Exploring the Key Features of Digital Euro CBDC

Some groundbreaking revelations have recently surfaced regarding the digital euro, capturing the attention of the financial world. The European Commission's recent publication of draft legislation on the digital euro brings the idea of a Central Bank Digital Currency (CBDC) closer to reality. The Digital Euro will not replace physical cash but instead exist alongside it as an additional form of online or electronic payment. It is expected to be available by 2026. Let's delve into the key features of this proposed digital currency:

Independence from Intermediaries: Unlike traditional payment systems like Mastercard or VISA, the digital euro would eliminate the need for intermediaries. Users would be able to make transactions directly without relying on third-party payment providers.

Wide Availability: The Digital Euro is planned to be accessible across the entire Eurozone, available to both consumers and businesses alike.

Backed by European Central Bank (ECB): Unlike cryptocurrencies, the digital euro will be fully backed and regulated by the ECB, providing users with a secure and trustworthy payment option.

No Transaction Fees: Paying with the Digital Euro will not incur any transaction fees, similar to using physical cash. However, merchants accepting digital payments may incur fees, EU aims to keep these fees minimal to ensure competitiveness and encourage widespread adoption of the Digital Euro among businesses.

Offline functionality: The digital euro would enable offline payments, similar to cash. It would be possible to make payments from one smart wallet to another without an online connection.

Privacy and Data Protection: Digital Euro will not involve as much data as credit card transactions, providing a level of privacy similar to using physical cash. As there is no personal information involved in transactions.

Limitations on Digital Wallets: To prevent abuse and money laundering, there may be limitations on the amount of digital currency one can hold in their smart wallet.

Thumbnail Source

Link copied to clipboard