Consumers in the eurozone would benefit from a digital euro currency, according to the head of the German central bank.
They would have a European means of payment at their disposal that is secure, convenient, fast, reliable, free of charge and can be used throughout the eurozone, Bundesbank President Joachim Nagel said in a speech to a banking conference in Berlin on Wednesday.
"As things currently stand, German bank cards, for example, don't always work in other euro area countries," Nagel said.
In contrast to many commercial payment providers, the Eurosystem has no interest in monitoring people's payment behaviour, he said.
"The Eurosystem would not be able to identify people based on the payments they make," Nagel said on Wednesday, according to the text of his speech.
For years, the monetary authorities in the eurozone, under the leadership of the European Central Bank (ECB), have been working on a digital version of the European single currency to complement banknotes and coins.
The aim is to counter private providers, particularly from the United States, which currently dominate the market for digital payments in Europe, with a European digital payment service.
It has not yet been decided, however, whether or when there will be a digital euro.
"The digital euro would be a complement to cash, not a substitute," Nagel said.
According to Nagel, most people would pay with the digital euro via apps on their smartphone. However, those who do not own a smartphone should also be able to use the virtual currency.
"One option currently under discussion by the legislators is the issuance of physical cards that would also be available to people without a bank account," he said.
According to Nagel, retailers and banks would also benefit from a digital euro.
Critics, however, fear that a digital version of the euro could become an attractive substitute for bank deposits and that institutions would lose an important source of funding.
In the event of a crisis, there could also be a bank run, with savers withdrawing deposits from banks on a large scale in a short space of time, critics of the plan fear.
Nagel said that, in order to prevent the withdrawal of bank deposits, the introduction of upper limits for the digital euro is being discussed.
"We would see to it that people will not use the digital euro as a store of value, but as a means of payment, as intended," Nagel said. "Rest assured that the Eurosystem has every intention of retaining the tried-and-tested two-tier banking system in the euro area."