Likely You have heard of the “digital euro” But you do not know exactly what this European virtual currency consists of, a kind of virtual currency in which the European Central Bank is working and that could live with cash, as an additional form of public money in the countries that are part of the euro zone.
In this article you will Know what the digital euro isin which phase it is and when it could go into force, as well as what it would mean for European citizens, how it would affect them in practice and what would differentiate themselves from the legal tender and physical course bills today.
What is the digital euro
The digital euro is public money issued by a central bank. That is, it would be exactly the same as physical money, only that “in digital format.” It is not a cryptocurrency as such – which is subject to financial risks, since its price can rise or lower – but it would always have the same value, that of the euro.
Nor is it a financial deposit or any other banking product that entails a risk to the user. In other words, it would be like wearing physical euros, but managing them in a wallet or digital portfolio, something that can be done for example from an app on the mobile phone or on the computer.
Among its advantages is to be public money that would be universally accessible and safely. In this sense, it could be used with total freedom in all countries in the euro zone and would live with physical money.
In this sense, it would not be his substitute, but would simply be used to facilitate payments and “not have to bring money in the pocket” if you do not want. It would be a complement to existing forms of money and would be used with the same security guarantee.
How will the digital euro work
Being an electronic currency, it can be stored in a digital wallet or wallet, although it is also planned that users can create their own digital wallets in the Bank’s app. But to use the digital euro it is not mandatory to have a bank account, so for example, users can also create their purses in a post office.
The user may recharge their digital purse with digital euros through bank transfer or making cash income. With the money you have in those digital purses, small payments could be made, automatic validity, in day -to -day purchases … using the bank or wallet app on the mobile phone, the smartwatch or also a physical card. The digital euro for financial deposits or paid saving accounts cannot be used, for example.
Paying with the digital euro will be useful on a day -to -day basis, but it will be even more when the citizens of the Union change country, because they can pay electronically wherever they are, without having to use a bank card for the foreigner, for example. The surcharges that are usually applied will also be avoided when using national debit cards in other countries.
At the moment, the European Union has not indicated which will be the maximum digital euros that a citizen can have in its virtual purse, although it is speculated that the limit could be placed at 3,000 euros, which seems a reduced figure.
When the digital euro will come into force
At the moment it is not known. The European Union is in the study and development phase, and the digital euro is not expected to come true, at least, until the end of 2026.
Before its entry into force, it is necessary that the supranational body approve the final legislation that governs the use of the digital euro, which is currently in the development phase and is not expected to end until at least, at least, the end of the year. Once this is approved, national central banks will decide whether or not they issue the digital euro.
It should be noted that other European countries – not belonging to the Euro zone – are also planning to launch their own digital currencies. This is the case of Norway or the United Kingdom, which could have their own digital currencies before the arrival of the digital euro.
