Antonio Tejeda Encinas President Euro American Digital Law Committee
As the European Central Bank (ECB) recently announced, the digital euro preparation phase has been given the green light.
It is important to remember that the European Parliament is discussing the European Commission’s proposal for a European Union regulation on the digital euro, which sets out the possibilities for issuing.
The accompanying brochure, issued by the ECB, provides an insight into the key features of the digital euro project under development:
1. It offers a simple alternative for daily payments, compatible with a variety of devices such as smartphones, smartwatches and wallets.
2. Works as a digital option with cash-like features (without replacing it), allowing real-time P2P payments across the euro area, online as well as offline or mobile.
3. It does not require a current account or credit cards. It can be used with or without a linked bank account. In the second case, a wallet (possibly provided by the ECB) would be used. Even, without wallet, it can be used with rechargeable prepaid cards.
4. It is offered as a free public service for all euro area residents.
5. Its objective is to strengthen the European Union with a public asset backed by the ECB, such as cash, providing an alternative to private payment solutions and reducing dependence on non-European means of payment.
6. The issue is seen as a necessity to maintain the strength of the euro in the global financial scenario, given threats such as the Digital Yuan or possible stables of the great technological.
7. Privacy is considered fundamental, and it is ensured that the ECB will not collect, store or share personal data from transactions.
8. The digital euro will not be programmable, meaning that it cannot be changed or restricted in its use; however, banks and payment service providers may integrate services related to the digital euro.
9. It can be used in ATMs to exchange digital euros for cash and vice versa.
10. The ECB emphasizes that the digital euro is designed exclusively for making payments and not for investments or profit generation. A holding limit, possibly between EUR 3000 and EUR 4000 per person, will be established. If an amount exceeding this limit is received, the surplus will be transferred to a tied account if it is available, otherwise the transaction will be rejected.
Taking these features into account, the digital euro emerges as an alternative to cash, bank deposits, credit cards, payment solutions such as Bizum and stablecoins, offering a digital, free and accessible payment medium, without requiring a current account, with limited holdings for small amounts.
