Monero Policy Working Group Meeting: Tuesday 25th July @ 16:00 UTC about meta HOT 1 CLOSED

[2023-07-25 17:00:37] <midipoet> hello
[2023-07-25 17:00:50] <midipoet> Agenda here: https://github.com/monero-project/meta/issues/862
[2023-07-25 17:00:58] <midipoet> 1. Greetings
[2023-07-25 17:01:48] <andrea[m]> Hello
[2023-07-25 17:02:45] <midipoet> hello andrea[m] 
[2023-07-25 17:03:06] <midipoet> let's give a min or two and see if anybody else shows up (if not we can continue)
[2023-07-25 17:05:37] <ArticMine[m]> Hi
[2023-07-25 17:05:47] <midipoet> hi ArticMine[m] 
[2023-07-25 17:05:57] <midipoet> ok, so 2. EC public consultations
[2023-07-25 17:06:18] <midipoet> any general thoughts about these?
[2023-07-25 17:06:25] <andrea[m]> Some random considerations on the EU public consultations on the digital euro and on the legal tender status of physical cash:... (full message at <https://libera.ems.host/_matrix/media/v3/download/libera.chat/fa30cf6b40c281cf7ef85a3b6600221716729037>)
[2023-07-25 17:07:42] <midipoet> andrea[m]: this is a great starting point
[2023-07-25 17:08:01] <ArticMine[m]> The cash / legal tender resolution is  a direct result of a legal ruling 
[2023-07-25 17:08:36] <ArticMine[m]> To put it bluntly they did not have a choice 
[2023-07-25 17:09:03] <midipoet> ArticMine[m]: is that what benedictvs[m] mentioned last time?
[2023-07-25 17:09:43] <ArticMine[m]> ... and tried to make the best of what they saw as a serious seatback 
[2023-07-25 17:09:55] <midipoet> andrea[m]: for  your point 3, does the Regulation mention Digital ID and Programmability explicitly?
[2023-07-25 17:10:23] <benedictvs[m]> Hi!
[2023-07-25 17:10:43] <ArticMine[m]> There is a reference to the court ruling
[2023-07-25 17:10:44] <midipoet> andrea[m]: and did they mention also Store of Value explicitly in the Regulation (i also missed that)? 
[2023-07-25 17:10:53] <benedictvs[m]> midipoet: I’m not sure, but the coincidence is there
[2023-07-25 17:11:33] <andrea[m]> they just mention the digital ID and programmability and SoV, without explaining how they would be practically implemented
[2023-07-25 17:11:56] <midipoet> ArticMine[m]: yes, probably this one: See judgment of 26 January 2021 in Joined Cases C-422/19 and C-423/19, Dietrich and Häring (EU:C:2021:63).
[2023-07-25 17:12:33] <midipoet> taken from: "The growth of electronic payments, a trend accelerated by COVID-19, has led to a general decline in cash payments and the reductionof automated teller machine (ATM) networks in a number of Member States means there are risks to access to cash. Thus, the issue of the scope and meaning of the legal tender status of cash has become more prominent in the EU policy agenda, as outlined in the Commission’s Retail 
[2023-07-25 17:12:33] <midipoet> Payments Strategy and in view of the recent
[2023-07-25 17:12:33] <midipoet> 2 ruling of the Court of Justice of the European Union on the matter ."
[2023-07-25 17:13:12] <ArticMine[m]> Yes 
[2023-07-25 17:13:40] <andrea[m]> ArticMine[m]: Interesting. To me, point 3 above is the main one. It seems to me that they are trying to make room for the substitution of physical cash with digital cash without explicitly saying this. But maybe I am reading too much into it 
[2023-07-25 17:14:07] <Reuben[m]> What does it mean the digital euro should not be a SoV? So regular Euro is a SoV but digital euro is not? SOrry if my question is naive.
[2023-07-25 17:14:14] <ArticMine[m]> The operative part is the last part of the judgement 
[2023-07-25 17:14:40] <midipoet> andrea[m]: can you point to where they discuss programmability and SoV?
[2023-07-25 17:14:51] <andrea[m]> midipoet: Incidental note. There is a passage where they say that ATMs are a cost for bank. So their reduction is not because of less demand, it is more likely because of cost cutting
[2023-07-25 17:15:01] <ArticMine[m]> It sets the limits of anti cash lagislation
[2023-07-25 17:16:49] <Reuben[m]> Ah it's under this one: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13392-A-digital-euro-for-the-EU_en
[2023-07-25 17:16:50] <Reuben[m]> for the SoV 
[2023-07-25 17:17:12] <andrea[m]> Page 3 of the digital euro document:... (full message at <https://libera.ems.host/_matrix/media/v3/download/libera.chat/321a52b9aff4659e1a78cc9f643fe7fb80fcc95f>)
[2023-07-25 17:17:38] <Rucknium[m]> With these programmable currency proposals that have disadvantages compared to cash, I don't understand how you avoid https://en.wikipedia.org/wiki/Gresham%27s_law if both physical cash and programmable currency are both circulating wit the same face value.
[2023-07-25 17:18:25] <Reuben[m]> "Financial intermediaries (i.e. payment service providers, credit institutions), which could distribute the digital euro and be able to develop additional innovative services on top. However, if deposits are converted to digital euro at a larger scale, the intermediation role of some of these might be adversely impacted and could lead to higher funding costs for credit institutions and their increased reliance on Eurosystem funding.
[2023-07-25 17:18:26] <Reuben[m]> The design of the digital euro will thus seek to minimise the risk of large-scale conversion of deposits e.g. by
[2023-07-25 17:18:26] <Reuben[m]> introducing limits or disincentives to using the digital euro as a store of value instrument."
[2023-07-25 17:18:44] <Reuben[m]> Their concern is that the digital euro remove the need for banks, which would mean financial institutions lose deposits. 
[2023-07-25 17:18:58] <Rucknium[m]> AFAIK, all store gift cards have an actual value on the market that is lower than their face value. That's similar to these programmable currencies
[2023-07-25 17:19:59] <midipoet> andrea[m]: is that from the proposal for a regulation text, or another one of the documents?
[2023-07-25 17:20:10] <Reuben[m]> * lose deposits and have less ability to lend.
[2023-07-25 17:20:10] <andrea[m]> The digital euro will be legal tender, which means that it �must� be accepted at face value
[2023-07-25 17:20:56] <andrea[m]> midipoet: The digital euro one. Also, there is the passage posted by Reuben
[2023-07-25 17:21:05] <Rucknium[m]> Sometimes the laws of economics are stronger than laws imposed by legislatures
[2023-07-25 17:21:23] <Rucknium[m]> Does not apply to the informal market
[2023-07-25 17:21:35] <andrea[m]> Rucknium[m]: In the long run, it is always the case
[2023-07-25 17:21:53] <Rucknium[m]> Have you ever seen a government try to maintain a currency peg? It usually does not go well
[2023-07-25 17:22:41] <midipoet> andrea[m]: it must just be me, but i cannot find those references in the actual Regulation text. i will try again later
[2023-07-25 17:22:48] <benedictvs[m]> Rucknium[m]: The issue is that programmable money circumvents democratic monetary policy making
[2023-07-25 17:23:18] <benedictvs[m]> a legislative process is turned into central bank governance
[2023-07-25 17:23:21] <Rucknium[m]> Does legal tender mean merchants must accept it? The definition of legal tender varies by jurisdiction. Do merchant accept money they suspect is sourced from illegal activities?
[2023-07-25 17:23:36] <Reuben[m]> Isn't the feedback period closed for some of these already? 
[2023-07-25 17:23:57] <midipoet> broadly speaking (from a Monero perspective), do we care if the programmability of the digital euro impacts its use/effectiveness as a money?
[2023-07-25 17:24:01] <ArticMine[m]> It has to be accepted as payment for a debt. 
[2023-07-25 17:25:06] <Rucknium[m]> ArticMine: Right. A merchant doesn't create a debt. They don't have to accept legal tender in many jurisdictions.
[2023-07-25 17:25:09] <andrea[m]> "The concept of legal tender as interpreted by the Court of Justice for euro banknotes implies: (i) mandatory acceptance, (ii) at full face value and (iii) with the effect of discharging payment obligations"
[2023-07-25 17:25:46] <midipoet> Reuben[m]: most of these had two stages. one stage as a call for evidence/feedback on impact assessments, regulatory scrutiny opinions, etc, and then a second round, when the actual regulatory text is published. 
[2023-07-25 17:26:11] <ArticMine[m]> The court ruling goes somewhat further than that 
[2023-07-25 17:26:11] <Reuben[m]> midipoet: yes just saw! 
[2023-07-25 17:26:39] <ArticMine[m]> It addresses the effective elimination of cash
[2023-07-25 17:27:58] <Reuben[m]> <midipoet> "andrea: it must just be me..." <- Yeah it's not in the regulation text, just the earlier call for evidence doc. 
[2023-07-25 17:29:00] <midipoet> Reuben[m]: ah ok. 
[2023-07-25 17:29:16] <benedictvs[m]> Reuben[m]: Do you have a link for the call for evidence?
[2023-07-25 17:30:20] <andrea[m]> What do you think of this passage?
[2023-07-25 17:30:20] <andrea[m]> "The Commission is empowered to adopt delegated acts in accordance with Article 10 to supplement this Regulation by identifying additional exceptions of a monetary law nature to the principle of mandatory acceptance. Those exceptions shall be justified by an objective of public interest and proportionate to that aim, shall not undermine the effectiveness of the legal tender status of euro cash, and shall only be permitted PROVIDED
[2023-07-25 17:30:20] <andrea[m]> THAT OTHER MEANS FOR THE PAYMENT OF MONETARY DEBTS ARE AVAILABLE."
[2023-07-25 17:30:20] <andrea[m]> Is it saying that if payments with the digital euro are available, there is room to not maintain the mandatory acceptance of physical cash?
[2023-07-25 17:30:36] <Reuben[m]> benedictvs[m]: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13392-A-digital-euro-for-the-EU_en
[2023-07-25 17:30:36] <Reuben[m]> here first download link. under Call for Evidence
[2023-07-25 17:30:49] <benedictvs[m]> Reuben[m]: > <@reuben:firo.org> https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13392-A-digital-euro-for-the-EU_en
[2023-07-25 17:30:49] <benedictvs[m]> > here first download link. under Call for Evidence
[2023-07-25 17:30:50] <benedictvs[m]> Thank you!
[2023-07-25 17:31:08] <midipoet> ok. so there seems quite a bit of interest in these consultations: 1. Proposal for Regulation on the legal tender of euro banknotes and coins and 2. Proposal for a Regulation on Digital Euro 
[2023-07-25 17:31:41] <midipoet> do we want to try and draft responses to these (short ones). it seems mostly in favour of 1, and then outlining some risks in 2?
[2023-07-25 17:32:51] <Reuben[m]> I'm new to how the working group works, how do you guys collaborate on the draft responses to avoid overlap? Is there an active document that people can work on? 
[2023-07-25 17:34:19] <midipoet> Reuben[m]: yeah, i would set up a Google drive folder and then we work on a shared document (we use Google drive mainly as it works well for this sort of thing - comments/review mode, etc)
[2023-07-25 17:34:22] <andrea[m]> I'd be happy to collaborate 
[2023-07-25 17:36:03] <Rucknium[m]> Any reason not to use Cryptpad to get away from Google?
[2023-07-25 17:37:23] <midipoet> ok. i will set up a folder and templates to work from. we should try and keep response to 1. v.short. and 2. short. I would recommend perusing the consultation on the open data framework, as it seems there is a lot in there that will guide how the "data led financial system" intends to work.
[2023-07-25 17:38:34] <midipoet> Rucknium[m]: mainly as i feel that Google works better. i know Cryptpad is good, and getting better all the time, but i haven't been ready to take the plunge. 
[2023-07-25 17:38:44] <midipoet> if people feel strongly about it, i suppose we can try
[2023-07-25 17:39:18] <ArticMine[m]> Are we going to respond to the digital Euro 
[2023-07-25 17:40:02] <ArticMine[m]> There are serious issues  l see with visitors to the EU
[2023-07-25 17:40:26] <midipoet> ArticMine[m]: my plan was to set up two templates, one for legal tender and one for digital euro
[2023-07-25 17:40:31] <midipoet> and see how we get on
[2023-07-25 17:41:04] <ArticMine[m]> Great. 
[2023-07-25 17:41:44] <ArticMine[m]> Both with a deadline of September ?
[2023-07-25 17:42:20] <ArticMine[m]> I believe early 
[2023-07-25 17:42:48] <midipoet> ArticMine[m]: it looks like it. though the dates keep getting pushed out. i read that they move the dates by two weeks as long as the texts are not available in all European languages. 
[2023-07-25 17:43:40] <ArticMine[m]> I think September 8th, but we need to verify that 
[2023-07-25 17:43:44] <midipoet> yes
[2023-07-25 17:44:25] <midipoet> ok. as 3. Next Steps - i will set up the Google templates
[2023-07-25 17:45:00] <midipoet> 4. AOB?
[2023-07-25 17:45:28] <andrea[m]> Should our draft responses be ready around the end of August then?
[2023-07-25 17:45:53] <andrea[m]> Just to have a clear goal in mind
[2023-07-25 17:46:07] <midipoet> andrea[m]: yeah, we should try and have a final draft last week of august
[2023-07-25 17:47:07] <midipoet> we should really try and ensure we maintain arguments to the texts of the Regulations though (as i am fairly certain we have missed the boat on replying to the accompanying/preceding texts)
[2023-07-25 17:47:15] <Reuben[m]> Will be happy to collaborate too but will need to swot up on existing docs 
[2023-07-25 17:47:34] <ArticMine[m]> Yes. Leave the last week in August for review and final edits only
[2023-07-25 17:47:52] <midipoet> ok. so 5. Confirm next meeting
[2023-07-25 17:48:19] <ArticMine[m]> Two weeks from today?
[2023-07-25 17:48:28] <midipoet> yes
[2023-07-25 17:48:37] <midipoet> and we can try and get main ideas down on paper by then
[2023-07-25 17:48:52] <ArticMine[m]> Yes 
[2023-07-25 17:48:52] <andrea[m]> Sounds good
[2023-07-25 17:49:21] <midipoet> ok. 8th August, same time. 
[2023-07-25 17:49:32] <midipoet> i will set topic and make Agenda.
[2023-07-25 17:49:34] <ArticMine[m]> Great 
[2023-07-25 17:50:10] <midipoet> ok, so that is all. talk next time. i will post link to the folder once i have it ready
[2023-07-25 17:50:23] <andrea[m]> Thanks
[2023-07-25 17:51:35] <ArticMine[m]> Thanks for hosting the meeting