The executive arm of the EU is gearing up to start public consultations on the digital euro project next month. The European Commission will also prepare new legislation to establish the legal basis for the digital version of the common European fiat. A draft is expected in 2023.
EU Finance Chief Announces Legislative Plan for Digital Euro
The European Commission (EC) is planning to put forward a bill tailored to lay down the legal foundation for a digital euro currency, Politico reported this week. The legislation will support the European Central Bank (ECB) in its efforts to work out the technical side of the project which entered its investigation phase in October 2021.
The executive body in Brussels aims to introduce the draft law early next year but before that, it wants to launch a public consultation on the matter. The ECB already did that in 2020 when it found that Europeans were deeply concerned about their financial privacy. The EC intends to focus on practical questions such as how the coin will facilitate everyday payments.
Following Politico’s report, EU Commissioner for financial services Mairead McGuinness announced the legislative plan at a fintech conference:
Our goal is to table legislation in early 2023. A targeted legislative consultation in the coming weeks.
The European Commission will have to coordinate the bill with the governments and legislatures of the member states before it becomes law. Tests with the digital euro are now ongoing at the ECB. The monetary authority hopes to begin working on a prototype for the CBDC at the end of 2023.
To finalize the project, an impact assessment will also be carried out as well, in order to establish whether the digital euro can destabilize the financial system. Eurozone governors will decide if it’s worth minting a virtual currency and the digital euro may be issued by 2025.
While the ECB’s Governing Council will make the final decision, leading EU members such as France and Germany have already called on the Eurosystem’s central bank to step up efforts in that direction. Policymakers in Brussels and European capitals fear the eurozone may lag behind China, the U.S., and Russia which have been developing their own digital currencies.
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