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\n This photograph shows European Union flags in front of the Berlaymont building, the EU Commission headquarters, in Brussels on June 9. | AFP photo <\/p>\n
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\n This photograph shows European Union flags in front of the Berlaymont building, the EU Commission headquarters, in Brussels on June 9. | AFP photo
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The EU believes a digital euro is the answer to cutting its addiction to US payment systems like Visa and Mastercard as well as Apple Pay and Google Pay as the bloc seeks to favour European firms over others.<\/p>\n
Brussels hopes it could provide an alternative local option for any payments in shops or online since people could easily pay, just like other systems, using a card, an app or via their banking app.<\/p>\n
The European Union moved one step closer Tuesday to creating a digital euro when the EU parliament\u2019s economy committee gave its green light.<\/p>\n
The European Parliament is due to confirm the approval next month, but EU lawmakers could challenge it and force an assembly vote.<\/p>\n
The European Central Bank first suggested the digital euro in 2020 because Europe lacked its own system before the EU executive made its formal proposal.<\/p>\n
The digital euro cannot be created without the legal framework underpinning the project being approved by the EU capitals and the European Parliament after negotiations expected to take place after the summer.<\/p>\n
What is the digital euro? Don\u2019t confuse it with your cash in the bank. When you use your bank card, Apple or Google Pay, you pay with physical money that exists in your account.<\/p>\n
Instead, your digital euros would be in a separate virtual wallet.<\/p>\n
The ECB hopes the digital euro will be available to citizens in 2029 if the EU negotiators approve the rules by the end of the year.<\/p>\n
If that timeline sticks, the ECB is ready to launch a pilot programme in mid-2027 to test how it would work in practice.<\/p>\n
Some say that is too long, but \u2018banks and merchants need time to prepare so they can roll it out smoothly and at scale\u2019, Alessandro Giovannini, adviser to the digital euro director at the ECB, told AFP.<\/p>\n
How will it work? Digital euros will have the same value as cash and banknotes.<\/p>\n
Any user would need to create an account with a bank or a public institution like a post office, and transfer money into it from another account or via a cash deposit.<\/p>\n
Users can then pay with digital euros in shops, online and between individuals using different methods including card, app or phone.<\/p>\n
Officials say the system would protect people\u2019s privacy, with no possibility to identify who made transactions, and an offline mode that would be as confidential as using cash.<\/p>\n
\u2018It wouldn\u2019t replace anything. Cash would still be available, and people could use existing private payment methods,\u2019 the ECB\u2019s Giovannini said.<\/p>\n
The digital euro would give more choice and let consumers \u2018preserve their freedom to choose how to pay as daily life becomes more digital\u2019, he added.<\/p>\n
European consumer organisation BEUC welcomed Tuesday\u2019s approval after lawmakers added \u2018more protections\u2019 for digital euro users.<\/p>\n
Why does the EU want a digital euro? Payment systems are \u2018not neutral\u2019 but \u2018instruments of power\u2019, centrist EU lawmaker Gilles Boyer said in a statement.<\/p>\n
\u2018We, Europeans, have had many wake-up calls about our dependence on the US. We\u2019re fully awake now, but we\u2019re not always acting,\u2019 he said, adding that Tuesday\u2019s vote would make \u2018a sovereign, pan-European payment solution a reality\u2019.<\/p>\n
EU officials often point to Washington\u2019s 2025 sanctions against International Criminal Court judges to illustrate the grip of US firms. French judge Nicolas Guillou has described how he lost access to his Visa card.<\/p>\n
The digital euro is \u2018a chance to end a dependence we have lived with for too long\u2019, Giovannini said.<\/p>\n
According to the ECB, nearly two-thirds of card payments in the euro area are handled by non-European companies, mainly Visa and Mastercard.<\/p>\n
And 13 out of 21 eurozone countries have no national card scheme for day-to-day payments in shops or online stores.<\/p>\n
Who does not want it? Banks. The main reason for their reticence is the cost.<\/p>\n
Adapting the banking system to the digital euro will cost 18 billion euros ($20 billion), a report in April by the European Banking Federation said.<\/p>\n
But the ECB says it will cost the banking sector four to 5.8 billion euros in investments.<\/p>\n
Banks also fear the effects on their financial stability because if customers convert their money into digital euros, bank deposits would plummet.<\/p>\n
The ECB says there is no risk.<\/p>\n
\u2018Thanks to its design that prevents large deposit outflows, the digital euro wouldn\u2019t cause these risks \u2014 even in extreme and unlikely crisis situations,\u2019 Giovannini said.<\/p>\n
European banks also fear reduced demand for their online services and worry the digital euro is a rival to the pan-European payment system Wero.<\/p>\n","protected":false},"excerpt":{"rendered":" This photograph shows European Union flags in front of the Berlaymont building, the EU…\n","protected":false},"author":2,"featured_media":77545,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2387],"tags":[3006,3005,3003,3000,3002,2999,258,3004,3001,2997,2998],"class_list":["post-77544","post","type-post","status-publish","format-standard","has-post-thumbnail","category-european-parliament","tag-bangla-online-news","tag-bangladesh-latest-news","tag-bangladesh-news","tag-bangladesh-newspaper","tag-bangladeshi-newspapers","tag-daily-new-age","tag-european-parliament","tag-latest-bangladesh-news","tag-most-popular-outspoken-english-daily-newpaper-in-bangladesh","tag-new-age","tag-the-new-age"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/77544","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/comments?post=77544"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/77544\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media\/77545"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media?parent=77544"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/categories?post=77544"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/tags?post=77544"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}