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Digital Cash: What It Is and How It Works

Digital Cash: What It Is and How It Works

When we think of "electronic payments", there are a lot of different interpretations: bank cards, credit cards, PayPal and the likes, mobile money, and cryptocurrencies. But they all work in widely different ways. Lately, many central banks – including the European Central Bank – have started investigating or piloting digital currencies to introduce yet another way to pay electronically. In this talk, I will explain the technical (and social) differences between those payment methods and give insights into how such a digital currency platform could be designed.

Lars Hupel

June 28, 2023

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  1. Digital Cash What it is and how it works Lars

    Hupel GOTO Amsterdam 2023-06-28
  2. Who uses card payments the most? 440.4 Lithuania 409.9 Luxemburg

    392.6 Denmark Card payments per person per year, 2021 (Statista)
  3. “In a modern economy, being able to pay digitally is

    a basic need for people.“ Fabio Panetta
  4. More than 13 million adults in the EU face financial

    exclusion More than 13 million adults in the EU face financial exclusion
  5. Basic functions of money Legal tender Means of payment Unit

    of account Store of value “Can I pay my taxes?” “Can I pay at a shop?” “Would I use it for my pension?” “How much does this cost?”
  6. In 2023, over 20 countries will take significant steps towards

    piloting a CBDC. https://www.atlanticcouncil.org/cbdctracker/
  7. What do users want? 33,0 % 100 % secure 29,1

    % usable everywhere 24,7 % no fees
  8. “Currency cannot be private, money is a public good of

    sovereignty” François Villeroy de Galhau
  9. 1 ECB will not deal with users directly 2 Digital

    Euro will not be programmable 4 Payments can be conducted offline 3 Legal tender without interest
  10. How does a transaction work? 0x2A € 8 0x13 €

    3 0xA9 € 5 Alice Bob 0x48 € 9 0xC7 € 9 0x4E € 4
  11. Will this run on DLT? Will this run on DLT?

    Maybe. Maybe not. Maybe. Maybe not.