Bundesbank President Joachim Nagel believes it will be a few years before payments can be made with a digital euro. “This is a big IT project. I expect that we will be paying with the digital euro in about five years,” said Nagel Deutschlandfunk. The European Central Bank (ECB) gave the green light on Wednesday for the next steps towards a digital version of the common currency. In the next phase, which begins on November 1st and is scheduled to last two years, the regulations will be finalized and providers selected for the development of a platform and infrastructure.
The digital euro will set the standard for secure payments – and also for the speed of payments and reliability, said Nagel. “This will also be the most cost-effective option.” That’s why he is sure that the digital euro will be widely accepted. There will then be an app on the cell phone, a digital wallet. “And you will then be able to pay cheaply and reliably through them.”
With a digital version of the common currency, the 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. The aspect of Europe’s sovereignty in payment transactions also plays an important role here. In addition, the aim is to prevent digital payment transactions from being left entirely to the private sector in view of the increasing decline in cash.
The banks, which were eagerly watching what the ECB was doing, would be involved in the decision-making processes, said Nagel. “And I am also convinced that the digital euro, the way it is made, will also bring new business models for banks.” This will ultimately convince financial institutions of the digital euro. Among other things, there is widespread concern among financial institutions that customers could withdraw large sums of money from their accounts and shift them into the digital euro. Deposits would thus be withdrawn from the financial sector.