The Central European Bank has issued this month a report on the possible issuance of a digital euro -– an electronic form of central bank digital currency (CBDC) accessible to all citizens and firms, introduced alongside cash, it would not replace it.
ECB considers “a digital euro would create synergies with private payment solutions and contribute to a more innovative, competitive and resilient European payment system. By serving as a unifying force in Europe’s digital economies, a digital euro would also be an emblem of the ongoing process of European integration.”
The report states “The Eurosystem is conducting further analysis to fully understand the challenges and benefits that could emerge as a result of the introduction of a digital euro. In particular, we are examining the advantages and weaknesses of specific types of digital euro and how they would meet the needs and expectations of European citizens, businesses and financial intermediaries.”
Before taking the decision of introducing the digital euro, the Eurosystem aims to address a number of important legal considerations related to a digital euro, including the legal basis for issuance, the legal implications of different design features and the applicability of EU legislation to the Eurosystem as the issuer.
It is clear the issuance of a digital euro is both high on the agenda of the ECB and also inevitable as the financial world is changing at rapid pace and the cash is losing importance accelerated also by the Corona-crisis.