While the European Central Bank is exploring the possibility of issuing a Europe-wide CBDC, a digital euro, not all Europeans are fully behind the idea. Germany is particularly concerned about the privacy implications of such an implementation, as most transactions and payments are still made in cash and citizens are reluctant to share their personal information.
Germany Not Fully Confident in Digital Euro Over Privacy Concerns
The digital euro is gaining traction in certain parts of Europe, with Germany being one of the countries where citizens are concerned about their privacy and even reluctant to share personal data when making payments, according to Bloomberg.
In Germany, most transactions (51%) are still completed in cash, according to Bundesbank data, making it the preferred payment method. Debit card payments are a distant second, accounting for just 27% of transactions. Mobile payments account for 6% of these transactions.
This preference for cash has been acknowledged and described as “sacred” by Bundesbank President Joachim Nagel. This is also reflected in a survey that found that only half of Germans are willing to use a digital euro while the other half probably would not or definitely would not use it.
The European Central Bank said it would address these concerns by using encryption to make transactions and initial users unlinkable. Additionally, to make the digital currency more accessible to more people, it plans to issue a digital token tied to the euro, making it easier for less tech-savvy users to join the ecosystem.
Nagel explained that a digital euro would not eliminate cash and would be a complement. In July, he stated:
The older generation — which I will soon be a part of when I turn 60 — is so digitally savvy now that honestly, I don't really need to communicate with them anymore. They understand what's going on.
However, no decision has been made yet on whether the currency will be issued. A final resolution is expected by the end of 2025.
What do you think about Germany and its stance on a digital euro? Let us know in the comments below.
