Today, European finance ministers are meeting to discuss details about the forthcoming digital euro. Should the European central bank digital currency (CBDC) are introduced as legal tender, this can have major consequences. One of those consequences is that retailers will be obliged to accept the digital euro.
The digital euro is getting close
According to a document that ministers will discuss on Monday, the CBDC will be given the same status as bills and coins. European retailers and traders will therefore not be allowed to refuse the CBDC as a means of payment according to the law.
“[Een status als legaal betaalmiddel] means an obligation for beneficiaries to accept payments with the digital euro. That will increase the network effect and affect distribution.”
According to the planning, the digital euro would already be used by October. Until then, the finance ministers of the euro countries will dot the i’s and cross the t’s. Before the digital euro will be put into use by the European Central Bank (ECB), it will still be determined which user functions will be given priority.
During this last phase of the development of the digital euro, the national governments of the euro countries are involved. Last week it was announced that the governments will be presented with a bill. This proposal relates, among other things, to money laundering prevention and compensation for distributors of the CBDC.
Exciting time for CBDC
It remains to be seen how effective the European Union’s attempt to introduce the CBDC will be. Such an economic transition is completely new, and it is unclear whether the response from European citizens is welcoming.
China and Nigeria, among others, have already put their CBDC into circulation, but so far this has proven to be a very difficult process for both countries. People seem to have a hard time getting used to digital versions of their currencies, and still seem to prefer cash.