The European Commission Is Preparing the Arrival of the Digital Euro

The EU commission is preparing the arrival of the digital euro. It will evidently be emitted by the European Central Bank that, along with its colleagues worldwide, is evaluating the possibility of integrating cash money with digital currency and, in ECB’s case, with the digital euro.

This currency will offer consumers another payment alternative at the European level and will be available along with the existing private means of payment at national and international levels, such as credit and debit cards or applications.

How the digital euro will work

It will function like a digital wallet, which can be used – in the Eurozone – to pay any time at any place, both online and offline, by transferring money from one personal device to another, without Internet access. The payor can choose whether to use paper or digital currency, and the merchant (with very rare exceptions) should be able to accept both.

While for online payments this solution is essentially comparable with existing systems, offline users will be guaranteed the highest level of confidentiality and data security, as digital payments reveal fewer personal data than what is presently being transmitted when using payment cards. This will be exactly like paying cash or withdrawing money from an ATM.

If the digital currency is adopted, it will be emitted by the European Central Bank with a stable value, along with cash, for which it can always be exchanged. This could also become an important asset in the context of the cryptocurrency market development.

Who is going to distribute it

The banks and other payment service providers in the EU will distribute the digital euro among people and businesses, and accounts can be opened at post offices or local government agencies, to help those who have no bank accounts. Throughout the Eurozone, merchants will be required to accept the digital euro, with the exception of very small businesses, for which the equipment to accept these types of payments could be disproportionally expensive.

When will it arrive (if it arrives)

The process is only starting, and the fact that the EU Commission has defined the legal basis can already be considered a step forward. If the acceptance of the digital European currency is approved by the European Parliament and the Council, the ball will be in ECB’s corner, so the bank will have to decide whether or not to emit the digital euro. But it will take years, at least until 2028.