At the end of June, the European Commission presented the long-awaited legislative proposal for the digital euro. This project is very controversial, but the proposal has already been submitted to the various national governments for individual consideration. The Dutch government today expressed its support for the proposal.
Cabinet agrees to digital euro
This emerges from a letter sent by the outgoing Cabinet to the rest of the House of Representatives. Like the European Commission, the government believes that the digital euro should be the only currency in the European Union to ensure trust and use of the euro. The digital euro is the European version of it Central bank digital currency (CBDC) and is issued directly by the central bank.
This means that the government also thinks that the digital euro should be accepted by virtually all entrepreneurs. There are exceptions, but these must remain “objective and enforceable”, according to the government. There is also the impression that banknotes and coins will be phased out, but according to the European Commission these forms of money will continue to exist.
The new version of the euro would only be offered through commercial banks, which would have to offer consumers a free account. This is new compared to the current system. Because of the still relatively low interest rates, banks have been asking for money for a number of years in order to offer a current account.
Are the worries about the digital euro unjustified?
According to the schedule, around August 29, the cabinet will present parliamentary questions on the European CBDC. Several MEPs have already raised concerns about the project, such as economic privacy and economic freedom. Even some politicians fail to realize that a fully digital euro offers advantages over the current financial system.
For example, the European government wants the digital euro to enable “anonymous offline payments”, which, like cash, would lead to better privacy guarantees. When you make a payment using two mobile phones, you don’t need internet to confirm the transaction.
In addition, according to the proposal, the coin should not be programmable. That’s what matters Smart Contracts does not apply to currency. The central bank cannot then tell you what you can and cannot use the digital euro for.