European politicians still need to decide whether this will actually happen. However, as the European Central Bank (ECB) evaluates the European Commission’s proposal for a digital euro, it continues to examine how such a euro should technically work. The ECB announced in Frankfurt that it will also examine how consumers and companies can obtain digital currency.
The purpose of the digital euro is to enable online payments with central bank money in the future. This is now only possible with cashless money issued mainly by foreign companies and private banks. Even someone without a bank account can keep digital euros on their mobile phone and use them to make payments.
The ECB emphasizes that it is not yet clear whether the digital euro will actually come. For this, the European Union must first give its consent.
The digital euro is a project that has been running for some time and is not entirely without controversy. Of all the points of criticism, two stand out above the rest. First: The digital euro offers a solution to a problem that does not exist because there is a cash euro that you can pay with. Secondly, won’t the central bank and maybe even the government look at what I spend?
There is actually no clear answer to the question of why a consumer or entrepreneur needs a digital euro. Inge van Dijk, Director of Payments at De Nederlandsche Bank, emphasizes that the digital euro is, first of all, a future project in which rapidly increasing digitalization will probably go much further, for example in payment transactions.
less cash
In 2015, the relationship between debit cards and cash payments changed. Since then, the number of cash payments has decreased, while the number of payments made by debit card has increased. Cash is public money issued by the central bank and guaranteed by the government. However, while more payments are now made with non-cash money deposited into the accounts of private banks, less payments are made with public money coming from the central bank.
This means that not only central banks but also Europe will lose control over payment transactions. Because those making the payments are large foreign players. “Payments are the gas, water and light of our economy. “This shouldn’t just depend on private foreign companies,” says Van Dijk, referring to the monopoly of American Mastercard and Visa, as well as the increasing interest of technology companies such as Facebook, Apple and other Google in their payment processing. users.
It is one problem that listed companies control payment transactions, but the fact that they are not under European control is another problem. “These companies are doing good things,” Van Dijk admits. “But companies serve their customers and shareholders, not the broader public interest directly.”
There is no lock on the door
Especially changing geopolitical developments in the world, trade restrictions and even wars have led central banks in the European Union to think. According to Van Dijk, Europe needs to ensure that it is autonomous and has control over its own payments. “Our banks use technology from abroad. You may encounter locks on doors that you do not want to lock. Or with discussions about privacy.
Who is waiting for the digital euro? Nieuwsuur asked himself before:
This discussion, especially regarding data protection, is controversial. For example, European national regulators, including the Dutch Data Protection Authority, today called for better protection of privacy in the development of the digital euro.
“Possibilities to track digital euro transactions on the Internet should be kept to a minimum,” they say. Digital euro payments should only be tracked to combat fraud and money laundering.
According to the European Central Bank, data protection is the “number one priority” for the digital euro: “The level of privacy of offline payments with the digital euro is comparable to cash.”
Van Dijk adds that the privacy concerns expressed have now become leading edge. “DNB and ECB have no commercial purpose and have no interest in customer data. For us, data is private and should remain private.”
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
