The European Parliament has approved the creation and use of the Digital Euro by the European Central Bank. The new digital currency will be piloted in 2027 and fully operational in 2028. What is the Digital Euro? It is actually cash that, instead of being in our wallets, is deposited in the central bank.<\/p>\n\n\n\n
It concerns absolutely everyone who has savings deposits of up to 3,000 euros, since every European will be able, for the first time, to open an account directly with the central bank of the member state in which they reside – and deposit up to 3,000 euros. This covers a very large part, perhaps over 70% of savings deposits. This account will be interest-free, as it is in most banks today, so that the central bank does not compete with commercial banks.<\/p>\n\n\n\n
But it will have other advantages, such as the fact that every transaction through this account will be completely free. Every payment and every transfer of money from account to account. The existence of this account and the possibilities it provides to depositors, even though it is interest-free, may force banks – finally – to pay some interest to savings depositors, if they want to keep their deposits.<\/p>\n\n\n\n
So, through the Digital Euro, central banks will take over “cash” transactions. Based on the design, all transactions will be anonymous, as now, but the central bank will know the two poles of the transaction, that is, the one who has the account and the one to whom the money ends up, either from the purchase of products and services or from a transfer – as commercial banks now know.<\/p>\n\n\n\n
However, the additional advantage of the Digital Euro exists over cryptocurrencies and this is the reason why it was decided to create it. Based on existing technology, companies such as Google, Meta and other technology companies can create their own money. Thus, central banks lose the advantage of creating money and therefore its control. The risk is that if money is produced by individuals, there is no control over the economies and they can be led to a crash, like in \u201929.<\/p>\n\n\n\n
The European Central Bank therefore wants to maintain control of the euro and that is why it is establishing the Digital Euro. But there is another reason. All cards (Mastercard, Visa, etc.) are controlled by the USA, all transactions are based on the dollar, the same happens with cryptocurrencies (stable coins), which are also based on the American currency. The Digital Euro strengthens the European Union and the value of the euro, reducing its dependence on the USA.<\/p>\n\n\n\n
The Digital Euro, then, is a central bank money, highly secure compared to simple cryptocurrencies, which is moved via blockchain technology. However, it cannot be lost from your ledger, as cryptocurrencies can be lost. And this enables those who want to take advantage of new transaction technologies to do so with the security provided by the central bank and at zero cost.<\/p>\n\n\n\n
In the case of the Digital Euro, the battle was won by the ECB, the European Parliament approved its creation and we will see next year.<\/p>\n","protected":false},"excerpt":{"rendered":"
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