Benzinga - The European Commission has unveiled an ambitious vision that aims to lay the groundwork for the creation of a digital form of the euro.
Goal Of Modernizing Euro Currency
The initiative seeks to modernize the currency, ensuring that citizens and businesses throughout the eurozone can continue to have access to both physical and digital euros.
The twin proposals released by the Commission encompass legislative measures to secure the role of cash as legal tender and establish the legal framework for a potential digital euro, which the European Central Bank (ECB) might issue in the future as a complement to physical currency.
Highlighting the significance of the euro, the Commission stated that it regards the currency as a symbol of Europe’s unity and strength.
Quoting a survey, the Commission stated that while 60% of respondents wish to retain the option to use cash, an increasingly larger segment of the population is opting for digital payments through cards and banking apps.
Details Of The Commission's Plan
The European Commission plans to address these changes through its dual proposals.
The first legislative proposal is aimed at safeguarding the role of cash as legal tender and ensuring its widespread acceptance as a viable means of payment.
Furthermore, it seeks to ensure that cash remains easily accessible, especially in light of the closures of ATMs and bank branches in some areas.
Member States will be tasked with ensuring widespread acceptance of cash payments and sufficient access to cash. They will also be required to closely monitor the situation and implement measures to address any identified issues.
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The second legislative initiative centers around the introduction of the digital euro, which will serve as a digital wallet, providing consumers with a European-wide payment alternative. This will not only expand consumer options, but also strengthen the global position of the euro.
The digital euro will be available for both online and offline transactions, ensuring high levels of data privacy and protection for users, particularly during offline transactions which would disclose less personal data compared to card payments.
Inclusion Is Key To The Plan
The European Commission stated that its proposals are designed to ensure financial inclusion, particularly for vulnerable groups such as the elderly, who tend to rely more on cash payments.
The digital euro will also be accessible even to those without a bank account.
The proposals are now set to be reviewed and potentially adopted by the European Parliament and Council. Following this, the ECB will have the authority to decide if and when to issue the digital euro, subject to further technical developments.
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