The European Central Bank (ECB) expressed support today, June 28, for the European Commission’s legislative proposal aimed at creating a regulatory framework for a digital euro. The legislation aims to ensure that the digital euro could be universally utilized throughout the euro area, like traditional banknotes and coins.
The ECB stated it is awaiting the decision by its Governing Council this fall on whether to progress to the next phase of the digital euro project. This announcement follows the Commission’s legislative proposal publication regarding the digital euro today.
With the legal tender status proposed for the digital euro, it is anticipated to be widely accepted as a valid means of payment. The legislation also suggests that individuals could access digital euros through their bank upon request, thus ensuring its availability to all.
In addition to free basic services for digital euro use, the legislative proposal includes economic incentives for private intermediaries to distribute the digital euro. This would help prevent merchants from incurring excessive fees.
Emphasizing privacy and data protection, the proposal aims to maintain high-security standards while curbing risks of money laundering and terrorism financing. The digital euro could be used offline as well, offering cash-like privacy levels.
“The euro signifies European integration in its most tangible form,” said Christine Lagarde, ECB President. “We’re eager to collaborate with other EU institutions on the digital euro to guarantee our currency remains relevant in the digital age.”
The digital euro project’s investigative phase will conclude in October 2023, and the Governing Council of the ECB will then decide on the next steps.
Fabio Panetta, Executive Board member and the High-Level Task Force on a digital euro’s chair, lauded the legislative proposal for taking the cash’s appreciated features into the digital realm. The ECB also commended the Commission’s proposition to protect the legal tender status of euro cash.
In order to maintain cash as a vital part of the payment system, the ECB supports the proposal ensuring that euro banknotes and coins remain easily accessible and widely accepted. The bank stands prepared to offer technical support to EU co-legislators and awaits consultation requests on proposed legislative changes.
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