This currency is part of a package announced by the community Executive in Brussels, which includes new proposals for a legal framework for the digital euro and to safeguard the use of cash. In the spirit of this package, the institution has proposed the digital euro to be, similar to cash, “available together with existing national and international private payment methods.”
“It would work like a digital wallet, people and companies could pay with the digital euro at any time and anywhere within the Euro Zone. Notably, payments would be available both online and offline, or rather, payments could be made device-to-device without an internet connection, in a remote area or an underground car park, while online transactions will offer the same level of privacy as existing digital payment methods,” the European Commission explained.
“Banks and other payment service providers throughout the EU” are planned to “distribute the digital euro to citizens and companies,” with “the basic services of the digital euro will be provided freely to individuals.”
“To promote financial inclusion, people won’t have to own a bank account to be able to open and manage a digital euro account at post offices or at another public entity, like a local government,” the European Commission highlighted, reassuring “the account will be easy to use as well, including for those with deficiency.”
For that, businesses in the whole Euro Zone will be obliged to accept the digital euro, except for very small businesses who can opt-out, given the cost of creating new infrastructure.
Similar to cash, the digital euro will be the responsibility of the ECB, as the proposal announced on Wednesday only establishes the legal framework and essential elements of the digital euro and will have to pass through the European Parliament and Council. It will be up to the ECB to decide if and when to mint the currency, in a project that will demand supplementary technical work from the central bank.
A legal course was also proposed for euro coins and notes, in order to “safeguard the continued general acceptance of cash in the Euro Zone and also secure that people have enough access to cash,” permitting each citizen to choose “their payment method freely.”
For this, Brussels has asked its member states to assure the acceptance of coins and notes, requesting reports about the situation and measures to solve the problems identified. “The Commission could intervene to specify measures, if necessary,” the institution added.
Adopted by 20 member states of the EU, the euro has been in circulation for 21 years and is the second most used currency for international transactions globally.