If it depends on the European Union, there will be a new means of payment in the future in the form of the digital euro. The European Commission today presented a bill to that effect, but not everyone is equally enthusiastic.
Yet the introduction of the digital euro is a step in the right direction, says economist and director Rens van Tilburg of the Sustainable Finance Lab. He says that although the Netherlands is ‘blessed’ with a well-functioning payment system, there is room for improvement. “I understand people in the Netherlands wondering why this is necessary,” he explains. ‘But at the same time we also use Mastercard and Visa, American companies that make a lot of profit. The digital euro could lead to cost savings there.’
‘Digital euro could lead to cost savings’
The most important reason for the introduction, however, and one that it warmly welcomes, is because the whole world is going digital. “The Netherlands is really at the forefront of this,” he continues. ‘ Less and less cash is also being used. This threatens a world in which there is no public money, while the most used money was public.’
Acquisition
Today, however, this is no longer the case, Van Tilburg points out. Instead, most of the money is in commercial banks. “And that threatens to take over the whole system,” he explains. “And it might not be so bad with commercial banks, because central banks oversee that, but in 2019, Facebook suddenly made threats with other big tech companies to invent their own payment system and currency.”
Libra, as Facebook’s currency was called, caused panic in Europe. The risk of payment transactions made with a currency over which central banks had no say was daunting, says Van Tilburg.
Solution looking for problem
However, JA21 MEP Michiel Hoogeveen calls it a hassle-free solution. For example, declining use of cash requires a different solution, such as securing the number of ATMs, he says. “Cash will continue to exist, as will the ECB and the European Commission.”
He also believes that the introduction of the digital euro will above all create confusion. “Even the European banking federation said they don’t really know what to do with them, just like families don’t,” he explains. “The digital euro is on file at the European Central Bank, but ultimately traditional banks again have to ensure that it is visible in customers’ dashboards and apps. Everyone is saying ‘what is this?’, he concludes.
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
