During the presentation, Witlox discussed the advantages of a digital euro as a supplement to cash in Europe. They said that it would increase strategic autonomy by decreasing reliance on non-European payment providers and give a different, safe, and reliable means of transaction for Europeans.

According to Witlox, the digital euro is being developed with resilience and privacy characteristics to stop fraud and ensure safe transactions. It will function both online and offline.

"We're going to construct something cutting edge and future-ready. It will center on effective payment methods, with three use cases for peer-to-peer and in-store transactions as well as e-commerce payments that consumers in the euro area can access. The digital euro will guarantee high conversion rates and provide retailers peace of mind that customers can pay for their purchases. Since the digital euro allows for rapid settlement, the digital euro will have transferred from the payer to the payee as soon as the transaction is completed. That indicates an immediate receipt of the money.
 

Regarding the digital euro's future, Witlox said that during the research stage of creating the digital currency, project teams communicated with market participants, the European Retail Payments Board, civil organizations, and central banks. Since November 2023, the digital euro has been in the planning stages, developing concurrently with regulations. Most likely, the next phase will start in 2025.

What will be achieved by the digital euro?

A panel featuring Evelien Witlox of the European Central Bank (ECB), David Birch from CHYP, Michael Salmony from ETPPA, and Fredrik Rydbeck from Sveriges Rksbank discussed the potential of the digital euro. The session was facilitated by Nilixa Devlukia, the founder of Payments Solved.

Salmony opened the conversation by outlining the many advantages he sees for an EU CBDC, including the ability to have a pan-European payments system that is instantaneous, reversible, and less expensive. He did, however, express doubt about the necessity of a government-led solution in light of the emergence of alternative private efforts. Additionally, he mentioned that the use of APIs and the way fintech would be able to start payments and use the data are what piqued his interest in CBDC.

Speaking from the perspective of a central bank, Rydbeck stated that they seek to avoid increasing risk.

There are other methods to introduce a product, but generally speaking, central banks haven't done so with the same fervor as, say, the digital euro initiative. As a company, what we have observed thus far is that plans are created and adhered to, but some of the early releases that we have witnessed have been hurried, and it is evident that there is a mismatch in terms of product and market fit. He went on to say that central banks face a significant difficulty since they lack the luxury of launching goods, trying them, failing quickly, and changing course, unlike fintechs and startups.
 

Birch echoed Salmony's comments regarding competition and went on to say that while political domestic sovereignty has its advantages, there are also social and economic issues pertaining to sustainability and inclusiveness that must be taken into consideration when the digital euro is developed.

According to Birch, in order for central banks to successfully implement digital money in a way that informs people about its functionality, they must have a greater understanding of the technology.

We don't really know what we want the digital currency to be able to perform, therefore all of the pilots and experiments that have been conducted up to this point are essentially useless. I can say with certainty that your team will never use the same technology as the sand dollar to construct a digital euro. I think we are a long way from liberal understanding in order to gain the necessary engagement from society. When you implement digital currency, people will inquire if you plan to implant microchips in us. What has the 5G dispute taught us, in your opinion? Therefore, the quality of input required to make these decisions is nothing near the level of public debate.”
 

According to Witlox, the digital euro should be released gradually to allow consumers time to become familiar with its capabilities and make sure the market is ready.

Returning to the topic of competition, Salmony shared his thoughts on what excites him the most about CBDC, namely the idea of offline payments and what it means:

"Regardless of where we are banking, I believe that sending money from one phone to another throughout Europe is an incredibly exciting scenario that is instantly understood by everyone and hasn't been solved by market competition thus far. This is a chance to present and tokenize money, or a contemporary kind of currency. That is a particularly fascinating variation of the CDBC, in my opinion. However, there is a debate as to whether doing so results in sovereignty: are we completely autonomous when I tap my Apple phone into your Android phone? Will we genuinely switch to a tokenized version as that doesn't appear to be the case right now?In addition, the dead bodies of unsuccessful digital wallets are all over the European payment landscape, so I really hope this one succeeds since it's something we could really use.

Birch concurred with Salmony, stating that an innovative and captivating product is operating offline.

At last, the topic of digital identification came up, and how, when the digital euro is implemented, there needs to be a digital identity infrastructure in place to prevent fraud and theft. Rydbecks concurred and stated that a seamless and safe authentication process is necessary for payments to be successful.

Salmony reiterated that the first step ought to have been identify. In the digital payments and e-commerce area, identity theft and payments fraud are major problems since digital identity is being addressed too late and having an authenticated form of identity is only now beginning to be determined.