2023-07-08 14:15:00
ECONOMY – The European Central Bank (ECB) has taken another step to make digital currency a legal, official and controlled currency in Europe. The objective will be to exchange euros for digital euros and control the monetary flows of 300 million people.
The European Commission presented on Wednesday June 28 its proposal for a legal framework for a possible ECB digital euro in addition to cash. This measure is unprecedented in that it sets limits on the amounts that customers can hold in order to prevent a substantial flight of bank deposits. Users, willing to pay more than the set limit, will be able to link the digital wallet to their bank account.
Cash and digital
The package includes two sets of measures aimed at guaranteeing citizens the possibility of making cash and digital payments to pay their expenses: a legislative proposal setting the legal framework for a possible digital currency and a proposal relating to the legal auction of euros in cash.
Presenting the package, Vice-President for Economic Affairs Valdis Dombrovskis and European Commissioner for Economic Affairs Paolo Gentiloni underlined the need for the EU to adapt to changing times. This context of digital transition has accelerated with the Covid-19 pandemic and the increase in electronic payments.
The ECB proposal gives citizens and businesses an additional option to pay digitally with a widely accepted form of public currency, “cheap, safe and resilient” in the euro area. This will complement private solutions such as PayPal and Paylib.
Zone euro
Like cash, it is intended that the digital euro can be used with the usual national and international private means of payment, such as cards or payment apps. It will work as a digital wallet that will allow companies to pay with the digital euro anytime and anywhere in the eurozone, and this will extend to workers’ wages.
Also, the idea is for this digital wallet to be available for both online and offline payments. Payments can then be made from one device to another without an internet connection, from a remote area or from an underground car park.
Banks say the digital euro will allow users to make digital payments while revealing less personal data than when paying by card, cash or ATM.
Eurozone stores will be forced to accept digital euros, except for smaller merchants who choose not to accept them. In fact, Brussels recognizes that the cost of setting up a new infrastructure to accept this type of payment in euros would be “disproportionate”.
If the proposal is adopted, the Council and the European Parliament will establish the legal framework for the digital euro. However, it will be up to the ECB to decide on the timing and date of issuance of the digital euro, for which the investigation will be completed in the autumn.
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