Europe Pursues Digital Euro to Bolster Financial Independence, Economists Say
Brussels – A digital euro is being developed not to replace existing bank deposits, but to function alongside physical cash and enhance Europe’s strategic financial position, according to plans currently under consideration. The initiative aims to reduce reliance on the U.S. dollar’s dominance in global finance and challenge the influence of american payment systems like Visa,Mastercard,and PayPal.
The envisioned digital euro,championed by economists like Lucrezia Reichlin,represents a broader ambition for European financial sovereignty.While the currency will not generate profit, it’s designed to offer citizens a secure, efficient method for online and in-store transactions via smartphones, as well as for swift peer-to-peer money transfers.This move comes as Europe seeks to establish a stronger international role for the euro and lessen its dependence on foreign financial infrastructure.
Central to the design is a distribution model mirroring that of physical cash: commercial banks will handle the digital euro, with the central bank guaranteeing its redemption. it will be designated as legal tender, ensuring its acceptance across the Eurozone.
To manage potential risks and encourage adoption, a transaction limit of EUR 3,000 will be implemented, though users will be able to replenish their digital wallets freely. The digital euro is intended as a complement to, not a replacement for, the vast majority of money held in bank accounts.
