The European Union (EU) will launch a digital wallet application that allows citizens from the countries of the union to pay and access services provided by each state, to store their digital identity information. The wallet, which is reportedly due to be launched next year, could be linked to the digital euro project, a proposal for a central bank digital currency (CBDC) that the ECB is still working on.
The European Union is preparing to launch a digital wallet next year
The European Union plans to launch a digital wallet that will allow its citizens to make payments with minimal contact in all member states. According to a report by Reuters, the wallet will launch next year and will combine private and public services under a single app.
The wallet will serve as a form of payment and identity, allowing users to store digital equivalents of physical documents such as passports or driver’s licenses, integrating other government-related services. The identity of the wallet will be verified using biometric data such as fingerprint verification and retinal scans, using computing power and sensors that mobile devices already have.
The European Union is said to be considering the privacy of its users: the Union will design the app in such a way that data from users is partitioned, ostensibly to ensure that this valuable data is not used by third parties for advertising or other purposes.
Although the European Central Bank has not yet decided to issue a digital euro and is still in the process of investigating the effects of Central Bank Digital Currencies, this wallet could be useful for using such currencies. Together with the application, the digital euro could enable the European Union to regulate the rise of other unregulated digital currencies.
The European Central Bank stated that one of the main goals of issuing a digital euro will be to:
Avoid dependence on digital payment instruments that are issued and controlled outside the euro area, which could undermine financial stability and monetary sovereignty.
If the system is actually implemented, it will be the largest digital CBDC to date, covering the 27 member states of the European Union under its domain. But this won’t be the first. The Bahamas and China are already in the process of issuing their own digital currencies.