A digital Euro?

Amid the rapid digitalization of our lives accelerated by the current pandemic, the European Central Bank (ECB) in cooperation with the European Commission is contemplating the introduction of the digital Euro. They are jointly reviewing a broad range of policy, legal and technical questions that are necessary for the introduction of the digital Euro, as well as their respective mandates and independences provided for in the Treaties. 

The digital euro would not be a cryptocurrency. A digital euro would combine the efficiency of a digital payment instrument with the safety of central bank money. In the words of the ECB, it would still be euro, a digital version of banknotes complementing and not replacing cash payments.

See the ECB's Report on a digital euro for more details.

The decision on the introduction of the digital euro will be announced later this year.

From today's news: cashless societies and vulnerable consumers

The Guardian reports today on an interesting document, the Access to cash review, which has investigated to what extent the UK market infrastructure - and UK citizens - are ready for developments in the cash markets that are likely to take place in the coming 15 years. 

As the use of cash declines, maintaining its availability becomes increasingly burdensome for market actors - banks in particular.

With ATMs and bank offices closing by the day, the availability of cash may become an issue in not so long time - are consumers ready to go cashless? According to the review, 17% of consumers could not dispense of cash, and around 4% still conduct all of their market transactions in cash. 

The report thus calls for:

• Government and regulators to step in urgently to ensure cash remains viable
• A “Guarantee to Cash Access” for all, including those in remote and rural areas
• Those providing essential services to be required to allow consumers to pay by cash
• A more efficient, effective and resilient wholesale cash infrastructure to ensure that cash remains viable as its use declines.  

The saliency of the issue for vulnerable consumers hardly needs explanation - as it is mainly older consumers, those living in rural areas and people in the informal economy who rely on cash in their daily lives. It seems all but unlikely that similar issues will also need to be discussed outside of the UK.