Major banking institutions are now reportedly calling for the European Union to rethink the Digital Euro. According to media reports, there are now at least 14 large banks asking the EU reexamine its digital euro roll-out strategy.
The European Payments Initiative (EPI Company) has now sent a rather strongly worded letter to EU policymakers, cautioning that the present Digital Euro design (and resulting implementation) might significantly undermine existing European payment solutions rather than actually helping them.
Basically, their message can be summarized as follows:
- The Digital Euro does not add clear or real value for end-consumers.
- It potentially risks giving Apple Pay, PayPal, and Alipay more control and power, not less.
- It seemingly duplicates infrastructure Europe currently has (such as Instant Payments).
- It will not actually go live until 2029, while Europe requires sovereignty as soon as possible.
These banks now want support for European-built payment solutions, such as Wero, rather than developing a public-system competitor.
Notably, this is said to be the first time EPI openly positions itself against the Digital Euro.
Whether or not Europe needs a public digital currency or if it should allow the EU to focus on private EU-native payment channels is a matter of opinion and considerable ongoing debate. Interestingly, we would not even be having these concerns and detailed conversations if it were not for the rise of Bitcoin and other cryptocurrencies.
When BTC first launched, nobody took it seriously. There have been numerous predictions about the so-called death of Bitcoin, but it refuses to go away. Recently, privacy focused cryptocurrencies like Zcash have also rallied. More than likely, the surge in ZEC price has been influenced by ongoing discussions about Bitcoin and central bank digital currencies (CBDCs).
It sure seems that CBDCs and the Digital Euro aim to accomplish the opposite of what decentralized cryptocurrencies are trying to do. By being able to track every transaction more carefully, the Digital Euro could help centralized governments exercise even more control over their citizens. This may result in a lack of financial privacy and it would take control and independence away from the individual (the exact opposite of what Bitcoin and Zcash aim to do).
It is quite possible that the Digital Euro does launch but not with the same core objectives and design characteristics that have so far been proposed by EU policymakers and other contributors to the initiative.