FAQ
Donald Trump plans to make the world “crypto center” in the world – and virtual currencies have reached records. The Europeans are driving their plans for a digital euro. What about the project?
What is the digital euro?
The digital euro, also called E-Euro or D €, is a project decided by the European Central Bank (ECB) in July 2021 for the possible introduction of a digital central bank money. It should offer a free payment option that should work both online and offline. He should not replace cash, but should complement as a digital alternative with cash properties.
The e-euro should be available to consumers in an electronic wallet (“wallet”). Behind it would be a separate central bank account, but which is managed by consumers' commercial banks. An individual stop limit of up to 3,000 euros is discussed.
When should he come?
According to the previous statements by the ECB and the EU Commission, the digital euro will come. A final decision is still pending. After a two -year examination phase in November 2023, the ECB started a two -year preparatory phase with numerous coordination processes.
“The ECB council will only decide on the possible issue of a digital euro after the relevant legal provisions have been passed,” says the central bank. A final decision can be expected at the earliest in the first half of 2026 and an introduction at the earliest in 2027 or 2028.
What is the difference to the classic cashless paying?
In electronic payment transactions, i.e. for transfers and payments with the checking card, euro amounts will also be transferred in digital form. So where is the difference?
The digital euro promises even more security than the established payment systems, since in the event of a crisis, it would not be affected by an imbalance of the commercial bank or a private payment service provider. The ECB also emphasizes that the EURO would offer more privacy because no personal data is transmitted in the transactions. His anonymity is comparable to that of cash.
If credit were transferred from one to another central bank account, this would also promise cost advantages over the previous payment models that include a service provider as the third party.
What is the difference to Cryptocurrencies?
A significant difference to cryptocurrencies such as Bitcoin or Ethereum is that the digital euro The ECB's creation of money arises, i.e. remains under the monetary control of the central bank. With the control of the money supply, it tries in particular to secure the stability of the currency.
For critics of the currency system, this is the reason to rely on cryptocurrencies that largely escape the influence of the central banks.
However, it is particularly important for consumers that European digital currency as well as cash and classic book money would be legal means of payment. The trade would usually have to assume the digital euro, whether at the cash register or online. There is no such obligation to accept cryptocurrencies.
Why do the EU and ECB want the digital euro?
In addition to the advantages for consumers discussed, the EU institutions have fundamental goals with the digital euro. Above all, he should secure sovereignty in European payments: not only cryptocurrencies, but also the planned virtual currencies of states such as Great Britain, China and the United States threaten the role of the euro as a dominant means of payment.
In addition, a payment system with Euro could form a counterweight to the dominant American payment service providers such as Visa, Mastercard, Google Pay, ApplePay and PayPal.
“The digital euro would promote resilience, competitiveness and innovation in European payment transactions,” says the ECB. “He would ensure that there is a Europe -wide payment solution for the euro area with a European order framework.”
But money policy design options are also discussed. Since the Euros are led to separate accounts, other key interest rates could be set for them than for cash and book money. In extreme cases, it would be conceivable, for example, that consumption could be powered with penalty interest rates and the economy could be boosted.
How do private banks stand for digital euros?
While the private credit industry welcomes a European e-currency, it also has several problems with it. The part of the money that customers keep in digital currency is expected to be missing as deposits and thus for their classic lending business. Therefore and out of worry about money laundering is discussed for upper limits for the digital wallet.
In addition, the digital euro represents its own payment system with which the ECB would compete directly with banks and private payment providers. Here, too, a voting process runs in which the final distribution of roles has not yet been found.