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 investors need to know about 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.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.