The European Central Bank published a report which sheds more light on the applicability of the digital euro in transactional use cases.
The European Central Bank (ECB) is reportedly exploring possible ways it can introduce a digital euro as a payment option. The central bank recently published a report showing its findings on prior research into the applicability of the digital euro. According to the report, citizens were more likely to favor a central bank digital currency (CBDC) accepted in physical and online stores. In addition, potential users also showed a strong preference for instant and contactless person-to-person payments.
Fabio Panetta, an executive board member of the European Central Bank, recently discussed the digital euro project. In an address to the European Parliament in Brussels on Wednesday Panetta emphasized user optics. In his opinion, analyzing the practicability of the CBDC in real use cases was more important than just the mere ‘political need’ for it. As the ECB executive put it:
“… we are getting a clearer picture of what citizens and merchants want, so we can fine tune all the design features of a digital euro before any potential issuance. Legislators have a key role to play …”
The ECB also posted keynotes from Panetta’s speech on its official Twitter account. The post featured tie-ins into the ECB executive’s speech as well as the actual published report.
Further Insight into the European Central Bank Digital Euro Project
The published ECB report is based on the responses of focus groups and online communities across Europe. Safety and security were a point of major concern for respondents who wanted a CBDC that is relatively foolproof against fraud and hacking. They were also of the opinion that a digital euro should not undermine cash. Furthermore, the focus group yearned for a one-stop solution payment initiative that conveniently incorporated all current payment options. Speaking directly to this, Panetta asserted:
“We want the digital euro to add value for end users and merit their confidence. A digital euro could enhance European payments by providing a universally accepted and secure solution that facilitates contactless and instant payments.”
Panetta also opined that the CBDC had to see unequivocal acceptance by all merchants and retailers across the board. This suggested adoption trend ensures that the digital euro enjoys the type of initial success the fiat euro experienced two decades ago. According to Panetta, “the introduction of euro banknotes made it possible for us to pay with physical euros anywhere in the euro area, so it is no surprise that people expect to be able to use the digital complement to banknotes wherever they can pay digitally or online.”
The European Central Bank has been mulling the idea of a digital euro issuance for a while now. The governing bank’s inclination to develop a digital version of its fiat currency comes amid growing interest in CBDCs worldwide. A prime case study of this trend occurred last month. The People’s Bank of China (PBoC) made its digital yuan available for use at the Beijing Winter Olympics in February.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
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