The European Union’s finance head indicated that a measure establishing a digital euro would be introduced in the European Parliament as soon as 2023.
As Politico first reported, EC finance head Mairead McGuinness unveiled the EU’s formal study of digital euro legislation on Wednesday at a fintech conference.
“Our intention is to introduce legislation in early 2023,” the Financial Services Commissioner said. “In the following weeks, a focused legislative consultation will take place.”
The European Central Bank (ECB) has begun testing ideas and technologies for a digital euro, with a prototype anticipated in late 2023. To be implemented, a digital euro will need the agreement of Eurozone governors. If they grant the go-ahead, the digital euro might be available for purchase by 2025.
The digital euro is a central bank digital currency (CBDC) – a financial tool being seriously considered by central banks worldwide. The heightened interest in CBDCs stems from growing worries that the popularity of cryptocurrencies may ultimately threaten native currencies.
“If we do not meet this need, others will,” ECB Executive Board member Fabio Panetta said in mid-November, urging the ECB to establish a digital euro.
The European Central Bank conducted research and issued a report on digital currencies last year. It concluded that a digital euro may help cut interest rates, accelerate transaction processing, and reduce reliance on currency.
Regardless of the alleged advantages, central bankers have an uphill struggle to gain popular support. According to research undertaken by the UK’s economic affairs committee and Germany’s central bank, the majority of respondents reject government-backed digital currencies, citing doubts about their merits and concerns about government surveillance.
However, government interest in CBDCs has increased significantly throughout the globe, with Kenya’s central bank recently soliciting public feedback on a digital shilling and Thailand already beginning to develop regulations for a potential retail CBDC. The Central Bank of the Bahamas was one among the first to introduce a CBDC in October 2020, with the Sand Dollar.
China, on the other hand, retains the first-mover edge in the digital currency sector. The government has consistently outperformed the international community in the CBDC field, making considerable strides ahead.
Also Read: The Head Of India’s Central Bank Dismisses Cryptocurrencies As Being Worth ‘Not Even A Tulip’
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