Frankfurt (AFP)

Will every European ever have a digital euro account at the European Central Bank (ECB)?

The Frankfurt institute should give the green light to the largest project since the introduction of the euro on Wednesday, starting with an evaluation phase and then tests.

If all goes well, the digital euro could see the light of day around 2025 and add to the means of payment for citizens.

- Why a digital euro?

The ECB wants to support the explosion of dematerialized payments, which has amplified with the Covid-19 pandemic.

Even in Germany, a country where cash has long been king, in 2020 consumers spent more money on cards for the first time.

The ECB fears that this craze will benefit private virtual currencies or foreign currencies.

In 2019, Facebook's project to create a virtual currency, now called the diem, created an electric shock.

But several countries, such as China or the United States, are also working on issuing their own cryptocurrency.

Beijing has already been testing e-yuan payment via mobile phone since March, with the ambition of making it an international benchmark currency, competing with the dollar, according to experts.

"A sovereign Europe needs innovative and competitive payment solutions," German Finance Minister Olaf Scholz recently urged.

- What interest for consumers?

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The digital euro will allow households and businesses to deposit this currency directly into an account opened at the central bank, access to which has so far been reserved for commercial banks.

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This money will be protected against any risk of loss, a strong argument at a time when the European deposit guarantee project is deadlocked.

The ECB also promises quick, easy and secure use for paying for purchases at a supermarket checkout, online via a smartphone app for example, also offline using payment cards similar to the card. of debt.

The stake will be to "persuade consumers to switch to a new means of payment which hardly differs from those existing in terms of treatment and range of services", estimates Heike Mai, economist at Deutsche Bank.

"The payment habits of consumers will not change from the launch of a digital euro," already predicts Guido Zimmermann, analyst at LBBW.

But that could change in a few years, when the number and forms of digital currencies increase, he said.

For example, users could make transfers or payments between Europeans, while limiting bank charges, with their digital euro "wallet", available 24/7.

- What is the difference with a cryptocurrency?

A cryptocurrency like bitcoin is not an official payment method.

Its unit of account is not defined by the State but is issued by private organizations, or controlled by the participants of a computer network.

The issuance of new bitcoins is regulated by an algorithm, not by a monetary policy committee.

Central banks want to bring stability to the highly speculative world of digital currencies, whose price is like a roller coaster.

"A euro today must be worth a euro tomorrow, in cash or in digital," insists the ECB.

- What risks?

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The ECB must take into account the concerns of Europeans about the risks to the protection of their privacy, the top priority expressed in the recent consultation carried out by the institute.

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Data should be better protected with the digital euro than with equivalents offered by private providers, assures the ECB.

But the path is narrow because there is no question of offering the same guarantee of anonymity as cash, for obvious reasons of the fight against tax fraud and the financing of illicit activities.

The main risk is the flight of savers to this new form of currency, which avoids the costs of a traditional deposit account, which would weaken banks in the euro zone.

The ECB is therefore considering taxing deposits in central bank money above a threshold, for example 3,000 euros, said Fabio Panetta, member of the ECB's executive board, in an interview with the Financial Times.

The digital divide within societies must not be worsened either.

"We will continue to provide cash," insists Mr. Panetta.

© 2021 AFP