The European Central Bank (ECB) has announced steps towards a digital euro, intending to cut paper note circulation by 50%. This initiative aims to modernize the EU's financial landscape and reduce reliance on cash.
As digital currency is introduced, a decrease in bank deposits and cash demand is expected. The ECB highlights the necessity of harmonizing digital euro payments across the euro area.
This digital euro development mirrors global trends in digital currency adoption, notably seen in countries like the Bahamas and China. The shift may also challenge euro-backed stablecoins, impacting cross-border trade and currency settlements.
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