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BoF: Digital euro at least five years away

The European Central Bank says a digital euro would give people free access to a simple and safe means of payment.

Tuomas Välimäki
It will be five years before people carry digital wallets with cyber euros, according to Tuomas Välimäki of the Bank of Finland. Image: Niklas Fagerström / Yle

The European Central Bank (ECB) has embarked on a project to create a digital version of the euro, but the Bank of Finland (BoF) said it could take half a decade for a digital euro to become reality.

Tuomas Välimäki of the Bank of Finland on Friday said the introduction of a digital euro would not greatly impact everyday life in Finland.

"We've been accustomed to digital payments for a long time in Finland, so it wouldn't be much of a change here compared to countries where 80 percent of retail transactions are in cash," he explained in a press briefing on Friday.

A 2018 report by the BoF found that only 10 percent of people in Finland use cash.

"I wouldn't expect us to see digital euros in our cyber wallets for another five years," Välimäki said.

Two-year initial project

On Wednesday the European Central Bank said it was launching a two-year inititaive to explore the feasibility of a digital euro. The virtual currency would, according to the ECB, be an electronic form of money issued by the Eurosystem (the ECB and national central banks) and accessible to all citizens and firms.

"The premise is that the digital euro will not replace cash, but rather complement it," Välimäki said.

The ECB is under pressure to meet growing demand for electronic means of payment. Välimäki conceded that the rise of private digital currencies such as bitcoin has signalled how rapidly the payments sector is evolving.

This spring China launched its own cyber currency, the digital yuan.

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