The European Central Bank is planning to bring forward a plan for a public digital currency as European economies are continuously reducing cash usage, Reuters reported on Thursday.
The EU’s cryptocurrency is also likely to compete with private initiatives, such as the Facebook-led Libra project, which is due to be launched in June 2020.
At the moment, the EU’s online transactions market is dominated by U.S. card firms with no common system to lower transaction costs across the Eurozone 19 or the EU28.
The Eurogroup was due to debate a white paper on a public cryptocurrency on Thursday. The development of the ECB-backed project started last year, aiming to create a real-time payments system but had not yet reached out to the banking sector. One of the ideas being floated is for EU citizens to be able to open an account directly with the ECB, cutting intermediate costs.
Cash remains popular in European markets but the increasingly bigger share of cashless transactions is politically problematic as the replacement of payment systems by private-sector monetary units could have far-reaching implications for financial governance.