The digital euro is intended to give every citizen digital access to central bank money, which has so far been available in the form of notes and coins.
(Photo: imago images/Christian Ohde)
Frankfurt, Brussels The EU Commission officially presented its plans for a digital euro on Wednesday. The Commission envisages that this will become legal tender just like cash.
At the same time, the Commission wants to tighten the obligation to accept cash. For example, she wants to use a new legislative proposal to ensure that citizens can continue to pay with cash in all euro countries in the future.
EU Economic Commissioner Paolo Gentiloni put it this way: On the one hand, it is a matter of increasing legal certainty for legal tender and, on the other hand, of expanding the definition to include the digital euro. In the case of cash, there is a basic obligation for retailers to accept it. However, the EU Commission is now trying to define the scope more precisely.
What is behind this is the concern that cash is being used less and less in the euro zone. As a result, this would lead to low acceptance in retail. There are already major differences between the various EU countries. The planned new regulation now requires the member states to “observe the level of cash acceptance and the rejection of cash payments and to report it to the Commission and the ECB,” the EU authority said.
Under certain circumstances, the countries would then have to take measures to ensure a certain level of cash acceptance. The EU Commission can specify the necessary measures if necessary.
Exceptions to the acceptance obligation
There are exceptions to the obligation to accept digital euros. They apply, for example, if retailers – at the cash register or as an online shop – and consumers have clearly agreed on a different method of payment. The Handelsblatt had already reported on the legislative proposal of the EU Commission last week. Very similar rules apply to cash.
The EU Economic Commissioner at the press conference in Brussels to present the plans for the digital euro.
(Photo: AP)
The digital euro is intended to give every citizen digital access to central bank money, which has so far been available in the form of notes and coins. Central bank money is the only means of payment that is 100% fail-safe and is highly valued by citizens in Germany, among other places.
In Germany, for example, almost 40 percent of retail sales were settled with notes and coins, while in many other EU countries the cash ratio is already significantly lower.
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The Commission also explained in more detail what speaks in favor of the digital euro, because without a digital currency, it is feared that private cryptocurrencies would continue to spread in Europe and could then reduce the role of the euro. “We cannot stay behind: 100 central banks are already working on digital central bank money,” emphasized Gentiloni for this reason.
Nevertheless, there are still doubts about the usefulness of a digital central bank currency. “What the exact added value of a digital euro should look like in contrast to existing payment systems has not yet been answered,” said SPD MEP Joachim Schuster. He believes that a comprehensive assessment of the potential is necessary.
Skepticism is also widespread among the population. A recent survey of 5,000 citizens by the opinion research institute Civey showed that 56 percent had a negative view of the plans to introduce a digital euro. 26 percent are positive about it, the rest of the respondents preferred not to give an assessment on this topic.
The Commission wants to leave the implementation of the law to the European Central Bank (ECB). However, the Governing Council, the EU member states and the European Parliament would have to agree first. The Governing Council of the ECB is expected to decide in October whether the central bank will start the next project phase for the digital euro, which would then involve the technical development of the digital euro.
Three years are planned for this. However, the EU Commission pointed out that the final decision to issue a digital euro should not be made before 2028.
Private individuals should have access to the digital euro via commercial banks. In addition, an upper limit for accounts with digital euros is under discussion, which the ECB is to set. Because: If consumers are able to hoard digital euros in any amount, there is a risk that they will switch money from commercial bank accounts to digital euros at a rapid pace as soon as a bank gets into trouble – which is likely to exacerbate the difficulties.
More: The digital euro is to become legal tender