EU Financial Services Chief Advocates ‘Slow’ Approach to Digital Euro Legislation

The European Union’s financial services chief emphasized that the digital euro proposal should not be rushed before the elections in June 2024. Instead, he stressed that it should be thoroughly examined, according to a report by Reuters.

The draft law reportedly aims to allow a digital euro that mimics cash and works offline.

Digital Euro Proposal to Be Examined

Speaking at a conference on Wednesday, Mairead McGuinness stated the Commission proposed a digital currency framework. However, he noted that the decision on whether to issue it rests with the European Central Bank (ECB).

The ECB is set to decide in October whether to move forward with a digital euro.

Read more: A Token Economy for Europe: Considering the Opportunities 

Europe is embracing the concept of Central Bank Digital Currencies (CBDCs). Countries like Ireland, Spain, France, and Italy are actively exploring digital euro prototypes. BeInCrypto previously reported that the ECB is collaborating with member nations to develop accessible and privacy-protecting digital euros.

CBDCs Worldwide Adoption. Source: Statista

Some countries, like France, aim for functional prototypes by autumn 2023. Others, like Germany, are cautiously assessing the benefits and risks.

McGuinness highlighted the decreasing use of cash and the growing popularity of card and mobile payments. The official also emphasized the need for a digital version of central bank money. McGuinness also stated that the EU has an obligation to explore this avenue.

ECB Sees Inclusive CBDC Legislation

In a speech this week, Executive Board Member Fabio Panetta informed the European Parliament Committee that the apex bank would present the results of its year-long investigation into a Central Bank Digital Currency (CBDC) next month.

Read more: Digital Rupee (e-Rupee): A Comprehensive Guide to India’s CBDC

Panetta noted,

“The Governing Council will decide whether to move to the next phase of the project. But again, let me be very clear: a possible decision by the Governing Council to issue a digital euro is not on the table now, and would only be taken after the legislation is adopted.”

However, with the elections due, the legislation could take longer.

The official also emphasized the importance of designing an inclusive and truly European digital payment solution that aligns with people’s needs and preferences. He stressed the need for close cooperation between European institutions to determine the digital euro’s optimal design.

In his speech, Panetta also warned about the potential threat posed by tech companies dominating the stablecoin market, which could hinder the adoption of the digital euro.

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