Trust for Digital Euro You Get Defined by Banks
Andrea Orcel, CEO of UniCredit, has given his go-ahead for them, urging that banks must still be in the front line of its set-up and usage. Speaking at a conference held by Mediobanca, Orcel argued that a digital euro would be very beneficial to Europe if the bankers continue to be among the main financial intermediaries.
Issue of Sovereignty and European Union
Orcel made it clear that them project would be successful only if banks would keep their status of primary circulator of money. He conceptualized the digital currency’s start as a “matter of sovereignty for Europe”. The European Central Bank (ECB) has constructed a plan to support the euro area’s sustainability and Europe’s strategic autonomy and monetary sovereignty through the issuance of them.
Where Do Banks Fit in the Digital Euro System?
When speaking of the implementation of the digital euro, Orcel raised the question of the banks’ role in the process. He was quick to point out that combining digital euros and cash will not only be advantageous for Europe but also for the banks themselves.
He expressed his opinion as such: … banks are the cash euro’s infrastructure and platform, and likewise the digital euro would be. Thus banks being 100% connected means that they will say to the customer that pay that I can have cash or digital money and that is seamless. It will be very good for Europe and it will be very good for banks.
ECB’s Vision for the Digital Euro
In April, ECB’s Executive Board member Piero Cipollone mentioned that digital euro services would be provided by commercial banks. Banks will provide services to consumers for free, while other third-parties like merchants and service providers would get a service fee. It is speculated that consumer banks will take fees from merchant banks. However, neither the terms of the fee nor the exact amount have been disclosed yet.
Cautious Approach Amidst Declining Cash Usage
Evelien Witlox, them director at the ECB, stressed a very cautious path at the digital euro project at Money20/20. Declining cash usage and increasing usage of digital and cryptocurrency are creating pressure on the ECB to start to act.
Legal Tender and Everyday Transactions
If it will be put in the market, the digital euro will become the legal tender, which then will allow all people to use the money from the central bank for the day-to-day purchases. Besides, Witlox pinpointed that digital payment mode availability would entail merchants also accepting them, which would be a win for citizens as more payment methods would be offered.
