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- The European Commission has proposed two bills to support the use of cash and a framework for a digital euro.
- Digital euro payments will complement the physical euro and will be transacted online and offline.
The European Commission has a legislative plan to launch a digital euro payment system fueled by the widespread acceptance of digital currencies. Digital coins will not replace physical fiat currency. Instead, it will ensure that European Union citizens and businesses have continuous access and can pay online and offline.
The commission announced that it recognizes that physical money is still widely used, but it needs to keep up with the growing digital money and payments trend. To keep up with both needs, the Commission proposes a framework to safeguard the use of cash and another to launch the digital euro.
The European Central Bank (ECB) welcomed the proposals and is ready to offer technical input on launching the new digital euro. The ECB President Christine Lagarde noted that it is impossible to ditch the physical euro and said,
The euro is the most tangible symbol of European integration… It is highly valued and trusted by citizens. We look forward to continuing working together with other EU institutions towards a digital euro to ensure our currency is fit for the digital age.
Physical and Digital Euro Have To Coexist
The proposal to safeguard the role of the legal tender of euro cash is meant to ensure that the money is widely accepted and used as a means of payment and is easily accessible to all citizens in the European Union.
The legal framework for creating and adopting digital euros will work as complementary payment methods to euro banknotes and coins. The framework will ensure that all individuals and businesses have additional payment choices in addition to the current private options. Just like the existing digital currencies, the digital euro will allow holders to pay digitally with a cheap, secure, and efficient form of public money within the European Union.
The High-Level Task Force on a digital euro chair and Executive Board member, Fabio Panetta, says,
The legislative proposal is key to ensuring that the digital euro brings value to the people, taking the appreciated features of cash into the digital sphere. The ECB also welcomes the Commission’s proposal on the legal tender status of euro cash, to ensure banknotes remain easily accessible for citizens and businesses and widely accepted throughout the euro area.
Member countries will need to implement the bill To ensure the success of the digital euro. All businesses must accept the digital euro as a means of payment, except the small businesses whose income is lower than the fees needed to adopt the digital coin.
The introduction of the digital euro is the European Central Bank’s (ECB) attempt to adjust to the increasing economic digitalization. Will the introduction of the coin affect the price of Bitcoin?
