The European Commission has proposed a legislative plan for the launch of a new digital euro payments system, one that it says will not replace the use of physical cash.
In a new announcement, the Commission says that it acknowledges that the use of physical cash is still preferred by the majority of Europeans, but there is a growing trend of digital payments.
“While 60% of people surveyed would like to continue to have the option to use cash, an increasing number of people are choosing to pay digitally, using cards and applications issued by banks and other digital and financial firms. This trend was accelerated by the COVID-19 pandemic.
To reflect these trends, the Commission has today proposed two mutually supportive sets of measures to ensure that people have both payment options, cash and digital when they want to pay with central bank money.”
The Commission says it’s proposing both a framework to launch the digital euro, and a separate proposal to also safeguard the use of cash.
The European Central Bank (ECB) says it welcomed the proposals, and stands ready to “provide technical input” to officials on how to roll out the new digital euro.
ECB President Christine Lagarde says,
“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.”
Executive Board member Fabio Panetta, who chairs the High-Level Task Force on a digital euro, 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.”
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