The Digital Euro, The Official Crypto Of Europe, Is Coming
✍️ 28 September, 2022 - 17:55 👤 Editor: Jakub Motyka
- The Central Bank of Europe is working on its own digital currency, the Digital Euro.
- For now, the currency is intended only as a tool for large transactions.
- However, it is expected to help modernize the payment system, making it available to all users.
Fabio Panetta, part of the executive board of the Central Bank of Europe, has commented that the Euro Digital could be a reality. According to his statements, the bank has considered using this type of asset, the Digital Euro, for wholesale sales, special payments and securities settlements in Europe. Right now, the Central Bank is working with external companies to create the user interface that allows the correct use of this digital currency.
Contrary to what many may believe and according to Panetta, digital currencies have been used for years. This has often caused confusion among users, especially when it comes to their wholesale use. He noted that " Wholesale CBDCs have been part of the market for decades. Thanks to these, there have been efficient digital infrastructures for the settlement of transactions between banks in Central Bank money."
What Is The Digital Euro Project About?
Digitization has transformed the economy, causing the world's big banks to look for new payment options. According to Panetta, the bank is actively seeking to modernize the payment structures behind the financial system. In other words, with this change they hope to adapt to the payment networks that large companies currently use to carry out their transactions.
On the other hand, the bank has observed how stablecoins could represent a risk for the institution's role in payments. In this regard, they have commented that, not only being backed by the bank makes it more involved, it also makes the risk of its fall zero. In this way, the bank itself can negotiate its resources with private entities, thus avoiding putting its own banking sovereignty at risk.
The Digital Euro Will Inevitably Hit The Market
The entire European region has been working on this CBDC for 18 months, even commenting that it will be necessary to promote cryptocurrencies. For now, a bill in this regard is expected to arrive in early 2023. From then on, the Central Bank will begin its testing phase, working hand in hand on the infrastructure of this asset.
The transition and tests will be carried out with private companies, which will work on prototypes that allow “to see how well this technology is integrated”. Each will be implemented in 2023; however, it is not expected that they will be used in the later phases of the project, their objective being to verify how this technology is coupled to the existing one.
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