Only money that goes out of date like a newspaper, rots like potatoes, rusts like iron, evaporates like ether, is capable of standing the test as an instrument for the exchange of potatoes, newspapers, iron and ether.

-- Silvio Gesell in The Natural Economic Order

The European Central Bank (ECB) aims to launch the new digital euro as early as October 2025. In both documents and speeches, this central bank digital currency (CBDC) is equated with cash. For example, they describe the digital euro as “a digital form of cash.”

But is this truly the case? It has previously been documented that such currencies or payment systems can be programmed or controlled. This could mean, for instance, that money could have expiration dates, be restricted from purchasing certain goods and services, or be limited to specific geographic areas. Such money could also enable record-low interest rates: funds could “rot like potatoes”, an idea some economists have dreamed of for a century. The possibilities are nearly endless.

Agustín Carstens, former head of the “central bankers’ central bank”, the Bank for International Settlements (BIS), has admitted that central bankers tend to talk about CBDCs as equivalent to cash, but that there are enormous differences:

For example, in cash, we don’t know, for example, who is using a $100 bill today. We don’t know who is using a $1,000 bill today. A key difference with the CBDC is that central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability,

-- Agustín Carstens

According to critics, central banks actually lack all credibility when claiming to protect privacy rights, especially over time. The fact that the Swedish Transport Agency already revokes numerous people’s driver’s licenses on extremely flimsy grounds (such as blood tests) is worth noting in this context, as is the EU’s mass surveillance proposal, Chat Control 2. This latter proposal likely violates the right to private and family life enshrined in the European Convention on Human Rights. On closer inspection it might even appear as if the power elite are engaged in a concerted effort to erode fundamental human rights, both in Europe and elsewhere.

ECB President Christine Lagarde has claimed that “cash is here to stay”. This comes even as other experts argue that a key condition for a “well-designed CBDC” is its ability to “to facilitate the gradual obsolescence of paper currency”. How are we to reconcile these positions?

A recent research study examined whether the proposed digital euro could serve as a replacement for cash. The findings unequivocally show that the idea of the digital euro being equivalent to cash “is rejected”.

The Digital Euro cannot fully mimic the role of physical cash, particularly in offline and privacy-sensitive contexts. As a result, the hypothesis that the Digital Euro is an electronic equivalent of physical Euro cash is rejected.

When using cash, the user generally remains anonymous. While a €20 note is always a €20 note, this does not hold true for so-called digital cash. A neighbour’s digital €20 unit can be distinguished from yours. Your money could be assigned a lower or higher value than your neighbours’.

We should ask ourselves why the central bank insists on comparing the digital euro with cash - given that the proposed system is fundamentally different. Indeed, why does the ECB insist on gaslighting European citizens? And we might also ask ourselves why so few mainstream media outlets critically examine and fact-check these erroneous claims.

“The difference between a bad electronic cash system and well-developed digital cash will determine whether we will have a dictatorship or a real democracy.” said cryptographer David Chaum as early as the 1990s. What if he was onto something?