Central banks worldwide are racing to digitize their currencies, hoping to meet the challenges posed by cryptocurrencies and modern payment systems. The European Central Bank (ECB) is no exception. With its Digital Euro project, it seeks to usher in a new era of central bank money – publicly issued, universally accessible, and digitally native. But can this new form of money genuinely replace physical cash? Or are we chasing a promise that technology cannot yet deliver? In a recently published study in the Journal of Risk and Financial Management, I take a critical look at this very question: Can the…
Author: Prof. Patrick Schueffel
Author
Prof. Patrick Schueffel
Patrick Schueffel is professor at the Institute of Finance of Fribourg’s School of Management. His research interests focusses on the areas of Entrepreneurship in Banking & Finance, Innovation, Strategy and International Business and thus on Fintech. He has published widely in academic as well as practitioner journals in Switzerland and internationally. Prior to his academic career professor Schueffel served as the Chief Operating Officer of Saxo Bank (Switzerland) and was a member of the Senior Management of Credit Suisse
A plan that has been gathering dust for a hundred years may soon find new life in the digital age. The Chicago Plan, originally proposed during the Great Depression, envisioned a radical restructuring of the financial system to eliminate instability caused by speculative credit cycles. While its principles once seemed impractical, the advent of Central Bank Digital Currencies (CBDCs) now offers the technological means to implement it. Yet, the promise of stability comes with a hidden price: the disappearance of commercial banking as we know it and a shift toward unprecedented centralization of financial power. The Radical Premise of the…
Die Europäische Zentralbank (EZB) macht Dampf. Im Oktober dieses Jahres hatte die EZB beschlossen, die Vorbereitungsphase für den Digitalen Euro einzuläuten. Diese digitale Version des Euros, die von der EZB herausgegeben wird und als elektronisches Zahlungsmittel vorgesehen ist, soll elektronische Transaktionen direkt zwischen Verbrauchern und Unternehmen ermöglichen, ohne dass dabei kommerzielle Finanzdienstleister involviert werden. Nach Abschluss der zweijährigen Vorbereitungsphase will der EZB Rat entscheiden, ob der Weg für eine Einführung beschritten werden soll. Dann kann es schneller geschehen, als man glaubt. Als digitales Zahlungsmittel, über dessen Verwendung auf einem zentralen Ledger genau Buch geführt wird, birgt der Digitale Euro erheblichen…
Some people call Bitcoin a Ponzi scheme. I tend to disagree as I do not believe that the inventors of Bitcoin intended to operate a fraudulent investment operation. But Bitcoin does bear some commonalities with a Ponzi scheme. What is more, Bitcoin has the potential to bring down not only one major investment scheme, but multiple ones. Eventually it may turn out to be the Mother of All Pyramids (MOAP). Common wisdom has it that a Ponzi scheme requires an initial investment and the incentive for above-average returns. Moreover, the early investors and promoters of Ponzi schemes typically profit from…