In early November, a Chinese central bank official claimed that more than 123 million personal wallets had been activated for e-CNY. Meanwhile, a Nigerian central bank spokesperson reported that users of Nigeria’s eNaira wallet were approaching half a million. However, what is happening on the old continent?
Too good to resist?
During the ECON Commission of the European Parliament, Fabio Panetta, Member of the Executive Board of the European Central Bank, spoke about the design of the digital euro and reported on some findings after the investigation phase of the project.
Panetta discussed the need to make the digital euro ‘attractive’ to customers, saying:
“Consumers will only use the digital euro if it is widely accepted for payments, and traders will want reassurance that enough consumers want to use it. In practice, while we often mention the financial stability risk that would emerge if the digital euro was too successful, we also have to face the reverse risk, the risk that it will not be successful enough. “
He continued his words:
“To be successful, a digital euro must be attractive to users by providing an efficient and inexpensive means of payment, available everywhere. “
But the question remains: what are the chances that the digital euro will soon match the Chinese e-CNY in terms of statistics? Panetta said there was a “Clear schedule” and confirmed that design options would be lightened by early 2023. In the meantime, a prototype could come in the following months.
Old Europe must unite its efforts
In a previous speech, Panetta expressed concern that European users would prefer private cryptos and not embrace the digital euro as expected.
Exploring other risk factors, Panetta underscored the importance of interoperability, cooperation from authorities, and restricting the use case of CBDC as an investment. Emphasizing the need for a CBDC, he also highlighted how non-European payment providers dominated European card payments:
« […] if the footprint of these providers continues to grow, this would raise serious questions for Europe’s payments autonomy, with potential implications for users. “
Finally, Panetta assured listeners that “ focus groups Would gather feedback from business stakeholders across the euro area to understand their preferences.
Requests from Germany
In October, the Deutsche Bundesbank survey found that only 13% of respondents supported the launch of the digital euro. However, this minority gave some credit to Panetta’s observations on private payment providers. The report added:
“Among supporters of the digital euro, 65% saw it as a good alternative to cash and 63% as a good alternative to private means of payment […] Around 61% of supporters also saw that the digital euro is part of a digital society. “
As countries around the world moved forward with their launch of the CBDC, the eurozone remained on the sidelines. The time has come to dot the ‘i’s, but there is still a need to take into account the risks and associated costs of launching the digital euro.