Bundesbank board member Burkhard Balz sees the digital euro as an ideal complement to cash. “These are two sides of the same coin: Even if we may have a digital version of the euro in a few years, the population will continue to ask for cash,” Balz told the German Press Agency in Frankfurt.
He therefore thinks it makes sense that the EU Commission recently presented legislative proposals on both the digital euro and the status of cash at the same time.
Preparations for a digital variant of the European common currency have been going on for years. At the end of June, the EU Commission presented its proposals for a legal framework for the digital euro. The digital euro should therefore become legal tender, but not replace notes and coins.
ECB: Digital euro in 2026 at the earliest
The European Central Bank (ECB) wants to decide in October whether to continue working on a digital euro. According to previous information from the ECB, a digital euro could come in 2026 at the earliest. At the same time, the EU Commission in Brussels wants to use other legislative initiatives to ensure that cash continues to be widely accepted and more readily available.
“The European Commission’s proposal on cash makes clear the great importance that cash has for the economies in Europe. The availability and acceptance of cash should also be guaranteed in the future,” said Balz.
“In conjunction with the Commission’s proposal for a regulation on a future possible digital euro, this will ensure that there is a wide range of payment options in the future. After all, a euro is a euro – be it in cash or possibly as a digital euro “said the Bundesbank board.
“The trend towards digital payment methods will continue. And in my view, the use of cash in Germany will continue to decrease,” predicted Balz. “But these changes – that’s the clear message – will not mean that we as the Eurosystem do away with cash. We stand by cash and will ensure that cash and digital go hand in hand, also in the future.”
Balz: Cash is an indispensable means of payment
For him it is “very clear that cash will remain an indispensable means of payment for most people,” said Balz and assured: “As the central banks of the Eurosystem, we will continue to make cash available in sufficient quantities in all parts of our country.”
Balz emphasized: “The digital euro is to be seen as a supplement to cash and should not replace it. This is not a step towards phasing out cash – expressly not. We continue to stand by cash.”
When asked whether the digital euro shouldn’t come faster, Balz replied: “Carefulness is much more important than speed when it comes to this issue.” Ultimately, a joint approach is needed with the banks: “In my view, we need a close partnership between the public and private sectors for the digital euro: we as central banks are responsible for the infrastructure in the background and the banks and savings banks for the interface to the customer, i.e for the last meters.”
Balz wants to flank the discussion about future payments with a “National Cash Forum”. “I made the suggestion that the Bundesbank set up a national cash forum. The aim is to keep cash as a relatively inexpensive but also efficient means of payment as readily available as possible in an environment that is changing,” said Balz. “We are currently discussing who we think should take part. We would like to invite people in the fall and start the forum in the first half of 2024.”
