News - This is what a CBDC expert says about the digital euro

By Luc Vesters

This is what a CBDC expert says about the digital euro

The digital euro is becoming increasingly likely. It is intended to compete with existing payment providers such as PayPal, Apple or Google. The European Central Bank (ECB) is encouraging the development. But it won't be decided for another two years whether the CBDC should come at all. There is no real benefit for the end consumer yet, an expert tells BTC-ECHO. In an interview, Jonas Gross of the Digital Euro Association tells what he thinks of the current plans for the digital euro.

The digital euro should be simple, fast and secure. The ECB officially ended its examination of the Prestige project yesterday and is now starting preparations for a European CBDC. By the end of 2025, the central bank wants to create a set of rules, run tests and find providers to lay the technical foundation. The ECB has even created its own advertisement to bring its vision of the European CBDC closer to the public.

It is a new competition that the ECB is facing. Providers like Paypal, Apple and Visa dominate the market for digital payments. Millions of people use these applications every day. However, most of these companies are outside Europe and therefore outside the ECB's sphere of influence.

"You want to have control over the payment system yourself, so the ECB itself sets the rules and operates the system, so you don't depend on foreign entities," Jonas Gross explained to BTC-ECHO. The president of the Digital Euro Association has been following the development of the European CBDC since its early days.

Need for digital euro "questionable"

The CBDC expert finds this argument understandable. "However, the question is whether a digital euro is necessary for this or whether other payment alternatives are being used," Gross continued. By this he is referring to new payment infrastructures such as those in Brazil.

In 2020, the Latin American country's central bank introduced "Pix," which allows peer-to-peer and business-to-business transactions within seconds - all without a new currency. In Europe, a similar project is in the works, the "European Payment Initiative," which should be ready for mass use as early as 2024. There are currently considerations to integrate the digital euro into this system.

"I expected clear results."

The ECB itself is not sure if the digital euro will come at all. The monetary authority does not want to make a decision until after the preparation phase. An introduction could not be expected until 2026, if at all.

The biggest problem with CBDC so far: its actual use. Expert Jonas Gross would have liked to see more "clear results" during the research phase on why end users should use the digital euro. The ECB advocates a free payment infrastructure within Europe. "Existing solutions can already do this today. For the digital euro to eventually be used significantly, more is needed," Gross said.

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