Digieuro would speed up payment transactions and bring independence from other payment service providers, such as Mastercard or Visa.
Bittieuros may come into use as early as 2026. Mauritius images GmbH / Alamy Stock Photo
Today, the European Union is publishing the legal plans that will serve as the basis for a digital currency, the digieuro.
Central banks around the world are planning the introduction of digital currency. Japan, Canada, China and Great Britain are planning the project, among others.
The European Central Bank (ECB) also wants to be involved in this change.
– We cannot be left behind in this, Vice-President of the European Commission Valdis Dombrovskis stated.
Faster payments and more independence
Digital currency would enable faster payments when the use of cash money is decreasing.
According to credit rating agency Moody’s, the change could also reduce Europe’s dependence on payment companies outside the region, such as the US Mastercard and Vista.
– This would support faster and more competitive markets. The currency would also have a high level of privacy, but would not be programmable. Meaning that its use is limited to certain products or services, the bill states.
For privacy, this would mean that, for example, bank scams would become considerably more difficult.
According to the European Central Bank it is not a cryptocurrency like bitcoin, but would only function as a means of payment. Digital euros could also be exchanged back into cash if desired.
Final decision in October
The decision to implement the bill requires approval from the EU member states and the European Parliament.
European banks are worried about the change, that people would transfer their account deposits to digital euros. This would weaken banks’ funding.
As a solution to this, the draft law proposes to give the ECB the possibility to limit how much wealth can be deposited in the digital currency. The maximum amount has already been agreed to be 3,000–4,000 euros.
However, the digital currency is not going to replace cash, at least right away, but would work with it at the same time as a means of payment. Digieuro would be available for those living in the euro area and those visiting it.
The ECB is supposed to decide on the further development of the digital currency in October, and this would be implemented in 2026 at the earliest.
About that reported Reuters.