After having published the world’s first comprehensive framework for crypto regulation earlier in June, the European Union continued to work hard on an institutional digital currency of its own. 

Competitor to crypto?

What is the digital euro anyway? It is digital money issued by a central bank to the general public. A digital euro, according to the European Central Bank, would offer an electronic means of payment that anyone could use in the Euro Area. It would be secure and user-friendly, like cash, payable with a card or a mobile app - but quite different from “private money”. 

Now, central banks only issue digital central bank money to banks with a central bank account.

An ECB manifesto on key objectives, published in July 2022, says the digital euro will preserve the role of public money as the monetary anchor for the payment system, reduce the use of cash for payments, facilitate cross-border transactions in a safer and more efficient way. 

Launching a central bank digital currency in Europe responds to the increasing demand for safe and trusted electronic payments, according to the ECB. The official European digital money “would provide an anchor of stability for the payment and monetary systems, would also strengthen the monetary sovereignty of the Euro Area and foster competition and efficiency in the European payment sector.”

More to read:
EU publishes landmark crypto legislation in Official Journal

In fact, the issuance of the digital euro is part of a wider process that is favored by the International Monetary Fund and governments around the globe, which are trying to hold their grip on the financial system and keep the cryptocurrencies off mainstream.