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“Questions posed by citizens, banks and firms regarding the project of the digital euro of the European Central Bank and the European Union are all legitimate and expected. Although cash is still the dominant means of payment in Croatia, accounting for 72% of all transactions – every third of four transactions in 2022 was a cash transaction – the use of cash has been decreasing and in terms of value fell to 45% in 2022. In 2022, the value of card payments for the first time exceeded the value of cash payments. In this context, the project of the digital euro makes sense and it is our responsibility to explain to the citizens all the advantages of the digital euro, and we will certainly pay great attention to that”, said Governor of the Croatian National Bank Boris Vujčić on Friday in Ljubljana, participating in the panel discussion hosted by Banka Slovenije “Digital euro: Cash meets technology”. Boštjan Vasle, Governor of Banka Slovenije gave the introductory speech and Simon Anko, Director of the Payment and Settlement Systems Department at the Slovenian central bank presented the development of the project of the digital euro. Marko Pahor, Vice Governor of Banka Slovenije moderated the panel, which included the participation of Peter Kažimir, Governor of Národná banka Slovenska, Madis Müller, Governor of Eesti Pank, Edward Scicluna, Governor of the Central Bank of Malta and Gediminas Šimkus, Governor of Lietuvos bankas.
Talking about the benefits of the digital euro for consumers, the CNB Governor gave an example of one of the benefits. “Imagine a situation where three people meet in a bar during the 2024 European Championship in Germany, for instance, the governors of the central banks of Slovenia, Lithuania and myself. And we want to a) split the bill, b) make a POS instant payment to pay for the drinks in the bar and c) buy tickets online for the next football match. Currently we do not have a universal payment solution that could be used in all the three instances and this is exactly what the digital euro would offer. If we want to split the bill, the only convenient and free of charge solution, apart from physical cash, would be if we all had accounts in the same bank, which is probably not the case since we come from different EU member states. Other solutions are only national and of no use to us, so the only solution is to use a mobile-initiated SEPA credit transfer. The splitting of the bill could be made via a SEPA credit transfer using a mobile banking application by entering or scanning the payee’s IBAN, not an offline solution. Whereas, the digital euro could be used offline. Then we have POS instant payments, which are dominantly executed through Visa or Master cards, irrespective of whether we have a physical card or use Apple Pay or Google Pay Wallet. But this is not an instant payment and not a European payment scheme; unfortunately neither of them exists as a pan-European solution. And finally, even if we have settled in cash, to purchase the tickets for the next match we have to go online, which takes us again to Visa and Master. Again, neither of these solutions is a European one and neither covers all the three cases of use while the digital euro could be used in all three of them”, said Governor Vujčić, explaining anecdotally and practically the digital euro from the perspective of end users.
Asked by the moderator if the digital euro, similarly as the existing online payments, would involve a compromise in security safeguards, Vujčić responded affirmatively, noting that the digital euro would be a step forward both in terms of privacy and security. “Firstly, the technology of the digital euro guarantees a greater degree of privacy than current online payments, and we can also say that privacy will be better safeguarded since public institutions such as the EU, the ECB and national central banks are more open to public scrutiny than private companies currently operating online or digital payment systems. The same applies to payment security and the security of the whole infrastructure”, noted Vujčić, adding that he understands the concerns of the banks regarding a possible run on the banks once the digital euro is introduced. “I understand these concerns, but I can say that they are unwarranted because the digital euro is not meant as a means of savings, only as a means of payment, which means that no deposit interest will be paid on the limited funds held in that account. Also, the banks providing the service of the digital euro will be remunerated by the ECB”, explained the CNB Governor. In his closing statement, Governor Vujčić underlined the digital euro as an important, huge and good project and expressed his optimism regarding the technical implementation of the project. “Here I hold to the maxim that there is no problem within the realm of possibility that a good engineer could not solve”, concluded Boris Vujčić.