Since the launch of the Euro in 2002, there had not been such a large monetary project.
The European Central Bank has been piloting a new project since Wednesday: the digital euro.
A dematerialized currency, which will no longer have a physical existence.
The ECB intends to respond to the increase in online shopping and contactless payments.
It is a huge new project that is opening in Europe. The new digital euro officially started work on Wednesday. The kick-off was given in Frankfurt by the European Central Bank.
Yes, the ECB has indeed just given the green light to a pilot project that will last two years. If the tests of this exploratory phase are conclusive, then the real kick-off will be given and the new digital euro should be operational by 2025, or at the latest 2026. In reality, there is not much suspense, everything simply because Europe has no choice. Two emergencies push her to go in this direction. The first is the dematerialization of money that has started all over the world. We have seen it with Bitcoin or Facebook's Libra project. However, States cannot leave in the hands of private interests an instrument of sovereignty as vital as a currency. Second imperative reason to move forward: the increase in contactless payments during the Covid.Consumers have taken a liking to it and we will not be able to go back.
Precisely, what will the digital euro change in our daily lives?
So the first obvious manifestation is that this new currency will no longer have a physical existence. Thanks to it, you can pay for everything online via your smartphone or computer with specific applications. Offline payment will also be possible for amounts less than 100 euros. Another hypothesis, that of making the change programmable, that is to say that the payment is triggered only if certain conditions are met. We can also, why not, target this currency on certain types of purchases such as food products. In short, the field of possibilities is immense. For now, the ECB ensures that the digital euro will coexist with the physical euro, contrary to what we hear here or there. There will therefore always be cash, but much less than today.
And what will be the role of banks in this new landscape?
Well that's the whole difficulty of this project.
There is no question of abruptly dismantling a banking system that employs a lot of people, so we have to reinvent a whole money management architecture with an IT tool that ensures the circulation of the virtual euro between all the players.
It is this project that is starting these days with one requirement: to ensure that the new currency is 100% safe.
Maintaining the confidence of European citizens in the euro is obviously an absolute imperative.