DIGITAL EURO ARRIVES ON OUR BANKING APPS

A digital currency. A payment application. A proprietary technology that guarantees the confidentiality of user data. And the first experiments for a virtual wallet, which in 3-4 years should lead to the adoption of the digital Euro within a single payments area, that of the Eurosystem. Fabio Panetta, a member of the Governing Council of the European Central Bank, described it in recent days as a revolution that will also have to be implemented to "preserve Europe's strategic autonomy." So it has geopolitical repercussions. The electronic payments industry has historically been dominated by the United States and China, which replicate this digital Iron Curtain present in all areas of technology: from artificial intelligence to telecommunications and satellites.

The Old Continent lacks operators and circuits capable of intermediating them, as the U.S.-based Visa and Mastercard dominate the transaction industry and PayPal is the benchmark for private-to-private money exchanges. Yet, aided by the systemic shock originated by the Covid pandemic, people's behaviors are changing at an unprecedented rate: in the past three years, since 2020, cash payments in the euro area have dropped from 72 percent to 59 percent, while digital payments are increasingly popular. In the Netherlands and Finland, cash is used in only one-fifth of transactions. That's why Panetta, among the papabili for the role of future governor of the Bank of Italy, is working to build this "public good" without fees.

It is clear that there are risks to user privacy and to the fight against money laundering used by mafias and terrorists. In addition, there are a number of regulatory (and technological) steps that Europe will have to take. The EU Commission is expected to present its proposed legislation in June. In October, the Eurotower's Governing Council will have to decide whether to start experimenting with solutions for this new currency. Technologically, Blockchain could be the reference system to implement it. That, however, has so far worked only on relatively modest transactions such as those involving bitcoins or, more recently, Nfts. 
The ECB should issue but not distribute the digital euro. "Citizens will not have an account with the ECB or national central banks," Panetta assured, trying to nip in the bud the objections of those who believe the new currency could compete with banks. "The digital euro would be a means of payment, not a form of investment or savings," and there could be "an upper limit for each individual of 3,000 euros," or an amount close to the average gross salary in the euro area.
Just in the weeks when a group of European banks is working to launch a system for making digital, instant payments. The European Payments Initiative (Epi), represents the European attempt to build an instant digital payments system. The idea is to create a single solution for digital payments by leveraging Sepa, or the Single Euro Payments Area. That is, that area-which includes the European Union states plus Iceland, Norway, the United Kingdom and Switzerland-where the same rules and procedures apply for making electronic payments, such as credit transfers. 
On the front of digital payments with the use of blockchain many operators are moving, and one of the most interesting experiments for the level of security and interaction with the world of crypto is given by Conio, the start-up founded by Christian Miccoli, which has created a digital wallet with the advantage of a triple key to guarantee the ownership of the virtual wallet. Distributed as a service by several operators with Banca Generali, it has found the backbone for a successful collaboration. BG Conio's service in collaboration with Banca Generali provides the institution's clients with custody, trading and reporting services related to the world's leading cryptocurrency: Bitcoin. And it allows you to trade in Bitcoin in total autonomy, operating directly through your bank account via the Banca Generali Private mobile banking app.

The ECB together with the national central banks of euro area countries is studying whether to introduce a digital euro. It would be a central bank digital currency, the electronic equivalent of cash. It would flank banknotes and coins, expanding people's choice of how to pay.

THE FEATURES

A digital euro would offer an electronic means of payment available to anyone in the euro area, as secure and easy to use as cash is today. As central bank money issued by the ECB it would be different from 'private money', but you would also be able to use a card or an app on your smartphone to pay in digital euros.

THE PURPOSE

To meet the growing demand for secure and reliable electronic payments. A digital currency issued by the central bank would - according to the ECB itself - be an anchor of stability for the monetary and payment system. A digital euro would also strengthen the monetary sovereignty of the euro area and the competition and efficiency of the European payments industry.

WHERE WE STAND

The investigation phase started in October 2021 and is expected to end about two years later, in October 2023. The ECB is examining possible features and distribution channels of a digital euro, but also its impact on the market. It will then decide whether to initiate the development of a digital euro.