The European Central Bank released a new report last Friday, October 2nd, confirming that it has taken a serious interest in the study of a digital euro as a possibility. The Eurosystem, Europe’s financial ecosystem, will decide whether or not to begin the first phase, the investigation phase, in the eventual launch project for the digital euro.
The report made sure to include detailed speculations on how the digitalized currency could impact the Eurosystem, as well as how its implementation could increase future payments security.
Furthermore, one of the main arguments in the report attempts to acknowledge the future importance and necessity of a digital euro for the European Union’s economy and prosperity.
“A digital euro could support the Eurosystem’s objectives by providing citizens with access to a safe form of money in the fast-changing digital world. This would support Europe’s drive towards continued innovation. It would also contribute to its strategic autonomy by providing an alternative to foreign payment providers for fast and efficient payments in Europe and beyond.”
The document insures that cash will still be dominant, but
“…new technologies and the increasing demand for immediacy from consumers are changing the way European citizens pay. This is evident in the expanding role of fast electronic payments,”
The Bank’s report was not short on a number of requirements that the digitalized currency must fulfill in order to become integrated into the Eurosystem.
- Crucially, the digital euro must be made accessible throughout the Euro area .
- It must be adjustable with the latest payment technologies, but also flexible when eventual changes occur.
- The digital currency must be functional with all major private payment solutions.
- The digitalized euro must be user friendly, free of charge, and its usage must guarantee that users’ privacy will be protected.
- The digital euro has to be made available through resilient and adaptable payment channels that will be used in case of a global pandemic.
- It should be made available for global usage, be cost-effective, and environmentally friendly.
- It must serve a primary function as a form of payment, and not as an investment tool.
2021 could be a deciding year for EU’s economy. The introduction of a centralized digital euro has the potential to impact the global economy in ways that are unforeseeable as of yet.