The Digital Euro and Ireland

The digital euro has entered a two-year preparation phase which will lay the foundations for potentially issuing the digital euro across Europe.  According to a new survey conducted by BearingPoint, 40% of respondents in Ireland are unaware of the digital euro.  So, whilst knowledge of the digital euro is relatively widespread across Europe, in Ireland, further communication and education is required to ensure acceptance of the digital euro as a supplement to cash.

What is the Digital Euro?

The Digital Euro would be a digital version of physical bank notes and coins, it would be free of charge to individuals and businesses within the euro area for making everyday payments.  Importantly, it should be seen as a complement to cash and not a replacement.   

Globally, central banks around the world, including the ECB are investigating the potential for issuing a Central Bank Digital Currency (CDBC), as a means for addressing the declining use of cash and promoting greater innovation and competition within payment services.  Other countries that have launched, piloted, or are exploring a digital currency include: The Bahamas, China, India, Sweden, Malaysia, Brazil and Australia.

How would it operate?

A broad range of options are being investigated around how it would work in practice, with digitalisation central and financial inclusivity being core principles.   The digital euro would be usable across a range of digital payment devices, including mobile phones, smart watches and tablets, and could be integrated with existing apps such as your bank account.  Importantly, it would also offer the ability to make payments with a device when there is no internet or mobile connection.  

For those without a digital device and / or a bank account, they could still access the digital euro through a payment card issued by an agency such as a post office.

 When is it Coming?

After a two-year investigation phase the ECB has moved forward to a preparation phase, which commenced 1 November 2023 and will run initially for two-years. The aim of the preparation phase is to lay the foundations for the potential issuance of a digital euro, including the digital euro rulebook and selecting providers that could potentially develop a digital euro platform and infrastructure. However, importantly, the decision on whether to ultimately issue a digital euro can only be considered at a later stage, after the adoption of the legislative framework for the digital euro at the European level.