Digital technologies are developing rapidly, so it is not surprising that the European Central Bank (ECB) is considering the possibility of creating a digital currency. In this context, the ECB is actively exploring the possibility of digital access to the euro.
Why the ECB is considering digital access to the euro
One of the main motivations for the ECB to explore digital access to the euro is to reduce the use of cash. Cash has its drawbacks, such as the possibility of loss or theft, and is not reliably protected from fraud. In addition, its circulation requires significant storage and transportation costs.
How the digital euro works
- Digital euro– is a digital currency issued by the ECB and stored on special electronic wallets. To use the digital euro, you need internet access and digital technology support. The digital euro can be used to make electronic payments and pay for goods and services.
Risks and challenges of the digital euro
There are some risks associated with the creation of the digital euro. One of the most important is the risk of cyberattacks on the digital euro system, which could lead to the loss of digital funds. In addition, the digital euro could become a vehicle for illegal transactions such as money laundering and terrorist financing.
In addition, the introduction of the digital euro will require large infrastructure development and implementation costs, which may be a challenge for some EU member states.
The ECB continues to explore the possibility of digital access to the euro, which has the potential to reduce the use of cash and improve payment efficiency in Europe. However, before introducing the digital euro, all possible risks and challenges need to be carefully considered to ensure the security and sustainability of the new system.