The European Central Bank has initiated the preparatory phase for the launch of the digital euro.
In an announcement on 18 October, the President of ECB, Christine Lagarde, expressed her commitment to digital euro:
“We need to prepare our currency for the future. We envisage a digital euro as a digital form of cash that can be used for all digital payments, free of charge, and that meets the highest privacy standards. It would coexist alongside physical cash, which will always be available, leaving no one behind.”
In an X (formerly known as Twitter) post, Christine Lagarde shared a video discussing the advantages of the digital euro.
Spain Embraces Digital Euro
Banco de España, the central bank of Spain, has contributed to the ongoing dialogue around the potential advantages of a digital euro, following in the footsteps of other European financial institutions.
In a statement released on 19 October, the central bank provided an overview of the European Union’s envisioned central bank digital currency (CBDC) and its implications.
When discussing the advantages of digital currency, the central bank highlights how physical cash restricts the full utilisation of the benefits of the increasingly digitalising economy and society.
On the other hand, the digital euro is set to transform electronic payments, playing a vital role in the financial arena.
Particularly, the bank accentuates the capability for offline transactions with the digital euro, emphasising its privacy attributes similar to traditional cash.
Additionally, the document stresses that users’ data in online transactions would solely be visible to their individual financial institutions, not the CBDC infrastructure provider, Eurosystem.
European Union Digital Euro Efforts
Finland is making proactive strides in contributing to the development and possible adoption of this digital currency.
The Bank of Finland has echoed a positive sentiment, emphasising the significance of the digital euro project within the European payment sector.
Looking ahead, the future of the digital euro remains a topic of interest, accompanied by a range of uncertainties.
While the European Central Bank and various member states are actively involved in the preparatory phases, the final decision on its issuance still hangs in the balance.