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Applying negative interest rates can be a good thing depending on what policy the central bank pursues, and they don't add to any risk of hyperinflation, because central banks if anything pursue price stability or targeted inflation as one of their policy goals. (and have been very good at it in fact, and digital cash changes no incentives here).

I personally have absolutely no problem with them and I'd be very glad if I could settle every transaction with a digital Euro. I don't particularly enjoy the middlemen in the form of countless payment processors who all take cuts out of transactions, and I don't really see what privacy or tracking burden applies that existing firms don't already engage in.

To me the payment infrastructure consisting of countless of private firms seems more like a relic of the past. Free, instant financial services to me are ideally a public utility in the same way the water or transport infrastructure is.




> I'd be very glad if I could settle every transaction with a digital Euro. I don't particularly enjoy the middlemen in the form of countless payment processors who all take cuts out of transactions

Are we sure those digital currencies would be handled directly and fully by the central bank at no (direct) fee per transaction? Who's to say that the way things currently work won't stay exactly the same, except for your Visa card being denominated in dEuros instead of Euros?

I may be a pessimist, but the way I see it, the current end-user facing financial system (retail banks and payment processors) are much too big and much too greedy to stand idly by while the central bank takes their pie away.


Just because the central banks issue the money, it doesn't necessarily mean that they also have to handle the transactions.

The current state of merchant banks and payment providers can very well continue, without CBs having to assume new responsibilities.

After all, the trend is towards more privatisation, not less.

I share your pessimism. I'd say the central bank is the oven wherein the commercial banks bake their pies.




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