The success of Bitcoin and Co. is increasing interest in a digital euro.
It will be years before Europe's consumers can use it - despite preparations.
Frankfurt / Main - Europe's monetary authorities are taking their multi-year work on a digital euro to the next level: The European Central Bank (ECB) decided on Wednesday to enter into a 24-month investigation phase for such a digital currency, which would deal with aspects such as technology and data protection should go.
It has not yet been decided whether a digital version of the European common currency will be added to the notes and coins.
"We will (...) only decide at a later point in time whether or not a digital euro will be introduced," said ECB board member Fabio Panetta.
"In any case, a digital euro would only complement cash and not replace it."
It will therefore take some time until the possible introduction of a digital euro, as Panetta affirmed: After the two-year investigation phase, the ECB wants to be ready to start developing a digital euro.
“This could take around three years.” Panetta had already said in May that the introduction of a digital euro could not be expected until 2026 at the earliest.
A digital euro could allow private individuals to deposit money directly with the central bank. This option is usually only available to commercial lenders such as banks, governments and other central banks. Theoretically, it would be conceivable for citizens to open an account with the ECB. Experts consider it more likely, however, that electronic purses, so-called wallets, would be offered by commercial banks or other financial service providers in connection with a conventional account. For the time being, the central bank itself is largely leaving all options open technically and conceptually.
Federal Finance Minister Olaf Scholz (SPD) called the course set by the ECB “groundbreaking”: “We have to make the euro fit for the digital age, this is the only way we can maintain and strengthen our monetary sovereignty.
The Member States would have to be involved in further work. "
The efforts of the euro central banks are fueled by the increasing use of digital payment options.
Even before the Corona crisis, the trend towards paying without notes and coins had stabilized in Germany and in the euro area.
In addition, the ECB wants to provide an answer to the steep rise of cryptocurrencies such as Bitcoin and Ether.
The big difference: In contrast, a digital euro would be under the supervision of a central bank, which ensures the stability of the currency.
“Private solutions for digital and online payments offer important advantages such as convenience, speed and efficiency. However, they also come with risks in terms of privacy, security and accessibility, ”said Panetta. Other central banks around the world are also dealing with digital central bank money. China, for example, is much further ahead than the Eurosystem.
The ECB announced at the beginning of October that it was pushing ahead with its work on a digital euro. Citizens as well as experts from science and the financial sector were able to comment on the pros and cons. Now it is time to "shift up a gear and start the project of the digital euro", said ECB President Christine Lagarde after the decision of the ECB Council on Wednesday. "With our work we want to ensure that citizens and companies have access to the safest form of money, central bank money, even in the digital age."
The Deutsche Kreditwirtschaft (DK), the umbrella organization of the five major banking associations in Germany, recently set out their ideas for a digital euro in a policy paper. According to this, digital money should have three main forms: a digital euro for everyday use by citizens as a supplement to cash, a special form for the capital markets and interbank transactions, and so-called deposit tokens for use in industry.
"A digital euro is essential for the competitiveness of Europe and its companies in an increasingly digitalized business world," said Joachim Schmalzl, board member of the German Savings Banks and Giro Association (DSGV), who is currently DK leader.
It is important, however, that the ECB include all three options mentioned by the banking industry.
Based on a survey of 652 companies in Germany, the digital association Bitkom reported that there was great approval for a digital euro: a good three quarters (78 percent) of the companies surveyed with 50 or more employees wanted the ECB to introduce a digital euro.
Only one in five (20 percent) think nothing of such plans.
The proponents therefore promise a new technical possibility for the seamless processing of payment transactions.
Technically, digital currencies can function, for example, on the basis of a so-called blockchain, i.e. a chain of data blocks that expands with each transaction. According to the BVI fund association, market participants would be able to carry out financial transactions “faster and more securely if both financial instruments and the euro were blockchain-enabled”. dpa