The European Central Bank (ECB) is working on a digital euro but it will still be some time before the virtual currency will see use.
Let’s take a look at everything investorsneed to knowabout the digital euro and ECB’s possible plans.
- The ECB will likely be setting up a wallet to hold the digital euro for citizens.
- That could include holding limits to keep people from abandoning commercial banks.
- This would likely be similar to how a digital bank account works.
- However, a major difference is that the ECB has no worries about running out of funds.
- One thing to note is that there’s no guarantee that the ECB will use blockchain for the digital currency.
- That seems like a strange choice considering the massive adoption of the technology by cryptocurrencies such as Bitcoin(CCC:BTC-USD) and Ethereum(CCC:ETH-USD).
- It’s also unlikely that users will be able to remain anonymous when making purchases with the currency.
- While the switch is likely happening, it won’t be for some years.
- The ECB has entered an investigational phase concerning the currency.
- This will last for 24 months.
- The ECB also still needs to design the digital euro and have it approved by regulators.
- That means people won’t likely be using the digital currency for at least five years.
- When they do, the ECB claims that the digital euro will be environmentally friendly with energy use for it being negligible.