The global economic context in which we live today is deeply marked by increasingly marked economic tensions and apparently this is leading the European Union to accelerate on the creation of thedigital euro: a new form of Electronic currency issued by the ECB (European Central Bank) equivalent toeuro cash. With what goal? Strengthen the monetary sovereignty ofEurozonereduce dependence on international payment systems related to the dollar and strategicly respond to the duties policy inaugurated by Donald Trump in his second term to the presidency of the USA.
The digital euro will have the same value and the same function foreuro cashwithout volatility, respectful of privacy and easily also usable offline. It is neither a cryptocurrency nor a surveillance tool, but a concrete step towards a fully European currency, developed on an internal technological infrastructure, designed to be sustainable and accessible. The project, which started in 2023 and then slowed down, found new momentum in the light of recent geopolitical dynamics. Its importance goes beyond the financial technique: it is part of the EU response to a world where economic rules are changing quickly.
What is not the digital euro
To fully understand the digital euro, you must first understand What is not. It is not a cryptocurrency, like Bitcoin or Ethereumwhich are based on decentralized technologies and have a highly unstable value. It is not even a tool to control citizens or to combat tax evasion through absolute traceability. On the contrary, it will be one form of electronic money with the same characteristics as the physical euro. And, contrary to what some think, the digital euro will not replace coins and banknotes but, much more simply, will be supported by these more “traditional” payment systems.
The digital euro will be issued by the ECB, will have full legal course and will be used by all residents in the Eurozone through smartphones, magnetic papers or other compatible devices. And for offline payments? There will be no problem: thanks to technology NFC (Near Field Communication), the digital euro will allow transactions even without internet connection, guaranteeing a usability completely similar to that of cash.
Because we are talking about digital euro again and how it will work
The reason for this push towards digital has a lot to do with the recent geopolitical scenarios. The Trump administration, already in the past, has questioned the role of the dollar as a global reference currency, considering it an obstacle for American exports due to its high value. A strategy that, in concrete terms, has led to new commercial barriers and an “economic war” climate. Faced with this scenario, Brussels understood that European dependence on US payment systems – such as Visa and Mastercard – represents a non -negligible vulnerability. Currently, 2/3 of digital transactions go from dollar circuits. That’s why you want to develop an entirely European system, capable of guarantee autonomy and safety in payments. In this regard Piero CipolloneA member of the ECB Executive Committee, reported:
The excessive dependence on non -European operators compromises our resilience and our monetary sovereignty. It also makes the urgent need for a digital euro evident. If we do not act, not only will we expose ourselves to significant risks, but we will also miss a great opportunity.
Cipollone also added:
The data show that household cards are losing market shares throughout Europe, while international ones apply high commissions to European banks and traders. At the same time, the growing popularity of digital portfolios such as Paypal or Apple Pay exposes European banks to further commissions and data deceased. Recent measures adopted by the new US administration to promote cryptors and stablecoin based on the dollar arouse fears for financial stability and strategic autonomy of Europe. In fact, they could determine not only other losses of commissions and data, but also the transfer of deposits to euros to the United States and the further strengthening of the role of the dollar in transfrontier payments.
The digital euro therefore fits into a complex project aimed at strengthen the strategic independence of Europe on the economic-financial level. Its infrastructure will be developed and managed internally, but will also be open to private subjects, provided that they respect certain technological and environmental standards. Unlike traditional cryptocurrencies, often accused of consuming huge quantities of energy, the digital euro will be designed to be efficient from an energy point of view. In addition, will be subject to rules of use similar to cash: There will be limits to the demented quantity and, if exceeded, the excess will be automatically transferred to a connected bank account, otherwise the transaction will be blocked.
The next steps to the digital euro
On the legislative level, the digital euro is currently at the center of the debate between the European Council and Parliament. The institutions are working for define a light and solid regulatory framework May the rights of citizens protect, in particular privacy. In all official communications, the ECB has always reiterated that it will not be able to directly identify users. Only some limited and anonymized data will be accessible to financial intermediaries, in line with the European data protection regulation, the famous GDPR (General Data Protection Regulation).
After an in -depth exploratory phase started in theOctober 2021during which the European Central Bank analyzed the possible methods of operating and distribution of the digital euro, the project entered a new phase. The October 18, 2023 The ECB board of directors gave the green light to the so -called “Preparation phase”from the duration of 2 yearswhich constitutes a crucial step towards its possible realization.
During this period, attention will be paid to the definition of the necessary technical and operational framework: the suppliers will be selected for development of the digital platformthe Operation rules and they will take place in -depth tests. All this to ensure that the digital euro respects the key principles of the Eurosystem and that, at the same time, respond to the practical needs of users in terms of ease of use, protection of privacy, economic accessibility and environmental sustainability. Only at the end of this phase, on the basis of the results obtained, will the ECB board of the ECB decide whether to proceed with the actual issue of the digital euro and in what ways.
