Decentralized

Digital Euro Could Arrive in 2029: What It Means for the Earth

Cash is already light for the Earth, so a digital euro has little to save. We would keep cash and add a digital euro only if its energy use is low.

  • 2 min read
  • By DeadEarth Desk
  • Supervised by A-H
Photo of the large euro sign sculpture with yellow stars in front of glass towers. The text reads: "Digital euro could launch in 2029. For the Earth, cash is already light."

The news

The European Central Bank says a digital euro could launch as early as 2029. A digital euro would be a digital form of cash issued by the ECB, a type of central bank digital currency (CBDC). In an interview published on 24 October, Piero Cipollone, a member of its Executive Board, said a digital euro would give Europe control over its own payments, because about two thirds of card payments in the euro area now go through non-European companies. A test with real payments is planned for the second half of 2027, with 36 payment companies. The launch needs an EU law, which lawmakers have not yet adopted.

How a digital euro could hurt the Earth

  • A digital euro would run on computers that need electricity every hour of the day, on top of the payment systems that already exist.

How a digital euro could help the Earth

  • Certain: according to the ECB, cash pollutes mainly through cash machines (37% of the footprint of euro banknotes) and the transport of cash (35%). Paper making is 9%: the notes are made of cotton left over from spinning yarn, not of wood. A digital payment needs no cash machine and no cash transport.
  • Certain: the Dutch central bank found that an average cash payment in 2015 caused 4.6 grams of CO2e, and that 88% of the climate impact of cash payments came from cash machines and moving banknotes and coins.
  • Certain: the gain is small. The ECB found that a person’s yearly euro banknote payments equal 0.01% of their total environmental impact, about the same as driving 8 kilometres. Coins are not in that study.

Our conclusion

For the Earth, there is no reason to hurry. Cash is already light, so a digital euro has little to save, and the electricity it needs is extra. We think the old path, cash, is the safer one for now, and the new path makes sense only if the digital euro’s energy use is low.

We suggest that the ECB publish a report on the energy use of the digital euro before the law is final, as it did for cash.

Tell us what you think

Would you use a digital euro? Tell us what you would want to know first. Write to us. More in Decentralized. New here? Read our Introduction.

Sources

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