Despite the establishment’s ongoing efforts to FUD ‘average joes’ around the world out of cryptocurrencies and create such negative sentiment that no patriotic-minded citizen should even ‘want’ to decentralize their wealth away from government (by bank proxy) control, we noted in surprise the frankness of The New York Fed’s economists last week, when they admitted…

If we lived in a dystopian world without trust, bitcoin might dominate existing payment methods. But in this world, where people do tend to trust financial institutions to handle payments and central banks to maintain the value of money it seems unlikely that bitcoin could ever be as convenient as existing payment means.

Which begged the question: what happens when the “trust” dies?

The answer, of course, is the very existence of cryptos: to create a world in which not one network is reliant on “trust” and the presence of a master node.

Which brings us to the question of a central-bank-issued cryptocurrency – an odd amalgam of distributed ledger and centralized control? Deutsche Bank attempts to answer the question simply – Why would we use crypto-euros? (Spoiler Alert: they’re not convinced… at all).

The rise of bitcoin and other cryptocurrencies and the decline in cash payments are the background for a new concept: digital cash issued by central banks. An old academic debate about who creates money and how is resurfacing, but what about the user’s perspective? Why would we use crypto euros?

Central banks are looking into cryptocurrencies and the underlying distributed ledger technology, as they carry responsibility for issuing physical cash, overseeing and/or providing payment clearing and settlement systems, conducting monetary policy and safeguarding financial stability.

In the areas of payments and savings, digital cash would compete against bank deposits, physical cash and private cryptocurrencies to win over consumers.

Unless its use was strongly pushed by regulation, digital cash would need to convince users by offering better and more convenient payment solutions than other payment systems. In particular, it would need to match current low fee levels and high safety standards for regulated consumer payments.

In an environment of high trust in public institutions, consumers would probably not be concerned if digital cash offered little data privacy.

For savings purposes, consumers would simply base their choice between digital cash and bank deposits on the difference in interest rates.

However, in times of financial or political uncertainty, people may think beyond convenience and yield.

In case of financial turmoil, consumers can use central bank money – physical or digital cash – as a safe haven.

However, if fundamental trust in monetary and political stability were lost, people would probably turn away from any form of the sovereign currency in favour of other alternative assets or private cryptocurrencies.