Presentation on the Digital Euro: the future of our currency

The Central Bank of Cyprus held its first press conference on the digital euro on Tuesday, 9 July 2024, since accurate information and transparent communication from the Central Bank are key for ensuring that the general public fully understands the digital euro.

In his welcoming address, the Governor of the Central Bank of Cyprus, Mr. Christodoulos Patsalides, pointed out that, the Eurosystem is looking into a possible issuance of a digital euro, as almost all central banks around the world are similarly carrying out work in this direction. The Governor emphasised that while the Eurosystem prepares for the future of the euro, the well-being of citizens remains its ultimate goal. This aligns with the Central Bank's vision, which he recently announced to the media: "to be a leading organization offering services to the citizen".

Mr. Piero Cipollone, member of the Executive Board of the European Central Bank and Chairman of the 'High-Level Task Force on the Digital Euro', in his video address emphasised that “Cyprus attracts millions of tourists every year. Tourism is a significant part of your economy, creating jobs and opportunities for everyone. And making payments is a key part of our lives, including when we are on holiday. At present, European tourists who do not wish to pay with cash are entirely dependent on non-European payment methods for transactions with Cypriot hotels, restaurants, taxis and other services. This lack of alternative solutions forces local merchants to accept these non-European payment options, and the resulting lack of competition naturally drives up the costs they must bear. This is why the Eurosystem is now working on a digital euro, which would give consumers an additional payment option that complements cash”.

The presentation of the digital euro was made by the Acting Senior Director of the Banking Operations Division of the Central Bank of Cyprus, Mr. Stelios Georgakis, who explained through concrete examples why the digital euro is a key pillar in our journey towards truly European, innovative, instant and seamless retail payments. Mr. Georgakis clarified that the Eurosystem is conducting preparatory work in order to be able to issue the digital euro if and when it is deemed necessary, and only after finalisation of the Single Currency Package of the European Commission, whose goal is to establish and regulate the digital euro, if issued, as well as to preserve the physical form of euro banknotes and coins.

In summary, Mr. Georgakis highlighted the main points of the presentation. In particular:

• The digital euro would be the natural evolution of our currency in the digital sphere, combining the benefits of electronic means of payment with the unique attributes of cash.
• We are examining how to make our currency digital. The way people prefer to pay is changing and it is important for our currency to evolve in parallel. It would complement - not replace - cash.
• The digital euro is a European initiative that would offer something that does not exist today: a truly European digital means of payment universally accepted throughout the euro area; it would be endowed with the status of legal tender; it would offer the highest privacy levels and it would protect the personal data of users.
• No matter what, the euro will continue to be reliable money. Either in digital or physical form, 'one euro will always be one euro'.
• The Eurosystem would not change the existing relationship of clients with their payment service providers: licensed and supervised banks, payment institutions and electronic money institutions would offer to their clients an additional means of payment, this being the option of public money.
• Merchants would have immediate access to funds received from digital euro payments, while they would be in a better bargaining position for lower fees than the ones they bear today.

After the close of the presentation, the attendees had the opportunity to ask clarifying questions.