Mr. Balz, the ECB Council has decided to start the preparatory phase for the digital euro. What does that mean?
The two-year investigation phase of the European Central Bank and the national central banks in the euro area into the digital euro has been successfully completed. Now a new stage begins. From now on the focus is: What should this digital euro look like – and what kind of rules do we need?
Is this decision a turning point – has the decision for the digital euro become irreversible?
No, in my opinion it is another step in a major project. The Governing Council of the ECB has not yet decided on the introduction of the digital euro. This is only possible once the legislators in Brussels, i.e. the European Council and the European Parliament, have provided a legal framework.
What will now change with this decision for the practical work on the planned new digital currency?
There is a new push. Many important details are still open, especially regarding the technical issues and the legal framework. It also needs to be clarified: How do we want to provide information about the project? This is a very important part of the project. When euro cash was introduced more than 20 years ago, there was also a large-scale communication initiative by the ECB and the national central banks. We also need to take a closer look at possible risks in studies. For example, with the question of how we can specifically ensure that the exchange of bank deposits into digital euros does not affect financial stability. There is discussion about holding limits, i.e. upper limits for balances in digital euros. ECB Executive Board member Fabio Panetta gave an example of an upper limit of 3,000 euros. But nothing has been decided yet.
How can citizens actually imagine the digital euro? Tell us a few details.
As it stands at the moment, there will be a wallet, i.e. a digital wallet. This is an app on the smartphone in which citizens can store their digital euros. With the wallet you can pay online or small amounts offline. This could happen, for example, using NFC technology, as with contactless card payments. This could also be done directly from smartphone to smartphone. For people without a smartphone, there may be an alternative, such as a chip card.
When will we be able to pay with the new currency? Nothing will happen by January 2026, as ECB President Christine Lagarde originally suggested, right?
No. Now it is the turn of the legislators in Brussels. The European Parliament and the European Council must decide on the introduction of the digital euro. In some cases, decisions from national parliaments will probably also be necessary. From today’s perspective, it is realistic that it will take a few more years before we can pay with the digital euro
Why is this taking so long?
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