The European Union has plans to release a digital wallet that would allow its citizens to make payments across all member states with minimal friction. The wallet would be launched next year and integrate private and public services under just one app, according to a report from Reuters.
The wallet would work as a sort of payments and ID vault and would allow users to store digital equivalents of their physical permits, such as passports or driver’s licenses, integrating other state-dependent services too.
Due to its character, the wallet will be authenticated using biometric data, such as fingerprint verification and retina scans using computational power and sensors that mobile devices already have on board.
The European Union is said to have thought about the privacy of the app’s users: The bloc will ostensibly design the app in such a way that data from users is compartmentalized, to make sure that this valuable data will not be used by third parties for advertising or other purposes.
While the European Central Bank has not decided to issue a digital euro and is still in the process of exploring the effects of Central Bank Digital Currencies, this wallet could be useful for the implementation of such currency. Combined with the app, the digital euro could give the European Union leverage to regulate the rise of other, uncontrolled digital currencies.
The European Central bank has stated that one of the key objectives in issuing a digital euro would be to: “…avoid dependence on digital means of payment issued and controlled from outside the euro area, which might undermine financial stability and monetary sovereignty.”
The system, if really implemented, would be the biggest digital CBDC to date, covering the 27 member countries of the European Union under its area of influence. However, it would not be the first one: Bahamas and China are already in the process of issuing their own digital currencies.