NOTyour world is changing. The digital revolution has transformed society in a way that could hardly have been imagined just ten years ago. It is also disrupting payment methods, with the population increasingly favoring payments in digital form. The Covid-19 pandemic has accelerated this trend.
Central banks around the world are now exploring the possibility of supplementing the public currency they currently make available in the form of cash with a digital version: a central bank digital currency. In the euro area, the digital euro would offer a digital payment solution accessible to everyone, everywhere, and free of charge.
Still, cash is essential: it remains the preferred means of payment for small in-store purchases and person-to-person transactions. Most people in the euro zone want to be able to continue paying with banknotes and coins. This is why the European Commission and the European Central Bank (ECB) are strongly committed to ensuring that cash remains fully accepted and available in the twenty countries of the euro zone.
The many practical benefits of the digital euro
However, the use of cash to make payments is clearly declining in many parts of the world, including Europe. As we move towards a truly digital economy, the next logical step is to adapt cash to this new era.
Bringing together the cash euro and the digital euro would allow everyone to be able to choose the payment method they want, and would ensure that no one is left behind in the digitalisation of payments. Crucially, Europeans would be able to pay digitally across the entire eurozone, from Dublin to Nicosia and from Lisbon to Helsinki.
For consumers, the digital euro would have many practical advantages. It would be easy to use and free of charge. Anywhere in the euro zone, everyone could pay anyone for free with digital euros, for example using a digital wallet installed on their phone. For this, users would not even need to be connected to the Internet: they could also make their payments offline.
A springboard for the creation of new financial services
Privacy is an essential element of the digital euro. The ECB would not have access to users’ personal data or their payment habits. Offline functionality would further ensure a higher level of data privacy than any other digital payment method currently available.
You have 53.59% of this article left to read. The following is for subscribers only.