According to Robert Holzmann, governor of the Oesterreichische Nationalbank (OeNB), the introduction of a digital euro still lacks a convincing story to be accepted by the population. There is still a lot to convince, he said during a lecture in Brussels on Thursday. However, a digital euro is important for European sovereignty and can promote social inclusion.
“Money is an important public good,” said Holzmann at the event organized by the National Bank of Belgium. Other countries are already working on digital currencies. It is feared that if a stable and user-friendly digital currency is created here, it could replace the euro as a means of payment. “We don’t have to be the first, but we have to be prepared.”
Holzmann also hopes that a digital euro issued by the European Central Bank (ECB) could advance the project of a European payment system as an alternative to American systems such as Visa, Mastercard or PayPal. As a third argument, the head of the central bank mentioned social inclusion: Now that cash is becoming less and less important, it is important to offer people on the margins of society an alternative, so that they can also pay digitally.
‘It’s not about control’
Fears that a digital euro could replace cash and be used for surveillance were also addressed. The governor of the National Bank of Belgium, Pierre Wunsch, complained that the debate was not conducted rationally. “It’s not about control.”
If the euro is introduced in digital form, it should be understood as a complement to cash and as an alternative to private digital currencies such as Bitcoin, explains Evelien Witlox, program director for the digital euro at the ECB. Due to the way the digital currency is now planned, privacy is protected and you can pay for free just like with cash.
Preconditions presented
In June, the European Commission presented a legislative proposal with preconditions for a digital euro. However, the member states and the European Parliament still have to approve the text. Ultimately, the ball is in the ECB’s own court as to whether it will issue a digital version of the euro. In October, the central bank will be the first to decide whether the project will move on to a more concrete planning phase after a two-year research phase.
In any case, the European Commission’s proposal stipulates that citizens may not hold an account directly with the central bank. Banks and other financial intermediaries will therefore continue to play a role. They are then responsible, among other things, for supervising anti-money laundering rules, according to Witlox.
Maps for non-smartphone owners
There must also be a card solution for people who do not have a smartphone and therefore no digital wallet. In addition, it should be possible to make payments even without internet access, if the sender and receiver of the payment are in the same place. The amount that can be held in digital form must also be maximized. It is not yet certain how high this upper limit will be, Witlox said on Thursday. In the past, there was talk of a height of 3000 euros.
Another open question is whether and how third country nationals – for example tourists – can get their hands on the digital currency, says Holzmann.
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.
