What about the digital euro?

Recently, the Chamber of Deputies discussed the digital euro, a day after outgoing Finance Minister Wopke Hoekstra (CDA) discussed with his European colleagues in Brussels. What about digital currency? Four questions and answers about them.

1. What is a digital euro?

The European Central Bank (ECB) issues the euro, but only in the form of coins and banknotes. Together with other central banks, including De Nederlandsche Bank (DNB), the European Central Bank is investigating whether it will also issue the euro digitally. It is officially called Digital Central Bank Money – English translation Central Bank Digital Currency (CBDC). The money in your bank account is also in digital euros, but this is private money, in fact a claim from you at the commercial bank. Digital central bank money is issued by the central bank.

2. What do politicians think about that?

Of the six political parties present (VVD, CDA, Volt, FVD, SP and D66) during the debate in the House of Representatives on November 11, only the FVD does not support a digital euro. “No problem, what is the solution for the digital euro?” According to Pepijn van Houwelingen (FVD).

Other parties consider it a logical and innovative step forward. Moreover, it provides more options in payment transactions and thus stimulates competition with commercial banks, among others. The outgoing cabinet, led by Hoekstra, is also positive about the introduction of the digital euro. “Innovation is written in capital letters,” Hoekstra says. “This is truly an opportunity. The entire financial landscape is being changed by cryptocurrencies. This is part of that. In addition, it is good to be present on the world stage with your own digital currency, so that you are not affected by the Chinese digital currency and later the US currency,” Hoekstra believes. .

3- Is there really clarity about the design?

new. The House has expressed concerns about privacy, whether consumer interests come first, whether criticism will continue, whether it is already clear whether there will be an account limit and whether it will go through an intermediary or whether citizens will that. Open an account with the Central Bank. But Hoekstra had to remain unanswered. The only thing he can guarantee is that cash will continue to exist alongside the digital euro. All other issues are currently under consideration by the European Central Bank. The research phase officially began on July 14. Nor will the Eurogroup go so fast. “We are still in the early stages, we have only discussed policy objectives in the Eurogroup,” Hoekstra says. The Eurogroup will meet on this topic once every three months. At the next meeting, in the first quarter of 2022, privacy will be discussed.

4. When do we expect the digital euro?

The exact date is still unknown. The current research phase on the design and distribution will continue until October 2023. After that, a decision has not yet been made on the possible release of the digital euro. If the digital euro came, it would take years anyway.