Cash won’t disappear
The head of the Bundesbank expects the digital euro to be introduced soon
March 24, 2024, 7:08 p.m
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The digital euro should soon become a reality. Bundesbank President Nagel predicts its introduction within the next five years. It promises lower costs and more security for trading. According to Nagel, cash will still exist.
Bundesbank President Joachim Nagel expects the digital euro to be introduced quickly. “I am confident that we will have the digital euro in four to five years,” he told the newspapers of the Funke media group. He has all the prerequisites to be a success.
Transactions would be more cost-effective for retailers than with current electronic payment methods, says Nagel. “And privacy receives the highest possible protection. Because of the digital euro, no one has to fear the transparent customer.”
Nagel also pointed out advantages in protecting against cyber attacks. “With the digital euro, we can take more security measures ourselves than with many other projects. Because the technical infrastructure will be in Europe.” But there will not be 100 percent security.
Nagel still sees a future for the cash. “Electronic payment options are increasing, and cash is playing a less important role among young people. But we will continue to be able to pay in cash in the future.” Cash will not disappear. He feels more comfortable when he has cash with him. “It gives me security. I am independent of electronic payment systems, which can sometimes fail.”
Preparation phase already started
In the fall, the European Central Bank (ECB) gave the green light for a preparatory phase towards a digital euro. The aim is to finalize the regulations and select providers for the development of the platform and infrastructure. Before it can be introduced, the relevant EU legislative process must be completed.
The preparation phase, which started in November, is initially scheduled to last two years. Digital money is intended to counter the increasing competition in digital payment transactions from US companies such as Paypal and Apple Pay and the advance of cryptocurrencies such as Bitcoin and Ethereum.