contracts, allowing for automated processes to be built into transactions.

The EU’s proposed digital euro will have limited programmability, with smart contracts being restricted to very basic functions. This is likely to further discourage hoarding of the currency and to make it less attractive as a speculative investment.

Large Holdings and Exchanges

The leaked bill also includes provisions aimed at preventing large holdings of the digital euro. Companies and individuals holding significant amounts of the currency may be subject to additional regulation or taxes.

Exchanges that offer trading in the digital euro will also be subject to strict regulations, similar to those governing traditional financial institutions. The EU aims to prevent the uncontrolled rise of crypto exchanges and ensure that they operate in a manner consistent with the law.

What this could mean for Crypto?

The leaked digital euro bill reveals that the EU is taking a cautious approach to the introduction of its digital currency. By outlawing interest payments and restricting programmability, the EU hopes to ensure that the currency is used primarily for transactions and not as a speculative investment. Additionally, the EU aims to prevent large holdings of the currency and regulate exchanges in order to prevent the uncontrolled rise of the crypto industry.

While the leaked bill may not be the final version of the digital euro legislation, it provides insight into the EU’s vision for its digital currency. It remains to be seen how successful the digital euro will be and what impact it will have on the EU’s economy.