From the perspective of Bundesbank President Joachim Nagel, financial institutions have not yet sufficiently grasped new business opportunities through a digital euro. With the digital euro, financial products can be offered on a much smaller scale than is currently the case, Nagel said on Saturday at the “Euro20+” event with young adults in Frankfurt. “Incidentally, this is an aspect that I believe is still underestimated by the banking industry,” he said.
From a digital wallet it may then be possible to enter financial products in the financial market more quickly. The digital euro will offer completely new opportunities for financial products and customer loyalty, said Nagel. “And in the next few years it will be important for us to be able to convince the banks, and the financial service providers as a whole, that there are many new business ideas in front of them,” he noted. According to previous statements, the Bundesbank President expects that it will be possible to pay with the digital euro in around five years.
With the project of a digital euro, the European Central Bank (ECB) wants to counteract the increasing competition in digital payment transactions from US companies such as Paypal and Apple Pay and the advance of cryptocurrencies such as Bitcoin and Ethereum. The aspect of Europe’s sovereignty in payment transactions also plays an important role. In October, the ECB gave the green light for the next steps towards a digital version of the common currency. The set of rules should be finalized and providers selected for the development of a platform and infrastructure. This preparation phase began on November 1st and is initially scheduled to last two years.