The European Central Bank (ECB) is gearing up to challenge international payment giants by introducing its digital currency to strengthen Europe’s economic sovereignty.
Need for Digital Euro
The ECB aims to compete with American and Chinese payment systems by introducing the digital euro. Piero Cipollone, a member of the ECB’s executive board, highlighted in an interview with Le Monde the importance of reducing the gap with the US in technology and productivity.
Current Problems of European Economy
Although employment in the euro area has significantly improved, productivity growth remains a major concern. Cipollone noted that European firms, often smaller than their American counterparts, lag behind in investments in new technologies, limiting their global competitiveness. Fragmentation and lack of scale hinder the financing and development of European firms, making it difficult for them to compete internationally.
Public Opinion on Digital Euro
While nearly 90% of German households have expressed openness to adopting a central bank digital currency, concerns about privacy persist. Surveys show that 8% of respondents fear the digital euro could be used to monitor payments. Deutsche Bundesbank president Joachim Nagel acknowledged the need for more public education on the matter.
The ECB is advancing plans for a digital euro as an electronic form of cash for digital payments. A decision about the introduction of the digital euro is expected to be made in late 2025.
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