Digital Euro – The European digital currency – Technology


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At a time when digitization has taken hold of almost every aspect of our daily life, the European Central Bank is exploring the possibility of creating a fully digital European currency – the digital euro. According to the ECB, digital currency would be a fast, easy and secure instrument for daily payments, accompanying the digitization of the European economy and actively encouraging innovation in retail payments.

A digital euro would still be a euro, like the banknotes and coins currently issued, but digital. It would be electronic money issued by the ECB and national central banks and accessible to all citizens and businesses.

The objective is to guarantee citizens of the euro zone free access to a simple, universally accepted, secure and reliable means of payment.

According to the ECB, the objective is not to replace cash, but to supplement it. In other words, access to cash will continue to be ensured throughout the euro area. The digital euro would only be an additional payment choice, contributing to accessibility and inclusiveness. The aim is to combine the efficiency of a digital payment instrument with the security of central bank money.

The benefits inherent in this digital currency would certainly include creating a solution for people who currently prefer not to use cash, as well as ending the dependence on digital payment instruments issued and controlled from outside the area. euro, which could weaken financial stability and monetary sovereignty.

Consistent with the use of any digital instrument, the protection of privacy would be a key priority if the digital euro is to help maintain confidence in payments in the digital age.

It is still a project in its infancy: launched in July of this year, as the ECB reinforces, the end of this project will not necessarily result in the issuance of this currency. Rather, the bank is simply preparing for the possibility of an issue in the future. In fact, the research phase will start in October of this year and will last for about two years. During this period, he will analyze how a digital euro could be designed and distributed to traders and citizens, as well as the impact it would have on the market and the necessary legislative changes. It will be at the end of this phase that the ECB will decide on the future of this currency. If so, the next phase would be to create and test possible solutions, in collaboration with banks and companies that could provide, among others, payment technologies and services.

On a positive note, the ECB reports that the experimental work done so far has shown that there are no major technological constraints to issuing a digital euro and that there are many ways to achieve it. design.

Note that the digital euro would not be a cryptocurrency, but a completely different currency, since it would be backed by a bank, which is not the case with crypto-currencies. Indeed, their prices are often volatile since there is no public institution to support them. Their value can increase or decrease significantly in a short period of time. In the case of the digital euro, anyone using that currency could have the same level of confidence as with cash, since both would be backed by a central bank.

If this project is to be carried out, experts from the ECB and national central banks in the euro area have defined a number of key requirements for a digital euro: accessibility, robustness, security, efficiency, confidentiality and legal compliance. These would be the basic principles by which this currency will eventually be guided.

The digital euro would be designed to work in conjunction with existing payment solutions, thus facilitating the provision of pan-European solutions and additional services to consumers.

Given the dramatic evolution of payment methods today, the digital euro would be a possible European solution to deal with the digital changes occurring in our daily life.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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