Digital Euro: ECB Official Highlights Benefits and Progress
The European Central Bank (ECB) official Piero Cipollone has emphasized the advantages of a digital euro, outlining how it would enhance Europe’s financial sovereignty and resilience.
Speaking at the Committee hearing on Economic and Monetary Affairs, Cipollone underscored the tangible benefits of the digital euro for all stakeholders.
He emphasized that a digital euro would empower Europe to independently develop and manage digital payment solutions, bolstering the region's financial autonomy.
The Path to a Digital Euro
A digital euro would be a central bank digital currency (CBDC) in digital format, providing an efficient and inclusive payment solution, according to Cipollone.
The ECB's CBDC project, initiated in 2021, is currently at the midpoint of the preparation phase, with approximately one more year to go before completion.
This timeline aligns with ECB President Christine Lagarde's vision to launch the CBDC before her term concludes in 2027, ensuring the digital euro is future-proof.
The project is focused on establishing a methodology to determine the maximum holding limit for digital euros per individual, a crucial aspect for financial stability and crisis prevention.
Developing the Digital Euro Infrastructure
The ECB is diligently working on finalizing the digital euro rulebook, which will establish a clear set of rules and standards to ensure a consistent user experience across the eurozone.
Furthermore, the bank is in the process of selecting potential providers to develop the CBDC infrastructure and is conducting rigorous technical tests to assess privacy and offline functionality.
Digital Euro Benefits Consumers, Merchants, Banks
“Consumers could use a digital euro for all payments, everywhere in the euro area, also when shopping online.”
Consumers would have the convenience of using digital euros for all payments, both in-store and online, without any additional charges, ensuring widespread accessibility and user privacy.
For merchants, the digital euro would streamline payment processes and reduce costs associated with international card schemes, with additional safeguards to limit fees paid to banks for payment processing.
“A digital euro would include safeguards for merchants by capping the fees they pay to banks for processing payments.”
Banks would benefit from a digital euro by generating new revenue streams and assuming responsibility for distributing the CBDC, enhancing their role as a primary point of contact for users in the digital economy.
