The European has already been putting a lot of work into legislation and actively focused on cryptocurrencies. As a result, the European Commission launched its CBDC (central bank electronic currency) project, a fresh consultation that focuses on its digital euro. This approach enables those in influencing the digitized euro to express their ideas on how to design the finest cryptocurrency. The submission deadline for the opinions is June 14, 2022.
How Much Paper Is Spent.
According to the text, the digital euro aspires to maintain the role of government money in a digitalization. The secret to preserving monetary sovereignty in the digital age is to maintain the accessibility and usability of the banking system finances.
Additionally, as acknowledged by the Council, the broad consultation just on digital euro conducted by the European Banking System advised future currency use prioritise privacy and security. Fabio Panetta, a member of a Executive Board of a Banking System of Europe, also stressed the importance of the privacy and security of the digital euro.
According to Mr. Panetta, smaller-value payments will be subject to conventional controls, while larger-value transfers may be subject to streamlined CFT or AML procedures. The Council did make sure that the discussion was conducted in order to gather future data on a variety of subjective issues, such as: User demands and expectations that are pertinent to a digital euro.
function of a digital euro payment systems in the digital economy and the European Union.
Making the digital euro available for use in all retail transactions while maintaining the legal tender requirements for euro cash.
Financial stability is affected by the digital euro’s impact on the financial system of the European Union.
application of CTF (counter-terrorist funding) and AML (anti-money laundering) regulations.
several facets of digital euro privacy and data protection.
international payments and trades using digital euros.
The Euro as a Digital Currency for Payments
The digital euro, unlike actual cash, may be used virtually and in programmable form, making it suitable to payment systems as well as any e-commerce transaction. Another distinction between both the electronic euro and currency is privacy. Cash payments are less anonymous than those made with digital tokens.
While e-money is dependent on the organisation that issued it, it resembles bank money. It also isn’t possible to simply link it to a smart contract because it was created to support e-commerce transactions, which interferes with operationality one would expect from a crypto token as a typical digital asset.
Before making any additional decisions, it is important to consider how to purchase Bitcoin using the digital euro as just a payment channel. The digital euro is similar to other CBDCs in some ways. All other forms of payment could be compared to these characteristics. The premise of the well-proven double-layered monetary model is that supervised money arrangements can be converted into the monetary system of the central bank.
Read More About: A Model For The New Currency: The Digital Euro