The Eurosystem, of which the Banco de España is a member, is looking into the possible issuance of a central bank digital currency (CBDC), the digital euro. It would be the digital version of our currency and it would complement banknotes and coins, giving people an additional choice about how to pay. Cash would still be a payment option; it would not be replaced. The project is under preparation, there is not yet a decision on its potential issuance.
A digital euro would be money issued by the central banks of the Eurosystem: in other words, it would be like cash but in a digital format. It would offer an additional electronic means of payment, complementing cash and private means of payment. Furthermore, it would be a digital means of payment universally accepted throughout the euro area, at no cost for citizens for basic services (e.g opening an account, paying at a shop), and backed by the Eurosystem.
In a context of increasing electronic and mobile payments, it is fundamental to preserve the role that central bank money plays to guarantee citizens’ confidence in our currency. Therefore, cash needs to evolve to meet changes in users’ payment preferences and thus provide an accessible and secure means of payment. In addition, the digital euro would help to reduce our dependence on non- European payment service providers and serve as a catalyst for innovation and competition in the European payments sector.
A digital euro would bring benefits both for citizens and merchants, as well as for the European economy. Some key benefits would be the following:
- The digital euro would complement banknotes and coins, reaching payment segments where currently it is not possible to use cash, e.g. e-commerce.
- As a public good, it would preserve the most relevant characteristics of cash. In particular:
- Respect for user’s privacy in the digital era: the Eurosystem would not identify or track user’s payments.
- Easy to use, even for people not used to or with difficulties in handling digital devices.
- Secure and accepted throughout the euro area.
- Basic use free for consumers.
- It would foster innovation and support the digitalization of the European economy.
- It would be a payment solution governed by Europe, guaranteeing our autonomy amid potential geopolitical tensions.
- It would contribute to prevent market dominance, improve the efficiency of payment´s systems and promote innovation in the private sector.
- It would offer the possibility of making payments without Internet connection and with higher privacy, as there would be no third party involved.
