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Digital euro may come into force along with euro notes; the central bank decision soon…

Dublin: The European Central Bank is on a mission to adapt to the digital economy’s rapid evolution. The majority of European countries believe that a digital currency should be implemented as soon as possible.

The new system will also change the way the central bank issues money, but the ECB says the move is a response to growing demand for secure and reliable electronic payments. The current requirement is for a digital euro currency. According to central bank sources, the digital euro will be extremely useful in preventing citizens from abandoning the euro, avoiding the adoption of foreign forms of electronic money, and in situations where other means of payment are unavailable.

What exactly is the Digital Euro?

A digital euro is a digital version of the euro; payment apps on mobile phones or payment methods such as credit and debit cards will be used to make electronic payments.

The new system aims to make retail payments easier for eurozone citizens and businesses.

The ECB claims it will be as safe and easy to use as cash but different from ‘private money’ in that it can provide greater security to payment systems. It is not a cash substitute. It will coexist with cash in response to consumers’ growing desire to pay digitally. During the COVID era, global demand for digital transactions has increased. According to the central bank, payment service providers such as banks will facilitate the issuance of the digital euro.

Why is the ECB considering issuing a digital currency?

Non-European payment providers account for 70% of all point-of-interaction and e-commerce payments in Europe.

“The central bank is concerned that we will have a problem if we do not have our own control over the implementation of Europe’s major payment systems.” European donors need to ensure that they are comfortable issuing the euro currency going forward.

The ECB wants to maintain access to money and its role as a key regulator. Cash usage is decreasing; ‘perhaps in the distant future where cash is not such a priority for the user, there should always be another way to access public money in the digital realm’.

The central bank expects the digital euro to be introduced sooner rather than later in order to facilitate the currency’s next phase and ensure the euro’s “presence” in the digital ecosystem. The digital euro will address electronic payment requirements while avoiding competition from Bitcoin and other crypto tokens.

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