by Yiannis Georgoulas
The digital euro is set to be a new form of digital currency from the European Central Bank. It will aim to provide a secure, fast and efficient method of payment in the European Union and will be based on a distributed ledger technology, as is the case with the blockchain technology already widely used, and will allow consumers and businesses to use digital currencies in complete security. The digital euro, however, is still being developed and tested by the European Central Bank and is expected to be launched in the next few years. This will be a response to critics of digital currencies as we have seen them used more and more in recent years with banks racing to keep up with developments in the financial sector.
The reasons why we see that it is going to prevail in the coming period are several since it can increase the security and efficiency of payments by facilitating them, as well as reducing the risk of fraud and at the same time increasing confidence in the financial system. On the other hand, the cost is dramatically reduced and even for those who have difficulty making payments for various reasons, it makes it easier for them by greatly reducing the intermediaries for such an action. Finally, it can be said that the digital euro can create new opportunities for consumers and businesses since, through the development of innovative solutions, they will benefit by saving more time or reducing their costs. We are in the era when traditional currencies are being dismantled and we are moving into the digital era.
The solutions brought by fintech seem to have changed the landscape because people are already rewarding them by increasing their usage. The launch of the digital euro will be the culmination of years of effort by fintechs to get their solutions accepted as this will allow them to grow even more forcing traditional banks to change faster.
*Mr. Yiannis Georgoulas is a Strategy and Operations consultant.
[This op-ed was translated from its Greek original]