The broad acceptance of the digital euro throughout the EU, high levels of security, ease of use and the guarantee for user privacy are some of the benefits of the digital currency – still in the planning stage – presented by the Central Bank of Cyprus.
CBC officials at a press conference on 9 July noted that the digital euro is not intended to replace cash and existing electronic payment options, but to add another option.
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In his welcome address, Central Bank Governor Christodoulos Patsalides noted that the Eurosystem is considering the possibility of launching a digital currency, similar to what almost all central banks around the world are doing. The Governor underlined that a strong euro underpins the autonomy of the EU for the benefit of consumers and businesses, noting that while the Eurosystem is preparing for the future of the euro, the welfare of citizens remains the ultimate goal.
In a video message, Piero Cipollone, member of the Executive Board of the European Central Bank and Chairman of the High-Level Task Force on the Digital Euro, explaining the potential uses of the digital euro in the Cypriot economy, said that “Cyprus attracts millions of tourists every year. Tourism is a significant part of your economy, creating jobs and opportunities for everyone. Making payments is a key part of our lives, including when we are on holiday. At present, European tourists who do not wish to pay with cash are entirely dependent on non-European payment methods for transactions with Cypriot hotels, restaurants, taxis and other services. This lack of alternative solutions forces local merchants to accept these non-European payment options, and the resulting lack of competition naturally drives up the costs they must bare”.
The presentation of the digital euro was made by Stelios Georgakis, Acting Senior Director of the Banking Division of the CBC, who explained through specific examples why the digital euro is a key pillar for truly European, innovative, direct and seamless retail payments.
Georgakis clarified that the Eurosystem is carrying out preparatory work to be able to launch the digital euro, if and when necessary, provided that the package of legislative acts of the European Commission will be finalized.
Furthermore, he said that the digital euro, if launched, would be a European initiative that would offer something unprecedented: a truly European digital means of payment accepted throughout the euro area, governed by a legal tender regime, offering the highest level of privacy and protecting users’ personal data.
Regarding the way the digital euro is expected to affect banks and businesses, Georgakis noted that the Eurosystem will not change the current relationship between customers and payment service providers: banks, payment institutions and e-money institutions that are licensed and supervised will be able to offer their customers an additional payment option.
As for businesses, he said that they would have immediate access to funds to be collected through the digital euro, whereas today it may take 2-3 working days for electronic payments to be cleared, and they will also be in a better position to negotiate lower fees compared to the existing electronic payment fees they have to pay. Finally, he stressed the importance of strengthening Europe’s strategic autonomy and resilience through the digital euro, as eurozone citizens will have an additional choice, beyond the private sector’s choices, which may be affected by sanctions.
