A digital euro on its way to fight cryptocurrencies
“We are entering the age of digital money”, writes European Central Bank’s executive board member, Fabio Panetta in a blog post introducing ECB’s testing of a digital euro. The bank’s governing council is launching a project to get ready for the possible issuance of a digital euro.
International Monetary Fund and some national central banks have already introduced various studies and tests of central bank issued digital currency in aa time with much publicity around cryptocurrencies like bitcoins, ethereum and litecoin.
The cryptocurrencies are seen as a more modern and easier solution for payments but they are unstable. Not being guaranteed by central banks the value varies a lot also over shorter periods of time.
Panetta says the ECB will commit the resources necessary to design a marketable product.
“But a decision about whether or not to issue a digital euro will only come at a later stage. And in any event, a digital euro would complement cash, not replace it.”
“Much like commodity or representative money in the past, digital money is emerging in response to changes in society and technology.”
Panetta stresses that the pandemic has shown how fast change can happen. And this is affecting the way we pay. We are increasingly buying digitally and online.
“The role of cash as a means of payment is declining”, he says.
“Given the digital transformation under way, which has the potential to transform the payments landscape and even the entire financial system, central banks must be bold and keep up with the pace of change.”
“A digital euro would reduce the cost of transactions. It would foster financial inclusion by aiming to make digital payments available to those who currently don’t have access to financial services. And it would enable users to make their purchases across all outlets and countries in the euro area.”
“Being offered by the central bank – which has no commercial interest in monetising the data of users – the digital euro would help to protect people’s privacy against commercial usage or unjustified intrusion.”
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