The European Union is getting closer and closer to fully digitalizing its currency with each passing day. Since theprioritize beginning of the year 2020, the term CBDC, which stands for Central Bank Digital Currency, has been bandied about quite a bit. This is because CBDC is a relatively new concept. The new digital euro is planned to be issued somewhere next year with the great likelihood of it launching in the first quarter.
According to the spokesman of the European Union Central Bank, the organization views three primary applications:
P2P payments for transactions that are not related to the operations of a business, such as sending money to friends and family;
Payments made to businesses in exchange for the goods and services they provide, whether those transactions take place online or in traditional stores;
Taxes, levies, and payments made to the government for various services are examples of monetary transactions that include governmental bodies.
It is likely that the currency will also be used to pay employees, and that in the future, components of DeFi may be incorporated to promote faster economic growth and more dynamic business development. Both of these things are possible. The spokesman proceeded by saying that the organization has not yet made a decision regarding whether or not it would employ blockchain technology or some other type of technology to establish the foundation for CBDC.
The strategy that is being used right now is called “functionality first, technology second.” The fact that CBDC will not prioritize the implementation of any web3 aspects is yet another significant aspect of the announcement. Instead, the emphasis will be placed on enhancing the overall user experience while also ensuring the users’ safety. The deployment of web3 is on the agenda, but it is not among the
most pressing prioritize
A slow, deliberate technique that involves a large number of consecutive steps is one that many experts believe could be counterproductive. Many people point out that previous attempts to introduce CBDCs were unsuccessful because developers were slow to roll out features that would convince users that new digital currencies are better than what we have now. This is because CBDCs are decentralized, meaning that no central authority controls their creation or distribution (cash or debit cards).
On the other hand, it is essential to give careful consideration to the various use cases that could potentially arise and to make certain that the initial functionality is alluring enough. It is my hope that the European Central Bank will give successful cryptocurrencies a closer look and explore adopting blockchain technology to make decentralization simpler in the future while maintaining compatibility with existing popular networks. Take note that a significant number of establishments located within the EU as well as online businesses have already begun to accept payments in cryptocurrencies!