Recently, the House of Representatives discussed the digital euro, the day after outgoing Finance Minister Vopke Hogstra (CDA) discussed it with his European counterparts in Brussels. What about digital currency? Four questions and answers about it.
1. What is the digital euro?
The European Central Bank (ECB) issues the euro, but only in coins and notes. Together with other central banks, including De Nederlandsche Bank (DNB), the ECB is exploring whether to issue euros digitally. Officially it is called Digital Central Bank Money – English translation Central Bank Digital Currency (CBDC). The funds in your bank account are also digital euros, but it is personal money, actually a request from you in a commercial bank. Digital central bank money is provided by the central bank.
2. What do politicians think about this?
Of the six political parties (VVD, CDA, Volt, FVD, SP and D66) that participated in the November 11 debate in the House of Representatives, the FVD was not the only one in favor of the digital euro. ‘No problem, what is the solution to the digital euro?’ According to Pepijn van Houwelingen (FVD).
Other parties see this as a logical, innovative development. Moreover, it offers more option in payment transactions, thus stimulating competition with commercial banks. The Hoekstra-led outgoing cabinet is also positive about the introduction of the digital euro. ‘Innovation is written in big letters,’ says Hoxtra. ‘This is really an opportunity. The entire financial landscape is being transformed by cryptocurrencies. That’s part of it. ‘ In addition, it is good to be on the world stage with your own digital currency, so Hoekstra hopes that the Chinese digital currency and later the US will not be ejected.
3. Is there already clarity about the design?
New. The council has expressed its concerns about whether privacy, consumer interests come first, whether money will continue, whether there is a limit to the account, whether it will go through an intermediary or whether citizens will like it. Open an account with the Central Bank. But Hoekstra had to remain unanswered. The only thing he can guarantee is that the money will continue to be with the digital euro. All other issues are currently being investigated by the ECB. That research phase officially began on July 14th. And the euro group didn’t go that fast either. ‘We are still in the early stages and we have only discussed policy objectives in the Eurozone,’ ‘Hoxtra said. The Euro group meets quarterly on this matter. At the next meeting, in the first quarter of 2022, privacy will be discussed.
4. When can we expect a digital euro?
The exact date is not yet known. The current research phase on design and distribution will run until October 2023. After that, the decision to offer a digital euro has not yet been made. If the digital euro comes, it will take many years.
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