December 5 (UPI) — Signs of reduced cash use could speed up the implementation of digital currency programs, according to a secret document from the European Central Bank (ECB), according tomedia reports. Inspired and alarmed by Facebook’s digital cryptocurrency Libra project, plans to create a european public digital currency are beginning to emerge.
Currently, U.S. credit card companies dominate card payments in the European Union, and there is no common system to reduce the cost of fast transactions in the 28-nation bloc.
If industry efforts fail to develop an innovative and efficient pan-European payment solution, the document says, social needs may have to be met by issuing central bank digital currencies.
EU finance ministers will discuss the document on Thursday and are expected to issue a joint statement welcoming the ECB’s possible digital currency programme.
Last month, an ECB official said several plans for digital currency projects had been studied. Under the most radical scheme, users of the new digital currency would be able to open an account directly with the EUROPEAN Central Bank. This would reduce transaction costs, but would make existing banking and payment services redundant.
Under a more modest plan, the ECB could offer e-cash or tokens to banks, the official said. The bank can then distribute electronic cash or tokens to customers. The official also stressed that the work was still ongoing and that a number of technical and legal challenges remained.