What are the concerns about the introduction of the digital euro?

The digital euro should become legal tender in the eurozone along with banknotes and coins. In addition, Brussels is working on a proposal to regulate the access and use of financial data. It is expected that a decision on these issues can be made at the end of June 2023. 

The European Commission (EC) and its president, Ursula von der Leyen, want to make the new digital euro legal tender. The reasons for this are called a sharp increase in the volume of online trading and a decrease in cash payments. At the same time, the number of digital currencies issued by states outside the EU and private companies is increasing. According to the EC, this state of affairs threatens the balance between the money issued by the European Central Bank (ECB) and private means of payment. The introduction of the digital euro should solve this problem.

At the EU level, it is planned to adopt laws allowing the digital euro to be introduced into circulation. The very same decision on this should be made at the level of the ECB and the national banks of the eurozone countries.

However, the introduction of the digital euro into circulation raises certain doubts in European countries, in particular in the Netherlands and Germany. Fears, in particular among the Dutch parliamentarians, are caused by four questions:

1. Does the problem that the introduction of the digital euro is trying to solve really exist and is it urgent?
2. Will banking information be kept confidential?
3. Will the ECB gain control over the digital money of citizens and companies? In particular, it is feared that digital euros will not be able to be used to purchase goods and services that the EC considers harmful to the environment, after a decision has been made.
4. Will the digital euro become a new lever of ECB pressure on national and private banks?

The EC and the ECB assure that the problem exists and the fears are groundless. However, proposals by the EC to allow financial service providers to use customer data to promote their new products only heighten concerns. True, the EC promises that the client will need to obtain consent to the use of his data. But how it will be in reality, only time will tell.

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