Over 70% of compliance specialists within Ireland’s financial services sector have voiced concerns that the proposed digital euro could make consumers and businesses susceptible to cybercrime and technical issues, as per a recent report. This investigation, carried out by the Compliance Institute, surveyed 175 compliance professionals, mostly working in Irish financial establishments, and revealed that over 60% don’t see the requisite for a digital euro.
The discussion surrounding the digital euro, classified by the European Central Bank (ECB) “as an e-cash solution for a digital world”, was analysed in this study. November 2023 witnessed the ECB embarking on preliminary work for the virtual currency, with 2026 indicated as the earliest potential launch year.
Data protection and privacy issues ranked among the top potential risks, concerning over half of the respondents, if the digital euro becomes a reality. On a positive note, around 50% conceded that this form of currency could result in benefits such as reduced banking costs, improved convenience, and transaction efficiencies.
Chief executive of the Compliance Institute, Michael Kavanagh, expressed that a measly 6% of participants stated no worries regarding the digital euro, indicating the ECB has a significant task to alleviate concerns ahead of any launch. He further explained that the intent behind the digital euro is to offer consumers the choice to utilise central bank funds in a digital manner, supplementing traditional banknotes and coins.
Alarmingly, the study discovered concerns regarding a possible decline in cash availability following the currency launch, the likelihood of financial loss, especially due to technical faults that hinder cash access, or becoming a victim of fraud. Notably, nearly half expressed fears that the digital euro might empower tech and fintech corporations exceedingly.
When questioned about the principal benefits of the digital euro, 20% couldn’t identify any advantages concerning its implementation. Interestingly, nearly 60% predicted that it would bring about more streamlined transactions, with a similar proportion suggesting the digital euro’s convenience being one of its key selling points.
The notion of turning to a digital euro as an alternative to reduce banking and transaction costs seems plausible to half of the population, as per the original text. This implies that they believe it would be a more economical method for both customers and businesses to handle transactions and transfer money.
However, the safety of this idea doesn’t convince everyone, as indicated in the original text. One out of every four individuals believes that it would serve as a more secure substitute to physical cash and card transactions. In contrast to existing currency, 30% of people believe a digital euro would be harder to counterfeit.
Mr Kavanagh commented that the European Central Bank (ECB) stated the digital euro would be a convenient alternative since it provides universally accepted digital payment that can be used across the euro region for transactions in brick-and-mortar stores, online, or between individuals.
He also pinpointed that the Eurozone already benefiting from a plethora of digital and electronic payment methods, including touch-free payments through mobile phones and electronic bank transfers. Hence, it is not surprising that a significant number of professionals in the regulatory sector see the digital euro as already irrelevant.
He further emphasized that the ECB would have its work cut out for itself in convincing both Irish and European citizens at large that adopting a digital euro would be safe, inclusive, and easy to use. This is due to the consistent uncertainties hovering around the digital euro.
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