The Council of the European Union (EU) has decided to support giving its digital euro CBDC the functionality to work in both, online and offline ecosystems. The requirement for the CBDC to perform better and see a wider adoption was first brought to light by the European Central Bank (ECB) earlier this year and now the EU Council has also come onboard.
The EU is among the most regulated regions for crypto in the world with its MiCA laws. The leaders of EU are now looking to position the digital euro CBDC as a very usable companion to the euro cash currency. The ECB will oversee the issuance and maintenance of the digital euro CBDC – aiming to protect the ‘physical money’ and reduce reliance on paper notes.
Talking about the CBDC the EU said, “It will be usable both online and offline, ensuring functionality even without an internet connection, while providing a high degree of privacy.”
The ECB is aware that if people started using the CBDC as a ‘store of value’, it could destabilize banks. Owing to this, the banking authority plans to cap the amount of money individuals and corporates would be allowed to hold in the form of the digital euro.
“While the legal framework is still being finalized, the ECB has suggested the digital euro could be operational by 2029,” the official press note by the EU Council said.
Retailers, however, will be strictly advised against refusing cash to prefer the digital euro to prevent private payment providers like Visa, Mastercard from dominating the payment space by facilitating transactions via the digital euro.
The Council will now begin negotiations with the European Parliament to turn these positions into final EU law, the official statement said.
CBDCs or Central Bank Digital Currencies like EU’s digital euro, India’s eRupee, and China’s eCNY among others can be explained as the blockchain representation of fiat currencies. Transactions processed in CBDCs leave a permanent record on the subsequent blockchain – bringing financial transparency and also facilitate cross-border transactions in real time – improving efficiency. Uganda, France, and Rwanda are among other nations working on their respective CBDCs.
U.S. President Donald Trump, however, is totally against creating a CBDC for the US dollar. He believes that the use of CBDCs in financial transactions could bring more oversight from the authorities into people’s financial habits and become a hindrance in privacy.