Digital Euro
Kartavya Desk Staff
Source: TH
Context: The European Central Bank (ECB) has introduced the digital euro as a central bank digital currency (CBDC) aimed at revolutionizing payment systems.
About Digital Euro:
• What it is: A CBDC issued directly by the ECB, enabling digital transactions without intermediaries like banks or payment gateways.
• Launch: The preparation phase began in November 2023, with a focus on replacing cashless payment systems and reducing dependency on non-EU financial service providers.
• Features:
• Facilitates direct payments via digital wallets. Allows both online and offline transactions, ensuring anonymity for offline payments. Offers cost-effective micropayments by bypassing conventional service providers. Emphasizes European sovereignty in digital payments by reducing reliance on foreign financial entities.
• Facilitates direct payments via digital wallets.
• Allows both online and offline transactions, ensuring anonymity for offline payments.
• Offers cost-effective micropayments by bypassing conventional service providers.
• Emphasizes European sovereignty in digital payments by reducing reliance on foreign financial entities.
About India’s Digital Currency:
• India launched its Central Bank Digital Currency (CBDC), e₹ (Digital Rupee), under the Reserve Bank of India in 2022.
• Features: Legal tender backed by the RBI, exchangeable 1:1 with physical currency. Operates through blockchain-based wallets for seamless transactions. Reduces costs associated with handling, transporting, and phasing out physical currency.
• Legal tender backed by the RBI, exchangeable 1:1 with physical currency.
• Operates through blockchain-based wallets for seamless transactions.
• Reduces costs associated with handling, transporting, and phasing out physical currency.
• Significance: Mitigates risks of cryptocurrencies by providing a regulated digital alternative. Simplifies cross-border payments and enhances transaction efficiency. Boosts financial inclusion by enabling digital transactions for the unbanked.
• Mitigates risks of cryptocurrencies by providing a regulated digital alternative.
• Simplifies cross-border payments and enhances transaction efficiency.
• Boosts financial inclusion by enabling digital transactions for the unbanked.
Insta Links:
• Project-GAIA