The EU is ready to take the next major step towards a digital version of the euro, a controversial project that was criticized by the public, politicians and banks even before it was launched, rpeorts RTE.
From China to the United States, from Jamaica to Japan, dozens of central banks around the world are exploring or have already introduced digital currencies as electronic payments allow people to spend money and reduce cash consumption.
The move towards creating a digital version of the single currency began in 2020 when European Central Bank President Christine Lagarde proposed the idea and the Frankfurt-based organization launched a public consultation.
Enthusiasts of the digital euro say it will replenish cash and ensure that the ECB does not leave a gap that private, usually non-European, players and other central banks can fill.
Critics have questioned the need for a digital euro, with banks warning of serious risks, while the ECB’s own research has shown that the public is concerned about the privacy of payments.
German MEP Markus Farber told AFP: “If we are just duplicating the existing payment infrastructure with the digital euro, that is not a good enough business case. For the time being, the digital euro seems to be a solution in search of a problem,” reports RTE.
According to the draft proposal reached by AFP, the commission noted that “long-term benefits of a digital euro … outweigh its costs” and warned that “the costs of no action can potentially be very large”.
The currency will be available to people living in the euro area and visitors.
Ms. Lagarde argued during a March panel event that digital currency is important for resilience and “safeguard European payment autonomy”, reports RTE.
American giants Visa and MasterCard currently dominate the global card payments market.
The ECB’s hard fight for victory against the Europeans. The public consultation showed that the number one priority for the digital euro is privacy.
To assuage public concerns, the ECB stressed that it would not try to regulate how people can spend digital currency or use it for surveillance, as critics say is the case in China.
“The ECB would not set any limitations on where, when or to whom people can pay with a digital euro,” ECB executive board member Fabio Panetta said in January, reports RTE.
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