De Nederlandsche Bank (DNB) has decided to play the leading role with research and development for both its own and the European Union Digital Currency. It was originally decided by the Dutch central bank that the Netherlands would be a suitable ground to test the digital euro. Owing to the 45-page report, it is surmised that the introduction of the digital Euro will not only help cross-border payments take a swift pace but also will cut down cost which is involved during these payments.
Purpose of Introducing the Digital Euro
According to the DNB, the cryptocurrency Libra is a threat to the economy of the Netherlands. This is one of the reasons for the issuance of its own digital currency. Possessing the digital Euro would mean keeping every Libra threat at bay.
Will the Digital Euro Aid to Phase Out the Crisis Caused by the Pandemic?
The issuance of the digital Euro by the DNB will also help with the crisis galore caused by the COVID-19 pandemic throughout the nation. It is reported that digital currency is overshadowing paper money. Digital currency is now being considered safer than physical money which increases the risk of transmission of the virus from one body to the other as transaction via paper money reduces distance and results in contact between people.
It has also been reported that in the scenario of the pandemic where all the business sectors are closing down, the ones who have not ceased yet are encouraging digital transactions over cash.
Status of Other States on the Digital Euro
Other nations like France are about to experiment with the digital euro with the support of the European central bank. Moreover, DNB wishes the cooperation of the member states in case of any decision taken regarding the incorporation of the digital currency in their economy.