Banco de España, Spain’s central bank, is taking a proactive stance by introducing its customers to the potential of a digital euro. This central bank digital currency (CBDC) would be a universally accepted form of payment within the eurozone, akin to traditional banknotes and coins.
The digital euro is seen as a way of modernizing the financial system and providing a more efficient and convenient way of making monetary exchanges. The infrastructure underpinning electronic payments, such as machines, connections, and protocols, will be a key element of the financial system, and the Eurosystem is taking steps to ensure its robustness and availability.
The digital euro is to be based on public and European infrastructure, helping to strengthen the European financial system and promote independence from foreign alternatives. It is expected to have two modes – ‘offline’ and ‘online’ – with the level of privacy varying depending on the usage. In the online scenario, the user experience will be similar to today’s electronic payment practices, while the Eurosystem will not have access to individual user data.
The “preparation phase” of the project is predicted to last two years and comprise of setting rules for the digital currency and choosing potential issuers. The European Central Bank (ECB) has launched an information page to demonstrate the advantages of the digital euro, which include effortless services such as account opening, fund loading, and payments. The Bank of Finland (BOF) is also working to create a Finnish instant payment solution compatible with European standards. Tuomas Välimäki, a board member of BOF, has called the digital euro “the most topical project” in the European payment sector.
