During the last yearsdigitization of different sectors transformed the financial landscape globally. Recently, the European Union announced their plans to introduce the digital Euro on the market, which will be a new form of digital currency backed by the European Central Bank.
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He digital euros will be a way of digital currency issued and controlled by the European Central Bank, unlike cash, the digital Euro will only exist electronically in an account issued and backed by the ECB.
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The objective of this digital currency is to offer users an easy, safe and efficient alternative to make electronic paymentsfast and accessible transactions within the countries that make up the European Union.
How will the digital Euro work?
Reports from the European Commission indicate that the Euro digital would be based on a distributor registry technology or an infrastructure shared ledger, which are systematizations that allow digital users to carry out money transactions without intermediaries.
The planes of the European Central Bank expect this digital currency to be handled through mobile applications or digital wallets, to facilitate its use and the realization of transactions.
Likewise, the European Central Bank will act as the issuer and custodian of this currencyIn order to ensure the stability and confidence of the currency, likewise, it is expected that the accounts are protected by cryptographic technology to prevent fraud and guarantee the privacy of users.
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The European Commission wants to protect money in cash, so that all citizens have freedom when choosing the payment method.
Implications and benefits
- Greater financial inclusion: According to the proposal of the European Union, the digital Euro could help reduce the financial inclusion gap, by providing users with an accessible form of electronic money, for all those people who do not have traditional banking services.
- Greater efficiency in payments: The European Central Bank indicates that electronic payments with the digital Euro could be faster and more efficient, removing time and cost barriers associated with international transactions and currency conversions.
- Innovation in financial services: The International Monetary Fund ensures that the introduction of the digital Euro could foster innovation in financial services such as programmable payments, smart contracts and new forms of value exchange.
Also read: ECB gives the green light to the project for the creation of a digital euro
The implementation of the digital Euro represents a new chapter of central bank-backed digital currencies, its implementation is in process and it must face a series of technical and regulatory challenges.
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ALEJANDRA HERNANDEZ TORRES
DIGITAL SCOPE WRITING
TIME
