Q21: Would people have to pay to use the digital euro?
The European Central Bank answers:We answer them:As a public good, the digital euro would be free for basic use by individual users.
Banks or other payment service providers could offer their customers additional, paid digital euro services. Such value-added services could make the digital euro even more attractive to users, for example for making conditional payments. These could allow customers to shop safer online, with money only being transferred when the delivery of the product has been confirmed, thereby reducing the risk of fraud and simplifying refunds.
Even the absence of direct costs for end users cannot hide the fact that there are significant underlying expenses associated with the implementation of a digital currency. These include the costs of initial integration and onboarding, system maintenance, operational expenses, end-user devices for offline payments, and compliance with legal requirements such as Know-Your-Customer (KYC). The current design envisions costly payment infrastructure and customer support by PSPs (cf. Q6), (taxpayer-funded) public entities to provide end-user onboarding, mandatory acceptance at European merchants for a fee (passed on to consumers via higher prices, cf. Q5), and high expenses for development, maintenance and operation, borne but not paid by the ECB (cf. Q27). Reduced profits for the ECB in turn reduce the profits of the national central banks and thereby the dividends paid by central banks to the national budgets, which finally leads to higher taxes. Ultimately, all costs for the digital euro will be borne by the citizens of the euro area.
The given example of an escrow service lacks a convincing argument how this is added value, as banks and digital payment providers can provide those services already, without the digital euro. Additionally, it presents an overly simplistic perspective on the intricacies of online fraud by proposing a “solution” that focuses solely on one interest—the user’s— while disregarding others. This makes it unlikely to persuade merchants.