The European Central Bank will initiate community consultation and initiate trials to help the bank decide whether or not to create the “digital euro”.
|Photo is for illustration only. (Source: Industry Europe)|
The European Central Bank (ECB) is expected on October 12 to launch a public consultation and initiate trials to help the bank make a decision whether or not to create a “digital euro“for the common currency region of 19 countries or not.
The move comes amid the COVID-19 epidemic accelerating the shift away from cash and policymakers concerned about the robust growth of electronic money private like Bitcoin.
The digital euro will be an electronic version of the euro and coins and it will be legally procured and guaranteed by the ECB. The coin’s implementation will also allow individuals to be deposited directly into the ECB for the first time. This can be safer than depositing money in commercial banks that could go bankrupt or keep cash.
Like cash, digital money can be stored outside of the banking system, such as in a “digital wallet.” It will allow citizens and businesses to make regular payments quickly, easily and securely.
The ECB insists that the digital euro will “supplement the cash, not replace it”. The issuance and transfer of digital euro currency can be done using the blockchain technology that cryptocurrencies like Bitcoin are using.
The COVID-19 pandemic has spurred online payments, amid people avoiding the use of banknotes and coins over fears they could spread the SARS-CoV-2 virus.
According to a recent report by Euromonitor International, even in Germany, where cash is supposed to be “king,” consumers are expected to spend more money with cards than cash this year for the first time.