While the Covid-19 pandemic has accelerated the rise of contactless payments, and private virtual currencies are gaining ground, the European Central Bank (ECB) is continuing its work on the creation of a digital euro. It launched a wide-ranging public consultation on this subject on October 12, 2020.
A digital euro accessible to all
The digital euro would be accessible to individuals and businesses alike, and would be used for everyday payments. For the European Central Bank, the aim is both to make everyday life easier for citizens and to ensure that "the currency issued by central banks continues to play its role as the anchor of the monetary system", explains the Banque de France in a November 27 press release.
Facebook's Libra virtual currency project accelerated the ECB's thinking process, as did the decline in cash payments due in part to health measures linked to the Covid-19 pandemic. Thus, in its report on a digital euro, the ECB notes the "ever-increasing digitalization of the economy", with "the rise of electronic payments within the euro zone and the decline in the use of cash", which could necessitate "making central bank money available in a digital universe, and therefore in digital form".
A public consultation to gather expectations about the digital euro
The public consultation initiated by the ECB aims to gather the general public's expectations about the digital euro and how it can be accessed or used, as well as "opinions on its possible benefits, challenges and risks". " All interested parties, both public and private, are invited to express their views on the subject by January 12, 2021.
The responses to this consultation will enable the ECB, in spring 2021, to take "the decision whether or not to continue the investigative work begun in 2020 on the digital euro, based on a careful analysis of the motivations, consequences and prerequisites for its possible introduction".
In particular, the ECB will be looking at how the digital euro could "improve the ease of use, security and inclusiveness of payment means", all without posing a risk to "financial stability, the equilibrium of the financial system, the proper conduct of monetary policy, the operational security of payment systems and the protection of users".
The Banque de France and other central banks in the euro zone are in charge of gathering the opinions of the general public, under the supervision of the European Central Bank.