The European Central Bank (ECB) has announced its commitment to preserving the euro cash system in light of a growing preference for non-cash payment methods. According to a recent study by the ECB, 59% of all point of sale transactions in the eurozone are still made in cash, and 22% of consumers surveyed stated that it is their preferred payment method. The study revealed that the main advantages of cash payments are the increased awareness of spending and the anonymity of transactions, which were cited by 40% of respondents each.
Despite the growth of digital payment methods, the ECB plans to redesign euro banknotes by 2024, signifying its long-term commitment to physical currency. In a blog post, the ECB stated that “a healthy payment system guarantees access to different payment options as well as the freedom to choose.”
The announcement aligns with recent remarks by ECB Executive Board Member Fabio Panetta, who stated that the proposed digital euro will complement, not replace, other payment methods including cash. The issue of cash policy has recently been a topic of political discussion in several countries in the eurozone, with some governments taking steps to protect cash access and usage.
Despite this, several European nations are embracing digital currencies. Spain is home to the first euro-denominated stablecoin, the EURM token, which is being issued by Spanish FinTech firm Monei and is currently in its pilot stage. If successful, it will be the first digital token to receive approval from the ECB, giving Monei an advantage over other euro-denominated stablecoins. The entry of Monei into the market comes at a time when EU policymakers are becoming more vocal in their opposition to unregulated crypto assets.
In conclusion, the ECB has emphasised its commitment to preserving the euro cash system while recognising the growth of digital payment methods. The bank’s stance on cash policy, along with the emergence of euro-denominated stablecoins, shows a gradual shift towards the integration of digital currencies in the eurozone.
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