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1st Draft of a Digital Euro

The public consultation on the creation of a digital euro, launched on October 12, 2020 by the ECB, has just concluded; this first phase of the questionnaire gives way to a detailed analysis of the responses obtained.

In October 2020, boosted by the resounding announcement of a private digital currency project by one of the GAFAs, the ECB then positioned itself on the creation of its own digital euro

« The euro belongs to the Europeans and our mission is to be its guardian. Europeans are turning more and more to digital in their consumption, savings and investment patterns. Our role is to preserve confidence in the currency. This means ensuring that the euro is fit for the digital age. We must be ready to issue a digital euro if it becomes necessary. »

Christine Lagarde – President of the European Central Bank (ECB)

Yet if we are to believe Christine Lagarde’s recent comments during Reuters’ virtual event this week, the digital euro would be one of Europe’s plans for the next 5 years. A slowing down of this project that Europe wanted to carry out in consultation with the public.

A total of 8,221 citizens, businesses and professional organizations responded to this online questionnaire. A record for a public consultation by the ECB.

« The high number of responses to our survey shows the great interest of Europe’s citizens and firms in shaping the vision of a digital euro. The opinions of citizens, businesses and all stakeholders are of utmost importance for us as we assess which use cases a digital euro might best serve. »

BCE – PRESS RELEASE

The full analysis of this public consultation will be published in spring 2021. a comprehensive analysis of the public consultation in the spring, which will serve as an important input for the ECB’s Governing Council when deciding whether to launch a digital euro project.

Pending a first analysis of the raw data indicates that the confidentiality of payments figures in first place of the characteristics required for a digital euro potential (41%), security (17%) and pan-European reach (10%).

The Eurosystem task force, bringing together experts from the ECB and 19 national central banks of the euro area, identified possible scenarios that would require the issuance of a digital euro :

  • an increased demand for electronic payments in the euro area that would require a European risk-free digital means of payment ;
  • a significant decline in the use of cash as a means of payment in the euro area ;
  • the launch of global private means of payment that might raise regulatory concerns and pose risks for financial stability and consumer protection ;
  • and a broad take-up of central bank digital currencies issued by other central banks ;

A digital euro would be an electronic form of central bank money accessible to all citizens and firms – like banknotes, but in a digital form – to make their daily payments in a fast, easy and secure way. It would complement cash, not replace it. The Eurosystem will continue to issue cash in any case

« A digital euro would combine the efficiency of a digital payment instrument with the safety of central bank money. The protection of privacy would be a key priority, so that the digital euro can help maintain trust in payments in the digital age. »

BCE – press release

This first feedback from the ECB to date does not give any visibility either on the GDPR, on the protocol that would host the digital euro, or on more environmental considerations linked to the creation of a currency.

« The constant production of new cash, made necessary by the wear and tear of coins and banknotes as well as by inflation, has a significant impact on the environment, which the various central banks are starting to take into account».

BDF, 2009 ; Wettstein et Lieb, 2000 ; Sveriges Riksbank, 2010

Many outstanding questions therefore to which the ECB will have to answer.

Article: Joana Foglia – Source: BCE

Post Author: Wealth Monaco