The European Commission has launched a new legal framework to boost the use of "electronic money" within the EU, even as we all realise we had even less real money than we thought.
The Eurocrats have admitted that earlier utopian predictions that we’d all be loading cash on our mobile phones, travel cards or internet accounts have proved to be somewhat overblown. In part, it is blaming itself, saying current rules “have hindered the takeup of the electronic money market, hampering technological innovation”.
Translated, this means the foolish peasants (the rest of us) have refused to stop keeping anachronistic wads of notes and piles of coins in stupid places like pockets, in wallets, under mattresses, that sort of thing, when what they really should be doing is paying smart young things to take their money and convert it into cyber cash, loaded on trustworthy items like phones, Oyster cards, servers and deelie boppers.
So, in the interests of keeping the dream alive, Brussels has proposed a new framework for “issuing electronic money”. This will include a “technologically neutral and simpler definition”, ie that electronic money is “monetary value stored electronically on receipt of funds and which is used for making payment transactions". This will include e-cash stored on devices in the holders' possession or “remotely at a server.”
Brussels also promises a “new prudential regime”, which it promises will ensure “greater consistency between prudential requirements of electronic money institutions and payment institutions under the Payment Services Directive”.
This will include an initial capital of €125,000 “enabling market entrance for smaller players and a new formula to determine ongoing capital”.
If this sounds like a recipe for small fly-by-night operators to barge into the cyber economy, let’s just consider what a mess the old established financial players have made of the real economy over the last few months.
The Commission reckons these changes will give the market a shot in the arm, and “estimates show that this industry could reach a volume up to €10bn by 2012”.
The only thing missing? A reason why consumers – as opposed to financial institutions and other corporations - would actually want to move to electronic versions of cash. See if you can find one in the Commission’s working document here. ®