Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at the progression of the Digital Euro.
Digital Euro
The European Central Bank (ECB) official Piero Cipollone has noted that the Digital Euro is at the “midpoint of the preparation phase.” He has outlined the benefits of the digital euro, while stressing how it would bolster Europe’s financial sovereignty and resilience. While addressing the committee hearing on Economic and Monetary Affairs, Cipollone stated that the digital form of euro’s “tangible benefits” would be applicable to all stakeholders. He noted:
“It would empower Europe to independently develop and manage digital payment solutions.”
The digital euro would represent a central bank digital currency and would be considered a Central Bank Digital Currency (CBDC), offering an efficient and inclusive payment solution. Cipollone noted that the CBDC project, which began back in 2021, has reached its “midpoint of the preparation phase” and he hinted there would be roughly one more year before the project is fully ready to launch. The ECB President Christine Lagarde forecasted the CBDC to launch before her term ends in 2027 and so far it seems to be on track. She also stated that it should be “fit for the future.” The project will focus on developing a methodology for determining the maximum holding limit for digital euro per person, Cipollone added. He stated:
“The holding limits are important to ensure financial stability and prevent large-scale transfers from bank deposits to digital euro, especially during crises.”
It was also made clear that the bank is working on completing a digital euro rulebook. This would provide a “clear set of rules and standards to ensure a consistent user experience across the euro area.”
The ECB are also working on selecting potential providers to develop a CBDC infrastructure which would undergo strict technical runs to check privacy and offline functionality. It was stated:
“Consumers could use a digital euro for all payments, everywhere in the euro area, also when shopping online.”
They could also make or receive payments via digital euro and this would be free of charge and accessible to everyone across the eurozone. It would also allow for user privacy and data protection, according to Cipollone.
Merchants would be able to use the digital form of central bank-issued cash to cut the costs involved with the use of international card schemes. Cipollone noted:
“A digital euro would include safeguards for merchants by capping the fees they pay to banks for processing payments.”
Finally, Cipollone stated that a digital euro would open up a new source of revenue for banks. The banks would be responsible for distributing the CBDC, thus serving as a point of contact for users.
As someone who resides within the eurozone, the biggest questions on everybody's mind will be:
- Is it really required?
- Does privacy and data protection include privacy from government organisations, or third parties associated with the government?
- Are these 'limits' the beginning of a process for the ECB to control and limit peoples personal finances?
- What will this lead to next, and what level of forced implementation will there be throughout the eurozone?
- If its cheaper for a merchant to use this digital euro, will they look to add a cost to those who don't use it?
There are so many questions relating to the implementation of a digital euro, especially one run by the ECB. They will tell us one thing and do another thing altogether. I for one fail to see the need for it, and like many others I oppose a CBDC.
Have a great day.
Peace. CryptoGod-1.
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