The EU’s executive arm is preparing to launch public consultations on the digital euro project next month. In addition, the European Commission will draught new legislation to establish the legal foundation for the digital version of the common European fiat. A draught is scheduled for 2023.
The EU Finance Commissioner has announced a legislative plan for the digital euro.
According to Politico, the European Commission (EC) intends to introduce legislation that will lay the legal groundwork for a digital euro currency. The legislation will aid the European Central Bank (ECB) in its efforts to finalize the technical aspects of the project, which began its investigation phase in October 2021.
The executive body in Brussels intends to introduce the draught law early next year, but first plans to hold a public consultation on the subject. When the ECB discovered that Europeans were deeply concerned about their financial privacy in 2020, it took action. The EC intends to concentrate on practical issues such as how the coin will facilitate daily payments.
Following the publication of the Politico report, EU Commissioner for Financial Services Mairead McGuinness announced the legislative plan at a fintech conference:
Our aim is to introduce legislation in early 2023. In the coming weeks, there will be a targeted legislative consultation.
Before becoming law, the European Commission will need to coordinate the bill with the governments and legislatures of the member states. The ECB is currently conducting tests with the digital euro. The monetary authority hopes to start working on a CBDC prototype by the end of 2023.
To complete the project, an impact assessment will be conducted to determine whether the digital euro will destabilize the financial system. The Eurozone governors will decide whether it is worthwhile to mint a virtual currency, and the digital euro could be issued by 2025.
While the final decision will be made by the ECB’s Governing Council, leading EU members such as France and Germany have already urged the Euro system’s central bank to increase its efforts in this regard. Policymakers in Brussels and European capitals are concerned that the eurozone will fall behind China, the United States, and Russia in developing their own digital currencies.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.