Across the globe, the use of digital wallets is on the rise. This digital asset is becoming increasingly popular and has been proven to be very efficient, to the point that the European Union has declared that they want to implement it in Europe. The EU will launch the digital wallet next year, making it easier for citizens to make payments across all member states.
A digital wallet is just as it sounds: a digital version of your financial accounts and information. A computer file is stored as a ‘digital wallet’ application on smartphones and computers, allowing for easy access to money wherever and whenever. Through a digital wallet, currency can be sent from user to user without the need for an intermediary in the process. The goal of this is to make transactions easier and faster, as well as more convenient by eliminating the need to physically carry around a wallet.
To utilize the digital wallet, you will have to enter all of the information on your card into the app. The information will be encrypted and used for payments only when your device is unlocked and its use is authorized by you. Some of the most popular digital wallets that you may have heard of include ApplePay, GooglePay, Venmo, and PayPal.
The digital wallet that the EU is releasing will not only hold the information to all of your forms of payment and make transactions easier, but it will also serve as a storage location for your personal information such as your passports and driver’s license if you wish to include them. The EU has made it clear that privacy is their top priority in the creation of this wallet. That being said, there will be a design in the app that makes sure that third parties cannot get access to valuable data in any way.
The question that goes with the creation of a digital wallet for the EU is: will a digital euro be created as well?
The European Central Bank has decided that issuing a digital euro is not the route that they want to take at the moment. The bank came out saying that their goal when it comes to creating a digital euro is: “avoid dependence on digital means of payment issued and controlled from outside the euro area, which might undermine financial stability and monetary sovereignty.”
While this is true, the EU is exploring the pros and cons of implementing a digital euro in the future. A few other countries are beginning the process of creating their own forms of digital currency, including China and the Bahamas. If the EU were to implement a currency of their own, a currency covering the 27 member countries, it would be the largest Central Bank Digital Currency to date.
Goschenko, Sergio, and Coins. “European Union to Release Digital Wallet for Payments Next Year.” Bitcoin News, 3 June 2021, news.bitcoin.com/european-union-to-release-digital-wallet-for-payments-next-year/.