Digital euro introduction: Banks fear billion costs and benefits!

Digital euro introduction: Banks fear billion costs and benefits!

Deutschland - The European Union plans to introduce a digital currency, the digital euro, to counter the increasing challenges in payment transactions. A study by the PWC consulting company, which was commissioned by the three European credit associations (ECSAS), estimates the costs of the necessary adjustment from 19 banks to over two billion euros. In a extrapolation over the entire euro area, the costs could be between 18 and 30 billion euros, depending on the later scenario of the introduction. These extensive investments are in the context of a changing financial landscape, in which many banks and savings banks in Germany comment critically against the idea of ​​the digital euro.

An essential goal of the digital euro is to counter private providers such as PayPal, Mastercard and Visa a European digital payment offer. At the same time, there are concerns because it remains unclear which concrete additional benefit the digital euro should offer compared to existing payment methods. Existing systems such as real -time transfers already meet a variety of requirements in terms of speed and security. PWC identifies several cost drivers, which are necessary to adjust the necessary adjustments to mobile banking apps, web banking, physical payment cards and ATM infrastructure that could cause an estimated cost of 9 million euros per bank. In addition, the introduction of the digital euro could bind almost half of the available specialists for years, which could potentially block innovations in payment transactions.

global trends in digital currencies

The digital euro is part of a global movement in which over 80% of central banks are introduced or already the establishment of digital currencies (CBDCs). As the PWC CBDC Global Index 2022 shows, there are leading projects such as the digital Yuan in China, the Enaira in Nigeria and the sand dollar in the Bahamas. These initiatives aim to promote financial inclusion and to increase GDP through acceptance in the private sector. China has already made tremendous progress with its digital Yuan and uses it as part of his state sovereignty and control over money.

The European approach, however, is in contrast to the ambitions of China to dominate international payments. The European Central Bank (ECB) plans to create a draft law for the digital euro, in order to strengthen integration and consumer protection at the same time. Germany's and France urge to speed up the process is an essential factor.

opportunities and challenges

The advantages of a digital central bank money (DZBG) are obvious: increase in efficiency, reduction in costs, better financial inclusion and new monetary policy options. Combating money laundering and a simplified cross -border payment processing are just a few of the additional plus points. However, there are also challenges that affect technological implementation and possible surveillance aspects.

The concerns include questions about data protection and inclusiveness, which are even more urgent in view of the growing acceptance of cryptocurrencies. It remains to be seen whether the digital euro can provide the hoped -for benefits and better integrate the fragmented payment transactions in the euros system. In addition, the implementation of the digital euro could probably not be realized until the end of 2025.

Overall, the digitization of the money is a multi -layered process that has to be strategically accompanied in order to promote both innovations and to protect the existing financial infrastructure. The next steps in the discussion about the digital euro will be crucial for the future of the currency landscape in Europe. Developments in other countries such as China could serve both as a model and as a warning.