According to the European Commission, consumers in Europe should in future be able to pay with euro coins and banknotes as well as with a digital euro. A “widely accepted, low-cost, secure and resilient” digital version of the currency should be considered a means of payment just like cash, according to a legislative proposal presented by Brussels authorities on Wednesday.
The proposal creates the legal framework for the digital euro – the European Central Bank (ECB) decides if and when it will be issued. According to the Commission, the digital euro should function as a digital wallet. Citizens and businesses should be able to use it free of charge for both online and offline payments, even when there is no internet connection, such as in remote areas or underground parking garages. Data protection must also be guaranteed. Traders throughout the euro area would in principle be obliged to accept the digital euro.
The ECB has been working for years on the digital euro as a supplement to cash. On Wednesday, the central bank confirmed that it would complete its research phase on the digital euro in October 2023: “The Governing Council will then decide whether to launch the next phase of the project.”
Start signal 2026 at the earliest
ECB President Christine Lagarde said: “We look forward to continuing to work with other EU institutions towards a digital euro to ensure that our currency is fit for the digital age.” euro at the earliest in 2026.
With another bill presented on Wednesday, the European Commission wants to ensure that cash remains widely accepted. In the euro area, everyone should be able to choose their payment method freely and have access to basic services with cash, it said. This ensures financial inclusion of vulnerable groups, such as the elderly. The legislative proposals are still subject to negotiation between EU countries and the European Parliament.
Concerns about surveillance
In a response, NEOS warned of possible privacy violations. “It must be ensured that the technology is decentralized and that the ECB cannot understand who is spending its digital euros where,” said NEOS spokesperson Gerald Loacker in a broadcast. “China uses its digital currency to monitor its citizens’ payments. Such a model would be fatal and should be ruled out in any case.”
Austrian banks would support efforts to further develop the payment, but “customer benefits, security and the particularly sensitive area of privacy protection” are essential requirements for the digital euro project, said Willi Cernko, president of the Federal Bank and Insurance Department Economic Chamber Austria (WKÖ) on Wednesday according to a broadcast. The effects on the monetary and economic system should be examined in detail and the basis for a public discourse created. The freedom to choose the payment method must be preserved.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
