Secure, anonymous and free - the digital euro should work just like cash, but the wallet will be in the user's smartphone. German Finance Minister Lars Klingbeil has been calling for the introduction of this payment method since he took office, writes ARD. His main argument is related to European sovereignty from American financial systems, which he believes are no longer reliable enough. "I want more patriotism and European sovereignty", he said at the end of last year.
At that time, he and his fellow finance ministers from other EU countries had already come out with a common position and recommendation for the introduction of the digital currency. Later, the European Parliament also joined in. Negotiations between EU member states, the European Commission and the European Parliament recently began. There are still some details on which there are slight disagreements - for example, the European Parliament wants to introduce additional measures to protect consumers' personal data. However, the negotiators expect to quickly reach a consensus on this issue as well.
Serious skepticism among supporters of cash
In countries where cash is still widely used - such as Austria, Italy and Germany, there is serious skepticism regarding the digital euro. However, German MEP Matthias Ecke notes that the law will oblige merchants to accept cash for the first time, ARD explains. This means that nowhere in the retail network will they have the right to say that they only accept card payments.
Where will the digital wallet be located?
Another reason for discussion was the question of what form the future digital wallet should take. Banks in EU countries opposed the idea of the European Central Bank (ECB) creating its own computer application for the digital euro.
It was later decided that it would simply be integrated into existing online banking applications, and the digital wallet would be linked to each user's account at their bank. If the digital wallet is empty, the user will be able to transfer funds from their personal bank account to it - just like when withdrawing from an ATM.
The banks were particularly keen on one of their central requirements - that users should not be allowed to hold an unlimited amount of funds in their digital wallet. Because this would mean that the funds in question would not be available to private banks for investments or loans, ARD specifies. This will probably be one of the issues that will dominate the discussions in the upcoming negotiations.
Less dependent on the US
For a long time, commercial banks in Germany have opposed the digital euro. They argued that politicians should wait and see whether some alternative methods of financial payments - for example, through the Wero system - will take hold in the country, ARD recalls.
However, MEP Eke counters with the argument that many other EU member states, especially smaller ones, are completely dependent on non-European financial payment systems. "With a public payment system, we will ensure long-term access to this European infrastructure", he specifies. The most important political argument in favor of the digital euro remains that Europe must become more independent, especially from the US. MasterCard, Visa and PayPal currently dominate the payments market.
When will the digital euro be introduced
Private banks have apparently already accepted the fact that politicians and the ECB intend to introduce the digital euro - and as soon as possible. Instead of resisting, they are now calling for its gradual introduction. The online and offline versions of the digital euro should be introduced at different times, argues Kolya Gabriel, a member of the Board of Directors of the German Banking Association. This would save time and money when introducing new security measures related to the digital wallet. Moreover, according to Gabriel, users will not need all the capabilities of the system from the first day the digital currency is launched.
The European Central Bank plans to introduce the digital euro in 2029. The pilot project is scheduled to start in 2027. The deadline is short, commented Gabriel, a representative of the banking association. German Finance Minister Lars Klingbeil, for his part, would prefer the project to start even earlier.
Author: Jean-Marie Magro