Home Tech News What technology will the digital euro, Europe’s new cryptocurrency, use?

What technology will the digital euro, Europe’s new cryptocurrency, use?

What technology will the digital euro, Europe's new cryptocurrency, use?
The European Central Bank is preparing its cryptocurrency as an additional form of payment.

Europe is preparing to have its own cryptocurrency, which in this case would not be owned by a private organization but by the European Central Bank (BCE), which confirmed the development of this proposal with which they seek to provide a different form of payment and function differently against other currencies such as Bitcoin.

Christine Lagarde, president of the organization, assured that they are already working with the European Comissionthe European Parliament and several finance ministers for the consolidation of this currency, which would be regulated in 2023 and would come into operation in 2025 or 2026.

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The differences between the digital euro and the other cryptocurrencies

Since this new money format arrived, several problems have been mentioned, such as the ability to take data from users, go unnoticed in transactions and the volatility they have.

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However, at the ECB they want their currency to work differently, especially when it is under the control of an official organization, which modifies a large part of its operation.

“The digital euro will be central bank money, backed by a central bank and designed to respond to the needs of citizens. You need to be risk-free and respect privacy and data protection. Central banks have a mandate to maintain the value of money, regardless of its physical or digital form,” he said. lagarde.

The European Central Bank is preparing its cryptocurrency as an additional form of payment.
The European Central Bank is preparing its cryptocurrency as an additional form of payment.

This means that there will be greater regulation, control over volatility and data protection for users, since they ensure that the digital euro “has no interest in collecting payment data, nor in monitoring payment behavior or sharing such data with government agencies or other public institutions.

To comply with that privacy, it will be necessary for people to identify themselves and then choose the degrees of protection they want in their payments, allowing only financial intelligence units to obtain that information within the legal framework.

This will allow anonymity to not exist, with the aim that it does not become a weapon for transactions that help terrorist activities and fraud.

“Total anonymity does not seem like a viable option. It would contravene other public policy objectives, such as ensuring compliance with anti-money laundering regulations and combating the financing of terrorism. It would make it practically impossible to limit the use of the digital euro as a form of investment, for which it is necessary to know the identity of the users”, said the ECB president.

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The European Central Bank is preparing its cryptocurrency as an additional form of payment.
The European Central Bank is preparing its cryptocurrency as an additional form of payment.

Another way to pay

This digital euro would not replace physical banknotes and coins, but would add to the current transaction scheme, even for small purchases, something that also differentiates it from the cryptocurrencies that are currently on the market.

According to data from the organization, the projection they have with the system in which this currency will work, the Eurosystem TARGET Instant Payment Settlement (TIPS), is that it will be able to process more than 40,000 transactions per second

This figure is much higher than other digital currencies. For examplebitcoin reaches three per second and ethereum about 12. Which allows a greater flow and mass for daily use.

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