Online Transactions, Peer-to-Peer Payments Should Be Priorities With Digital Euro, ECB Says

Transfers in stores and to governments could take longer to develop, but basic personal use should be free, the European Central Bank said.

AccessTimeIconFeb 24, 2023 at 10:34 a.m. UTC
Updated Feb 24, 2023 at 2:41 p.m. UTC

The ability to make purchases online and send money to friends should be the priorities with a digital euro, the European Central Bank said in documents published on its website on Wednesday.

The slideshow, published for a meeting, says other uses such as paying taxes, receiving welfare payments or even paying in physical stores would follow in a later.

The ECB is one of many jurisdictions from around the world considering whether to issue a central bank digital currency, or CBDC. It is scheduled to make a formal decision later this year – but its officials are already thrashing out technical options and say that a digital euro will need to have multiple applications to address user needs and market gaps.

“In practical terms, a staggered approach would contribute to ensure a smooth end-user payment experience” and “reduce the implementation complexities” of trying to roll out new systems all at once, said the document, which was produced by the ECB’s digital euro project team.

The initial release of a digital euro would be for e-commerce and for peer-to-peer payments made among private individuals, the document said. Officials on the team have previously said use cases like paying wages, or applications that could align with decentralized finance, should be considered only in a later phase.

Free money

Using the digital euro for private individuals should be free for basic applications like onboarding and making payments, a separate document produced for the same meeting said – but it added there could be new laws to discourage banks from charging merchants too much for use.

Payment service providers “would be able to charge merchants,” but “legislation might establish an expectation on merchant pricing considering the current levels for comparable retail payment solutions,” the document said.

That broadly mirrors current arrangements for handling cash, although European Union laws known as the Single Euro Payments Area and Interchange Fee Regulation limit the charges that banks and card operators can make for bank transfers and credit card payments.


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Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

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