The Commission recalled that people and businesses in the euro area and beyond have been used to paying with euro coins and notes for more than two decades. While 60 percent of people surveyed would like to continue to be able to use cash, an increasing number of people are paying digitally, using cards and apps issued by banks and other digital and financial companies.
Both cash and digital currency
To take account of these trends, the Commission has proposed two sets of mutually supportive measures to ensure that citizens have both cash and digital euro options.
The legislative proposal, which sets out the legal framework for a possible digital euro to complement euro banknotes and coins, will ensure that people and businesses have an alternative that allows them to pay digitally with a universally accepted,affordable, secure and resilient form of public money.
June’s proposal, once adopted by the European Parliament and the Council of the European Union, will set the legal framework for the digital euro. It will be up to the European Central Bank to decide whether and when to issue the digital euro. The latter, like other central banks around the world, is exploring the possibility of introducing the digital euro as a complement to cash. The digital euro would act as a digital wallet, giving consumers more choice and giving the euro a stronger international role. This is also important in the context of the emerging cryptocurrency market.
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Banks and other payment service providers in the European Union would distribute the digital euro to people and businesses. Basic services in the digital euro would be provided free of charge to individuals.
Digital payments
Businesses in the euro area would be obliged to accept the digital euro, except for small merchants who choose not to accept digital payments (as the cost of setting up the infrastructure for such payments would be disproportionate).
The euro in cash is “legal tender” in the euro area. The Commission’s proposal aims to set out in legislation what this means, focusing on two aspects, acceptance of cash and access to it. In fact, problems with cash acceptance have emerged in some Member States and sectors. In turn, some people are having problems accessing cash as a result of the closure of cash machines and bank branches.
The aim of the Commission’s proposal is to ensure the continued acceptance of cash throughout the euro area and to ensure that people have sufficient access to cash, and therefore Member States will need to ensure both widespread acceptance of cash payments and sufficient and efficient access to cash. They will need to monitor and report on the situation and take action to address any problems identified.
The proposal will ensure that everyone in the euro area is free to choose their preferred payment method and has access to basic cash services. “It will ensure the financial inclusion of vulnerable groups who tend to rely more on cash payments, such as the elderly”.
