According to the president of the German Bundesbank, the digital euro will be part of everyday life within a few years. In about four years, “we will be able to pay with the digital euro”, predicted Joachim Nagel. Preparations for a digital version of the European single currency have been going on for years. The variant should therefore become legal, but not replace cash – that is, banknotes and coins.
“It’s not entirely trivial to implement the topic, but I think that’s a realistic time horizon,” Nagel said in an interview with Danyal Bayaz, finance minister for the state of Baden-Württemberg (Greens), in a podcast released Thursday was published.
ECB wants to decide in October
The European Central Bank (ECB) wants to decide in October whether to continue working on a digital euro. According to Burkhard Balz, board member of the Bundesbank, no upper limit for holding the digital currency has yet been set in the work on a digital euro. A limit of 3,000 euros is often mentioned, says Balz. “However, no decision has been made yet,” he noted. “This would probably only happen shortly before the actual issuance of a digital euro.”
The digital euro should not replace cash and should be able to be used in the same way as PayPal payment systems. On the other hand, you do not need a bank for processing. The digital euro is issued directly by the central bank and is therefore more secure than money in an account. The banks therefore fear a reduction in their business.
The digital euro would be more stable than cryptocurrencies
Unlike so-called cryptocurrencies such as bitcoin and ether, whose prices often fluctuate strongly, the introduction of a virtual European currency would offer private investors a more stable alternative, according to Nagel, because it would be linked one-to-one to the euro. In addition, with a digital euro, Europe would have its own digital payment offer as an alternative to payment service providers that are not based in Europe, such as Paypal.
It is “very logical and consistent for central banks to complement their product offerings with a digital currency and provide a secure infrastructure,” Nagel said. “People, but also the banks we need for the digital euro, will soon see that the digital euro offers new opportunities, new financial products, increases financial inclusion. The euro itself will be a success story,” said the president of the Bundesbank .
Brunner: “Privacy of citizens must be protected”
Austrian Finance Minister Magnus Brunner wants to wait and analyze the design of the European Commission’s announced digital euro. “The sensitivity of the project should not be overlooked,” said the ÖVP politician. He pointed out that there must be “clear added value” for citizens, “otherwise it makes no sense”. “It should also be ensured that if this is the case, it is merely an addition to cash as a means of payment and that cash as a means of payment remains untouched.” The privacy of citizens must also be protected.
FPÖ leader Herbert Kickl, on the other hand, locates a “salami tactic” at the European level: “First, the 500 euro note was abolished, and finally cash must be completely replaced by the digital euro. The goal is the transparent citizen, not free and verifiable .” Brunner replied: “The money must be received and will be received. There is no discussion at all that it will be abolished – neither in Europe nor in Austria.”
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.
