Digital euro: what is planned and what should it bring compared to cash?

Created: 02/11/2022Updated: 02/11/2022 10:29 am

By: Larissa Strohbusch

The Germans cling to their cash.

© Monika Skolimowska/dpa

The European Central Bank is working on a concept - in a few years it wants to introduce the digital euro.

• The e-euro could later digitize cash.

• CBDC is different from cryptocurrencies or online banking.

• The ECB is working on a concept - in a few years it wants to introduce the digital euro.

The Germans cling to their cash.

But with the ever-increasing online trade,

has become increasingly important.

Since the Corona crisis, more and more people have given up coins and notes.

Cash is

- in the distant future it should also be available digitally.

How does it work?

The digital euro is as secure as cash

Hardly anyone stashes their money under their mattress anymore - and no means of payment is as stable and secure as cash.

In order to bring it up to modern standards, the European Central Bank decided in July 2021 to develop a concept for the e-euro.

This

money is then no longer in the wallet, but in a

.

It could be loaded onto a cell phone as an app.

There, the e-euro has the same properties as real coins and bills: every retailer must accept it and it is secured by the European Central Bank.

This means that it

.

In contrast to classic cash, digital money cannot be stolen so easily.

Also read: Bitcoin as “new gold”?

How cryptocurrency works and which investment means less risk for you

E-Euro: The difference to cryptocurrency and online banking

Even if the principle of the digital euro sounds very familiar: it differs significantly from previous online banking, but also from cryptocurrencies.

• Online banking

  and

  card payments

  do

  not constitute a direct transfer of money

  from one person to another. It is simply a permission for the bank to transfer money to someone.

  Therefore, it usually takes a few days for the payment to be processed.

  The e-euro is basically detached from the banks and

  works in real time

  .

  This also means that it is interest-free and does

  not cost negative interest

  .

  It's also safe if a bank goes bust.

• In contrast to

  cryptocurrencies

  such as bitcoin, however, the e-euro is

  controlled by the European Central Bank

  .

  This makes it just as safe as real cash.

Also interesting:

Digital Euro: Introduction planned in three years

The framework conditions are still unclear.

The European Central Bank still faces a number of questions and challenges before it can launch the digital euro.

The biggest sticking point: How can

?

Many users fear that they can no longer

.

At the same time, it is important for the authorities to be able to

, for example to uncover money laundering.

In addition, the digital wallet should be capped.

In the previous concept, there is talk of an upper limit of 3,000 euros.

What happens if a citizen receives extra money?

Also the

has not yet been decided - the payment system Target Instant Payment Settlement (TIPS) is available, but also blockchain, which is used for cryptocurrencies.

All of these questions must be clarified in a timely manner – because

at the earliest .