Digital Euro is it a threat to Crypto currency or Not?

The European Central Bank which is guardian of Euro currency will provides a monetary system in two forms :

• Issuing a Banknotes

• Transferring electronics deposits to banks and other financial institutions.

Due to the spread of digitalization to every corner of the world and fast transforming of payment issue. the European Central Bank issue a digital euro that would guarantee its own citizen to maintain free access to simple, universally accepted, safety and trusted means of payments but not means to replace cash rather to compliment it.

The European Central Bank will ensure to all the citizens of Europe that those who adopt the Euro currency will get access to euro banknotes and coins across the 19 European union country.

Christine Lagarde, President of the ECB say :

The Euro belongs to European and we are its guardians, We should be prepared to issue digital euro should the need arise

The digital euro is still under the preparation phase which the European Central Bank and its own partners is working there concept , starting a practical experiment on possible designs, and also discussing with stakeholder and International partners.

Towards the middle of year 2021 will be the possible target date of launch of the project digital euro by ECB which will be followed by Investigation phase after the release of the project.

Investigation phase will cover the investigation on user of the system and process the needs of it.

It would take time to develop a safe, accessible and efficient digital currency so the European Central Bank ensured that the monetary system which is use by the citizens will keep up with there needs.

According to the latest blog of one of the member of Executive Board of the ECB that published on October 2 2020 that the ECB and the other partners will form the basis of a public consultation which will launch on October 12 2020 to hear the opinions and views of the public together with the interest of stakeholders.

Fabio Panetta , Member of the Executive Board of ECB wrote in his blog

"As the guardians and issuers of their currencies, central banks around the world are inevitably asking themselves whether they should issue a digital currency. Should they devise an electronic form of money which is also legal tender, which commands the same degree of trust and which offers all the benefits of money in its traditional form? In the euro area, should we issue a digital euro alongside euro banknotes? We already have digital means of payment, such as electronic transfers. And, of course, we have physical central bank money in the form of cash. What we do not have is a digital currency that is issued by the central bank and that we can all use in daily life. In other words, we do not have a digital equivalent of euro banknotes.

Whether or not we need a digital euro is a fundamental and pressing question, and the ECB and the national central banks of the euro area are considering it together. We are publishing a report today on our assessment of the economic, strategic, technological and societal choices that we face. It will form the basis of a public consultation that we will launch on 12 October to hear the views of the public and interested stakeholders.

European Central Bank claim that digital euro would make the citizens of Euro area to be :

• payments get faster

• payments get easier

• payments will more secure

• It also could support the European economy

• Encouraging the innovation in detail payments.

The ECB together with the other national central bank of Europe continent declare that the use of euro currency are exploring the benefits and risk of the new system so that the money serve Europeans well.

Benefits of Digital Euro

• Help to deal with situations in which people prefer to use digital currency

• preserve the benefits that the fiat money euro provide to its citizens

• Help cushion the impact of extreme events such as natural disaster or pandemics which is when a traditional payments is no longer works.

• Preventing the European Citizens to use foreign digital means of payments that could might undermine the financial stability and monetary sovereignty of Europe.

Basics Requirement For Digital Euro According to the experts of ECB and National central bank of europe

• easy accessibility

• robustness

• safety

• efficiency

• privacy and compliance with the law

Whatever the design and the functioning of a digital euro it would be

1 . an electronic form of central bank money

1. accessible to all citizens and firms

2. digital form of banknotes

Digital Euro is fundamentally different to crypto-assets due to.the fact that any crypto-assets prices in market are volatile because they lack of any intrinsic value and there is no reliable institution backing them unlike the Digital Euro which is originally a fiat money that was digitalized and backed by different central bank.

Source

ec.europa.eu