European Commission has proposed measures to support the use of cash and a framework for a digital Euro
The European Commission has put forward two proposals to ensure that citizens and businesses can continue to access and pay with Euro banknotes and coins across the Euro area.
It will also set out a framework for a possible new digital form of the Euro that the European Central Bank may issue as a complement to cash.
The Euro continues to be a symbol of Europe’s unity and strength. Across the Euro area and beyond, for more than two decades, people and businesses have been accustomed to paying with Euro coins and banknotes. While 60% of people surveyed would like to continue to have the option to use cash, an increasing number of people are choosing to pay digitally, using cards and applications issued by banks and other digital and financial firms. The digital payment trend was accelerated by Coronavirus (COVID-19).
Taking it to twitter, the European Commission tweeted,
The euro is a symbol of Europe’s unity and strength.
— European Commission (@EU_Commission) June 28, 2023
For more than two decades, people and businesses have been accustomed to paying with euro coins and banknotes.
And this would not change with a digital euro ↓
The European Commission proposed two mutually supportive sets of measures to ensure that people have both payment options, cash and digital, when they want to pay with central bank money.
Although acceptance of cash is high on average across the Euro area, issues have emerged in some Member States and sectors. Meanwhile, some people have difficulties accessing cash. Today’s proposal aims to safeguard the continued and widespread acceptance of cash throughout the Euro area and ensure that people have sufficient access to cash to pay in cash if they so wish. Member States must ensure widespread acceptance of cash payments and sufficient and effective access to cash. They will need to monitor and report on the situation and take measures to address any problems identified.
In another proposal, to adjust to the increasing digitalisation of the economy, the European Central Bank (ECB) is investigating the possibility of introducing a digital Euro as a complement to cash. The digital Euro would give consumers an alternative European-wide payment solution in addition to today’s options. This means more consumer choices and a stronger international role for the Euro. The Digital Euro would be available alongside existing national and international private means of payment, such as cards or applications. It would work like a digital wallet. People and businesses could pay with the digital Euro anytime and anywhere in the Euro area.
Banks and other payment service providers across the European Union (E.U.) would distribute the digital Euro to people and businesses. Basic digital Euro services would be provided free of charge to individuals. To foster financial inclusion, individuals who do not have a bank account would be able to open and hold an account with a post office or another public entity, such as a local authority. It would also be easy to use, including for persons with disabilities.
Merchants across the Euro area would be required to accept the digital Euro, except very small merchants who choose not to accept digital payments (as the cost to set up new infrastructure to accept payments in digital Euro would be disproportionate).
The wide availability and use of digital central bank money would also be necessary for the EU’s monetary sovereignty, mainly if other central banks worldwide start developing digital currencies. It is also important against the backdrop of the developing cryptocurrency market.
