Roadmap to a Digital Programmable Euro: Why Europe Must Act Now

Industry representatives have proposed a roadmap to a digital, programmable euro. The clock is ticking; other nations are way ahead. Why Europe must act and why INVAO supports the proposal.

Industry representatives have proposed a roadmap to a digital, programmable euro. The clock is ticking; other nations are way ahead. Why Europe must act and why INVAO supports the proposal.

Europe has been discussing the digital euro for more than one year now. Several industry associations have already called for it, and it has supporters in the European government. Still, not much has happened so far.

Representatives of the blockchain industry, the financial sector, and other industries have now proposed a concrete roadmap for the digital euro in an open letter to meet the requirements of industrial companies, financial organizations, retailers, and consumers. Professor Philipp Sandner from the Blockchain Center of the Frankfurt School of Finance launched the initiative. 

One of the reasons for the urgency is that other nations are already much further ahead than Europe in terms of digital currencies. China, for example, was the first major economy to launch the digital yuan in early 2020, which is now being used in retail stores and to pay government officials. The Libra Association is also working intensively on various programmable currencies, including a digital euro. 

“Organizations and institutions in Europe should intensify their effort to avoid a situation where the digital programmable Euro will be run on infrastructure that is entirely or in significant parts organized by non-European organizations,” the letter says.

Europe’s competitiveness is at stake

A digital euro would be much more than just another electronic means of payment. Its advantages are particularly relevant in the commercial sector, because a blockchain-based means of payment is “programmable,” meaning smart contracts can completely automate payment transactions. 

Smart contracts could, for instance, automate interest payments, loan repayments, payments to and from escrow accounts, leasing, factoring and much more. Machines could also make payments directly to each other in the “Internet of Things.” A self-driving car could, for example, autonomously process a payment transaction at a gas station. 

The higher degree of automation would increase economic efficiency, speed up processes, and reduce costs. International money transfers could arrive within milliseconds, and at a minimal cost. 

The letter thus refers to “Europe’s competitiveness in the digital age. [..] We cannot afford to miss this huge opportunity in Europe.”

Roadmap to a digital programmable Euro

The proposed roadmap starts with building knowledge and conducting studies this year to define the technical and systemic requirements of a programmable euro. By Q2 2021, the link between a blockchain-based payment platform and the legacy systems of the financial industry should be established.

By Q4 2022, the private sector should develop a cross-industry euro token standard enabling a digital euro as a means of payment. Finally, by Q1 2024, the infrastructure should be in place so that the European Central Bank can issue a public digital euro.

The goal of this roadmap is not to replace the fiat euro as a means of payment, but to create a digital complement that will increase the efficiency of economic processes. The euro will continue to exist in its current form.

INVAO supports this initiative because we are convinced that blockchain technology will play a key role in the future of the European economy. It’s about connectivity, efficiency, and international competitiveness. Europe has the know-how, the resources, and the economic power to take a leading role in blockchain worldwide. We must now seize this opportunity. 

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