The European Central Bank (ECB) is pushing for the adoption of digital euro stressing it will bolster Europe’s competitiveness and strengthen the region’s single market and European sovereignty.
Piero Cipollone, executive committee member of the ECB denounced businesses and Europeans who are incurring huge costs for using “international circuits of cards such as Visa or Mastercard.” Cipollone knows a better solution, according to his submissions during the European Parliament’s Economic Affairs Committee in Brussels.
Digital euro to bring tangible benefits to all stakeholders
Cipollone noted that cash is increasingly becoming less popular as digital payments are emerging and fast becoming dominant. He however warned of the dangers of a potential future in which only Alipay – China’s largest mobile payment platform – would be too big and the only available payment option for Europeans.
As such, there are fears Europeans may become reliant on platforms that are foreign. Yet a home-grown digital payment system may boost Europe’s financial resilience.
“A digital euro would strengthen Europe’s financial sovereignty and resilience. It would empower Europe to independently develop and manage digital payment solutions.”
– Cipollone.
According to the ECB executive, a digital euro will be beneficial to small businesses and merchants who usually struggle to secure better conditions from payment providers, which leaves them at a disadvantage compared to their larger counterparts.
A digital euro will also enhance financial inclusion, according to Cipolloni, as it will be “accessible to everyone across the euro area, via mobile app or physical card, so everyone can choose the technology they are most comfortable with, no matter how old or tech savvy they are.”
Another aspect Cipolloni touched on, that has been of concern is data privacy and protection. With digital euro, Cipolloni revealed the digital asset is also expected to offer “the best possible” data protection offered by the current tech being used by large payment systems.
“From the outset, ensuring user privacy has been a central focus of the digital euro project.”
A digital euro would be a digital form of cash, available to everyone and accepted everywhere in the euro area, says Executive Board member Piero Cipollone. It would bring tangible benefits to all stakeholders – consumers, merchants and banks.
— European Central Bank (@ecb) September 23, 2024
European Central Bank finalizing rulebook
According to the bank, it will be possible to use the digital euro both online and offline. The project to develop a digital euro has been in the works for a couple of years now and the ECB is pushing the initiative arguing that this will benefit everyone in the region.
Giving an update on progress made so far with the project which entered the investigation phase three years back, Cipollone indicated that the ECB is now finalizing the rulebook for the digital euro project in addition to technical aspects.
“We are working closely with all the representatives in the Rulebook Development Group, including consumers, retailers, banks and non-bank associations,” said Cipolloni.
He added that the bank is also in the process of selecting partners to develop a digital euro platform and infrastructure.
The ECB’s governing council is expected to make an announcement about its decision on whether the project will be ready for its next phase next year.
This also comes as a member of the bank’s governing council Fabio Panetta recently took aim at Bitcoin and Ethereum saying the two cryptocurrencies, the largest by market capitalization have no intrinsic value.
